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Boston College Environmental Affairs

Law Review

Volume 38 Number 2

Symposium Issue

Learning from Disaster: Lessons for the Future from the Gulf of Mexico

Foreword

Symposium Articles

Reconceptualizing NEPA to Avoid the Next Preventable Disaster

Michael Barsa & David Dana

[pages 219–246]

Abstract: This Article develops two accounts of why the risks of techno-logical failure at the root of the Deepwater Horizon disaster were roundly ignored by regulators and industry alike. First, we argue that the inatten-tion to risk may have reflected a “groupthink” pathology within the ho-mogenous community of regulators and industry actors, whereby an or-thodoxy regarding the safety of drilling came to be not just accepted but required in order to succeed. Second, we argue that the inattention to risk may have been a rational industry decision in light of its ability to avoid bearing all the costs of a disaster, as well as its ability to capture regulators to avoid unwanted scrutiny. We argue, then, that no matter which account was in fact prevalent, the proposed reforms in the wake of Deepwater Ho-rizon are not fundamental enough to address the risks. Building on a con-tractarian model, we argue for a reformulation of NEPA and other envi-ronmental reviews whereby it would be understood that industry engages in these reviews as a contractual quid-pro-quo for obtaining valuable rights (such as leases), and where those rights could be rescinded when it be-comes apparent that the reviews were not conducted reasonably and in good faith. In other words, we believe that industry must come to “own” environmental review and, once that is so, the culture and calculations of industry leaders will change to make them more attentive to environ-mental risks.

Through Another’s Eyes: Getting the Benefit of Outside Perspectives in Environmental Review

Holly Doremus

[pages 247–280]

Abstract: The Deepwater Horizon blowout has important lessons to teach about environmental review. It is easy to scapegoat the former Minerals Management Service (MMS) for shoddy environmental analysis. But cap-tive agencies are a common phenomenon. Oversight by environmental mission agencies is supposed to provide a check on their myopia. Several external reviews of MMS’s environmental analysis were conducted, but none uncovered MMS’s wildly incorrect estimates of the probability, magnitude, and consequences of a blowout. This article details the exter-nal reviews, explains why they proved ineffective, and offers suggestions for improvement. Outside review cannot be effective unless reviewers un-derstand the importance of their task, are able to focus on the key aspects of analyses they are reviewing, and can bring the appropriate expertise to bear. All of these elements were missing in reviews of the analysis that preceded drilling in the Macondo prospect. Their availability for future reviews would be improved if the executive branch took some relatively easy unilateral steps.

Three Meta-Lessons Government and Industry Should Learn from the BP Deepwater Horizon Disaster and Why They Will Not

Alyson C. Flournoy

[pages 281–304]

Abstract: There are many law and policy lessons to be learned from the BP Deepwater Horizon disaster and its aftermath. Some are lessons spe-cific to the BP oil well blowout. Regrettably, Congress has failed to enact even these critical reforms, although some important regulatory reforms have been adopted. This Article focuses on three broader lessons that this disaster should also teach, but that are very unlikely to be learned: lessons that could help to reduce the risk of future disasters. These meta-lessons suggest the need to: (1) learn from the next disaster -- not the last one; (2) learn from the blueprint of the disaster; and (3) learn from the context of the disaster. However, both the limited scope of the reforms undertaken in the year since the disaster and the blueprint of the disaster highlight why government and industry are unlikely to learn these broader lessons.

Oil and Freshwater Don’t Mix: Transnational Regulation of Drilling in the Great Lakes

Noah D. Hall

[pages 305–316]

Abstract: In the wake of the Gulf oil blowout disaster, there is renewed in-terest in protecting the freshwater of the Great Lakes from the risks of oil drilling. The region has significant oil resources that would be economi-cally and technologically accessible through drilling in the Great Lakes. The Great Lakes bottomlands and shorelines are subject to the regulatory jurisdiction of two countries—the United States and Canada—and eight American states. While the existing legal regime lacks uniformity, and is characterized by jurisdictional inconsistency and potential for trans-boundary pollution externalities, oil drilling is mostly prohibited. With strong public support for protecting the Great Lakes, there is an oppor-tunity to further strengthen oil drilling regulation in the Great Lakes through international and domestic law.

Of Dead Pelicans, Turtles, and Marshes: Natural Resources Damages in the Wake of the BP Deepwater Horizon Spill

Itzchak E. Kornfeld

[pages 317–342]

Abstract: This Article posits that in its role as the lead agency among the United States’ natural resources trustees, the National Oceanic & Atmos-pheric Administration’s piecemeal assessment of natural resources dam-ages, i.e., valuing one dead bird at a time or the death of just a tract of marsh, fails to consider the inherent worth or the value of the entire eco-system. Valuing the destruction of the entire ecosystem as a result of the BP Deepwater Horizon well blowout is the best way to assess the damage in the Gulf Coast, particularly in south Louisiana. That crude oil spill re-sulted in an estimated 53,000 barrels per day, and a total volume of 4.9 million barrels that despoiled the waters of the Gulf of Mexico and the surrounding shorelines. As a consequence of the spill, thousands of birds, turtles, fish, and marshlands were left to die.

Five Thousand Feet and Below: The Failure to Adequately Regulate Deepwater Oil Production Technology

Mark A. Latham

[pages 343–368]

Abstract: Oil and gas production in the Gulf of Mexico is an important aspect of our domestic energy strategy, and to successfully obtain oil from deep beneath the ocean floor. in thousands of feet of water, an impressive array of technology is utilized by the oil and gas industry. One of the many lessons learned, however, from the Deepwater Horizon disaster is that this technology can present significant risks to human life and the environ-ment if it fails. This Article presents an overview of the technology used to conduct deepwater oil and gas drilling operations, and then examines how the failure to adequately regulate this risky technology played a major role in the Deepwater Horizon catastrophe. This Article also summarizes the actions taken by regulators in response, and questions whether the actions taken are sufficient to prevent another deepwater disaster. The Article concludes by suggesting a number of other actions for consideration by policymakers to reduce the risks associated with producing oil from tens of thousands of feet beneath the ocean’s floor.

The Significance of Regulatory Orientation in Occupational Health and Safety Offshore

John Paterson

[pages 369–390]

Abstract: The 2010 Deepwater Horizon disaster in the Gulf of Mexico has led to calls for the United States’ prescriptive regulatory approach to off-shore safety to be replaced with something closer to the Safety Case re-gime that was introduced in the United Kingdom following the Piper Al-pha disaster in the North Sea in 1988. This Article traces the evolution of offshore safety regulation in the UK to explain the reasons for the aban-donment of prescriptive regulation in favour of the Safety Case approach, and to outline the key features of the latter regime. Noting both the ap-parent strengths and weaknesses of the Safety Case, the paper concludes that while there may be good reasons for avoiding a wholesale transplant of the United Kingdom’s approach, there may equally be important les-sons to be drawn from the long and often difficult evolution of offshore safety regulation in that jurisdiction.

The Exxon Valdez Resurfaces in the Gulf of Mexico . . . and the Hazards of “Megasystem Centripetal Di-Polarity”

Zygmunt J.B. Plater

[pages 391–416]

Abstract: The 2010 BP Deepwater Horizon blowout spill in the Gulf of Mexico shocked the nation with the amount of oil and harm it unleashed upon the Gulf and its natural and human ecosystems. As details of the ca-lamity became available, they revealed frustrating parallels to the 1989 Exxon Valdez oil spill in the Gulf of Alaska in terms of causation and im-paired response capability. Similar systemic deficits characterized the ac-tions of corporate managers and state and federal regulators in the oil industry of both Gulfs. In a “di-polar” system where industry and govern-ment regulators come too close together, responsible overall manage-ment of operations and risks suffers. The lessons and recommendations incorporated in the 1990 Alaska Oil Spill Commission’s Final Report on the Exxon Valdez spill, including watchdog citizen councils, were highly germane but largely ignored or forgotten in the decades between the Alaska Report’s release and the 2010 BP tragedy. This Article reviews the Gulf of Mexico spill in light of the Gulf of Alaska spill, and notes how this time around we must finally learn how to deal more seriously with the mega-risks posed when di-polar convergences occur in these megasystems of hydrocarbon production and transport.

Lessons from the North Sea: Should “Safety Cases” Come to America?

Rena Steinzor

[pages 417–444]

Abstract: The catastrophic oil spill in the Gulf of Mexico last spring and summer has triggered an intense search for more effective regulatory methods that would prevent such disasters. The new Bureau of Ocean En-ergy Management, Regulation, and Enforcement is under pressure to adopt the British safety case system, which requires the preparation of a fa-cility-specific safety plan that is typically several hundred pages long. This system is supposed to inculcate a “safety culture” within companies that operate offshore in the British portion of the North Sea, because it over-comes a “box-ticking” mentality and constitutes “bottom up” implementa-tion of safety measures. Safety cases are strictly confidential; only company officials, regulators, and, in limited circumstances, worker representatives, are allowed to see the entire plan. This Article argues that the safety case approach should not come to America because this confidentiality, as well

as the levels of risk tolerated by the British system, conflict with the both the spirit and the letter of American law. American regulators also lack the resources necessary to make a safety case regime minimally successful.

Notes

Supreme Foresight: Judicial Takings, Regulatory Takings, and the Public Trust Doctrine

Julia Bramley

[pages 445–476]

Abstract: Before the Supreme Court issued its decision in Stop the Beach Renourishment, Inc., v. Florida Department of Environmental Protection, many expected the Court to finally speak about whether the public trust doc-trine qualifies as a background principle for modern takings law, and whether judicial decisions can constitute an unconstitutional taking. In deciding against private property rights and in favor of states’ rights to protect their beaches, however, the Supreme Court once again avoided finally deciding these issues. Nonetheless, had the Court instead adopted the expected “foreseeability” approach to determine whether there was a judicial taking, the result would likely have been the same. That is because the public trust doctrine, which is a background princi-ple of property law under Lucas v. South Carolina Coastal Council, allows Florida to reclaim the state’s beaches after a destructive storm and does not unconstitutionally take any private property rights.

The Citizen Participation Act of 2009: Federal Legislation as an Effective Defense Against SLAPPs

Jesse J. O’Neill

[pages 477–508]

Abstract: The First Amendment to the United States Constitution ex-pressly guarantees the right of citizens to petition the government. Citi-zen efforts have been particularly crucial to the process of creating, shap-ing, and enforcing environmental laws. Nevertheless, citizen participants in government can often find themselves facing retaliation in the form of a strategic lawsuit against public participation (SLAPP). SLAPPs are law-suits brought to interfere with a party's exercise of its right to petition the government, typically by draining the party's time and resources. Al-though many states have adopted anti-SLAPP protections, similar protec-tions are lacking at the federal level. Because so many federal environ-

mental statutes allow for citizen participation, the threat of a SLAPP is es-pecially high. This Note argues that current federal anti-SLAPP protec-tions are inadequate, and that legislation proposed in 2009 would better protect the right of citizens to petition the government.

Endocrine-Disrupting Chemicals: Testing to Protect Future Generations

Alana Van der Mude

[pages 509–536]

Abstract: Endocrine-disrupting chemicals (EDCs) are a class of chemicals that interferes with human hormone processes. EDCs are omnipresent: pesticides, plastics, and drugs, among other common chemicals, all dem-onstrate endocrine-disrupting properties. Scientific studies have demon-strated the frightening effect EDCs have on human health, for adults but also particularly for fetuses while they develop in utero. Given these health concerns, Congress passed the Food Quality Protection Act of 1996, which requires the EPA to test pesticides for their endocrine-disrupting proper-ties. Unfortunately this testing, fifteen years later, has still not begun. Addi-tionally, pesticides are only one subcategory of EDCs. Therefore this Note argues that citizens should bring suit under the Administrative Procedure Act to compel EPA to complete testing of pesticides for endocrine-disrupting properties and extend testing to non-pesticide EDCs, all with the goal of furthering effective regulation of EDCs.

Pigs in the Backyard or the Barnyard: Removing Zoning Impediments to Urban Agriculture

Kate A. Voigt

[pages 537–566]

Abstract: Urban agriculture is on the rise in cities across the United States, due in part to consumers' increased interest in buying local and sustainably-produced foods. Many municipalities have recognized the benefits that urban agriculture can bring to their residents, including economically down-trodden cities that view urban agriculture as a way to revitalize their neighborhoods. Unfortunately, zoning regulations often unintentionally prohibit even the most basic farming activities. This Note examines the impact of municipal zoning regulations on urban agricul-ture, and suggest ways that a municipality looking to encourage urban ag-riculture can use zoning regulations to responsibly promote its practice.

Would a “God Squad” Exemption Under the Endangered Species Act Solve the California Water Crisis?

Eric Yuknis

[pages 567–596]

Abstract: The Endangered Species Act’s (ESA) protection of threatened and endangered wildlife has frequently brought the law into conflict with economic interests, including those of government development agen-cies whose actions the statute may prohibit. When an agency wishes to override the protections of the Act, it may turn to a rarely used commit-tee of Cabinet-level officials, known as the “God Squad,” for relief. The ESA empowers the God Squad to evaluate a proposed project and ex-empt the project from ESA requirements if it finds that the benefits of doing so clearly outweigh the benefits of conserving the species. Using prior God Squad rulings as guidance, this Note addresses whether the God Squad is the appropriate avenue to address California’s severe water shortages—caused by both drought and regulatory restrictions on water usage due to ESA protections of a threatened species in the Bay-Delta region of the state.

Boston College Environmental Affairs

Law Review

Volume 38 Number 2

Symposium

Learning from Disaster: Lessons for the Future from the Gulf of Mexico

Foreword

On the evening of April 20, 2010, the BP Deepwater Horizon burst into flames, killing eleven workers on board and setting off a chain of events that would send five million gallons of oil gushing into the Gulf of Mexico for the next three months. As the crisis in the Gulf unfolded over the summer of 2010, the members of the Boston College Environmental Af-fairs Law Review and its advisors decided to organize a symposium to ana-lyze the events leading up to the spill. The focus of our symposium was not on retroactive liability, but rather looking prospectively at ways to an-ticipate and prevent the next environmental disaster. What went wrong, and what actions should we suggest to prevent the next oil system failure? The symposium, which was co-sponsored by the Boston College Envi-ronmental Studies Program, Boston College Law School’s Environ-mental Law Society, and the Boston College Energy and Environment Alumni Network (BCEEAN), with generous sponsorship from John D. Hanify, ’74, gathered leading academics to discuss their thoughts on how to avoid another catastrophe. The symposium took place on November 11, 2010, at Boston College Law School. The first panel focused on the importance of effective regulation. Professor David Dana discussed his concept of NEPA-as-contract, which is elaborated in an article in this issue, co-written with Professor Michael Barsa, who was not in attendance.1 Professor Holly Doremus provided a different analysis of NEPA, focusing on the need for worst-case analysis in the environmental review process.2 Professor Alyson Flournoy pre-sented three meta-lessons from the spill, which she describes as lessons

------------------------------------------------------------------------------------------------------------------------------ 1 Michael Barsa & David A. Dana, Reconceptualizing NEPA to Avoid the Next Preventable

Disaster, 38 B.C. Envtl. Aff. L. Rev. 218 (2011). 2 Holly Doremus, Through Another’s Eyes: Getting the Benefit of Outside Perspectives in Envi-

ronmental Review, 38 B.C. Envtl. Aff. L. Rev. 245 (2011).

on how to learn from this disaster to prevent the next.3 Professor John Paterson brought an international perspective, describing the “safety case” program used to regulate drilling in the United Kingdom’s North Sea, and advocating safety cases as a successful system that can inform the United States’ own regulatory structure.4 Finally, Professor Rena Steinzor argued against Professor Paterson’s position, and dismissed the safety case regime as an unfit substitute for the United States’ current prescriptive regulatory system.5 During the keynote speech, Dr. Riki Ott presented an extended scientific analysis of the human health harms and long-term ecological damage from oil spills, utilizing her twenty years of research into the health and environmental harms stemming from the Exxon Valdez spill in Prince William Sound, Alaska. During the second panel, Professor Noah Hall discussed oil and gas drilling in a different context, that of the Great Lakes, explaining that although the United States has banned drilling in the Great Lakes, the potential remains for Canadian drilling operations to pollute this important freshwater resource.6 Professor Itzchak Kornfeld focused on the need to repair the Gulf ecosystem, and discussed the calculation of natural resources damages.7 Professor Mark Latham analyzed regula-tors’ inadequate understanding of the highly complex field of deepwa-ter drilling technology, which led to inappropriate regulatory oversight and unsafe drilling systems.8 Finally, Professor Zygmunt Plater looked at the Gulf spill in context of the Exxon Valdez oil spill twenty years prior, to discuss whether we will finally apply the lessons learned two decades ago regarding how best to regulate petroleum “megasystems.”9 These symposium presentations led to the articles published in this volume. The symposium was attended by a number of concerned citizens, activists, and members of government regulatory bodies, in-cluding the Chemical Safety Board and the Massachusetts’ Attorney

------------------------------------------------------------------------------------------------------------------------------ 3 Alyson C. Flournoy, Three Meta-Lessons Government and Industry Should Learn from the

BP Deepwater Horizon Disaster and Why They Will Not, 38 B.C. Envtl. Aff. L. Rev. 279 (2011). 4 John Paterson, The Significance of Regulatory Orientation in Occupational Health and

Safety Offshore, 38 B.C. Envtl. Aff. L. Rev. 367 (2011). 5 Rena Steinzor, Lessons from the North Sea: Should “Safety Cases” Come to America?, 38 B.C.

Envtl. Aff. L. Rev. 417 (2011). 6 Noah D. Hall, Oil and Freshwater Don’t Mix: Transnational Regulation of Drilling in the

Great Lakes, 38 B.C. Envtl. Aff. L. Rev. 303 (2011). 7 Itzchak E. Kornfeld, Of Dead Pelicans, Turtles, and Marshes: Natural Resources Damages in

the Wake of the BP Deepwater Horizon Spill, 38 B.C. Envtl. Aff. L. Rev. 315 (2011). 8 Mark A. Latham, Five Thousand Feet and Below: The Failure to Adequately Regulate Deep-

water Oil Production Technology, 38 B.C. Envtl. Aff. L. Rev. 341 (2011). 9 Zygmunt J.B. Plater, The Exxon Valdez Resurfaces in the Gulf Of Mexico . . . And the Haz-

ards of “Megasystem Centripetal Di-Polarity,” 38 B.C. Envtl. Aff. L. Rev. 389 (2011).

General’s Office, among others. It is our intention to circulate the find-ings of the symposium to the widest audience possible, with the hopes that these conclusions will help illuminate how best to prevent the next environmental catastrophe.

Alana Van der Mude, Editor in Chief, Volume 38

Boston College Environmental Affairs Law Review

INSERTED BLANK PAGE

RECONCEPTUALIZING NEPA TO AVOID THE NEXT PREVENTABLE DISASTER

Michael Barsa* David A. Dana**

Abstract: This Article develops two accounts of why the risks of techno-logical failure at the root of the Deepwater Horizon disaster were roundly ignored by regulators and industry alike. First, we argue that the inatten-tion to risk may have reflected a “groupthink” pathology within the ho-mogenous community of regulators and industry actors, whereby an or-thodoxy regarding the safety of drilling came to be not just accepted but required in order to succeed. Second, we argue that the inattention to risk may have been a rational industry decision in light of its ability to avoid bearing all the costs of a disaster, as well as its ability to capture regulators to avoid unwanted scrutiny. We argue, then, that no matter which account was in fact prevalent, the proposed reforms in the wake of Deepwater Ho-rizon are not fundamental enough to address the risks. Building on a con-tractarian model, we argue for a reformulation of NEPA and other envi-ronmental reviews whereby it would be understood that industry engages in these reviews as a contractual quid pro quo for obtaining valuable rights, such as leases, and where those rights could be rescinded when it becomes apparent that the reviews were not conducted reasonably and in good faith. In other words, we believe that industry must come to “own” environmental review and, once that is so, the culture and calculations of industry leaders will change to make them more attentive to environ-mental risks.

Introduction

There are many technical, engineering, and scientific reasons why the Deepwater Horizon/BP disaster occurred. This Article does not seek to address the proximate causes of the disaster, but instead to probe further back in time. Why did no one in either government or industry plan for such a catastrophe? Why did numerous environmental reviews fail to even consider an oil spill of such great magnitude?

© 2011, Michael Barsa & David A. Dana. * Senior Lecturer, Northwestern University School of Law. ** Stanford Clinton Sr. and Zylpha Kilbride Clinton Research Professor of Law,

Northwestern University School of Law.

219

220 Environmental Affairs [Vol. 38:219

This Article begins to answer these questions by focusing on the relationship between the oil companies and regulators, and to place the failure in the context of larger debates about the role of substantive en-vironmental law in facilitating regulatory success or failure. In particular, this Article considers the BP disaster from the perspective of two ac-counts as to why the regulation of natural resource extraction often fails to constrain the behavior of large companies, to the detriment of the public welfare. The first account, which we call the “Group Pathologies” account, essentially attributes the failure to the tendency of groups, es-pecially highly homogenous groups, to develop strongly held, extreme positions even in the face of contrary data.1 This account posits a world where the dominant voices in industry and government honestly, if mis-takenly, believed that a spill of such magnitude was virtually impossible.2 The second account, which we call the “Ruthless Calculator/Captive Regulator” account, instead depicts the spill as the result of BP’s ra-tional, if ruthless, calculation that it had so captured the regulators that it would be able to externalize much of the cost of any environmental risks.3 In either case, we believe that a relatively straightforward reform to the environmental review process under the National Environmental Policy Act (NEPA) could significantly lessen the likelihood of such fail-ures in the future.4 The dominant model for NEPA has been one where the action agency—typically a non-environmentally oriented agency— conducts the review and is or is not challenged in court for having done too little.5 Both the Group Pathologies and Ruthless Cal-culator/Capture accounts, however, suggest that nothing will change unless there are much stronger and more immediate incentives to per-form robust environmental assessments.6 Otherwise it will be too easy for regulators and industry to remain blinded to the risk, as in the Group Pathologies account, or to accept such risk knowing that many of the costs may be externalized onto others, as in the Ruthless Calcula-tor/Captive Regulator account.7

1 See discussion infra Part II. 2 See infra notes 92–96 and accompanying text. 3 See discussion infra Part III. 4 See discussion infra Part IV. 5 See Zygmunt J.B. Plater et al., Environmental Law and Policy 320 (4th ed.

2010). 6 See discussion infra Part IV. 7 See infra Part IV.

2011] Reconceptualizing NEPA to Prevent the Next Disaster 221

In order to overcome these problems, we advocate what we call the NEPA-as-contract model.8 Under this model, companies that receive leases on the basis of grossly inadequate assessments that they them-selves perform will potentially have their leases rescinded, much as in-surance contracts can be rescinded if it is later discovered that the ap-plicant for insurance made a material misstatement on his or her application.9 Even if the threshold for rescinding a lease were set very high, and even taking into account that government officials might well not act on their legal right to rescind, we think that, ex ante, the mere possibility of the loss of valuable lease rights could be enough to en-courage more thorough and honest assessments at the time companies applied for lease rights.10 Importantly, this model does not require Congress to amend NEPA or pass new legislation, but instead may be incorporated into the language of the lease contracts themselves. Thus, unlike many other proposed reforms, this one could be implemented immediately for all contracts going forward, and for any existing con-tracts subject to renegotiation.11

I. The Deepwater Horizon/BP Permitting Process

For many, the disastrous Gulf of Mexico oil spill began on April 20, 2010, with the explosion and fire on the Transocean-owned, BP-licensed drilling rig Deepwater Horizon. In truth, however, the spill was the cul-mination of years of oil drilling promotion that gave short shrift to the environmental risks.12 In 2006, in the wake of rising oil prices, legislation opened up large areas of the Gulf of Mexico to offshore oil drilling.13 After opening these areas to drilling, the Minerals Management Service (MMS) en-gaged in NEPA analysis at three different stages of development. At the programmatic level, MMS prepared a single Environmental Impact Statement (EIS) for a five-year leasing period, which covered eleven dif-

8 See infra Part IV. 9 See infra notes 132–136 and accompanying text. 10 See discussion infra Part IV. 11 See infra note 145 and accompanying text. 12 See Tim Dickinson, The Spill, The Scandal and The President, Rolling Stone, June 24,

2010, at 56. 13 See Gulf of Mexico Energy Security Act, Pub. L. No. 109-432, 120 Stat. 2922, 2925

(2006); Press Release, Sen. Salazar Will Push Legislation for Increased Oil and Gas from Gulf Coast Region to Ease Energy Needs ( July 6, 2006), available at http://www.biological diversity.org/programs/public_lands/energy/dirty_energy_development/oil_and_gas/salazar_oil_and_gas_07-06-2006.html.


ferent lease sales, including the lease to BP.14 This EIS was, by necessity, done at a high level of generality. At this level of generality, MMS esti-mated that there was over a ninety-nine percent chance that one or more spills of greater than 10,000 barrels would occur over the follow-ing forty years.15 Nonetheless, when conducting its risk analysis, MMS considered only two categories of spills, those greater than 1000 barrels, and those less than 1000 barrels.16 Catastrophic spills—those far greater than 1000 barrels—were not independently considered.17 The most likely spill greater than 1000 barrels was estimated at 4600 barrels,18 less than one one-thousandth of the spill that eventually occurred.19 MMS also noted that blowouts are “rare events and of short duration,” which meant that, in its opinion, the “potential impacts to marine water quality are not expected to be significant.”20 Along these same lines, the EIS stated that “a subsurface blowout would have a negligible effect on [Gulf of Mexico] fish resources or commercial fishing.”21

Despite these deficiencies, no further EIS was performed for the individual lease sale of the BP well. Instead, during the lease sale, MMS only prepared an Environmental Assessment (EA). The EA relied on the highly generalized EIS to state that “no new significant impacts were identified for proposed Lease Sale 206 that were not already as-sessed in the Multisale EIS.”22 On that basis, MMS did not require a supplemental EIS, and instead issued a Finding of No New Significant Impact for the lease.23 Similarly, when it came to the actual exploration plan for the leased tract, no further EIS was performed. Instead, BP submitted a so-called “Environmental Impact Analysis” as part of its exploration plan that did not consider the risks of a major blowout, stating that “[a] sce-nario for a potential blowout of the well from which BP would expect

14 See generally Minerals Mgmt. Serv., U.S. Dep’t of the Interior, MMS 2007-018,

Gulf of Mexico OCS Oil and Gas Lease Sales: 2007–2012, Final Environmental Im-pact Statement (2007) [hereinafter MMS Lease EIS].

15 Id. at 4-75. 16 Id. at 4-229. 17 Id. 18 Id. at 4-232. 19 Bryan Walsh, What Ever Happened to the Gulf Oil Spill?, Time (Dec. 20, 2010), http://

www.time.com/time/health/article/0,8599,2037876,00.html. 20 MMS Lease EIS, supra note 14, at 4-260. 21 Id. at 4-295. 22 See Minerals Mgmt. Serv., U.S. Dep’t of the Interior, MMS 2007-059, Proposed

Gulf of Mexico OCS Oil and Gas Lease Sale 206, Central Planning Area, Environ-mental Assessment, at ii (2007).

23 Id.


to have the highest volume of liquid hydrocarbons is not required for the operations proposed in this EP.”24 Such refusal to consider the effects of a blowout was consistent with MMS rulemaking. Specifically, the agency “decided not to impose any prescriptive cementing requirements,” never required an oil spill trajectory analysis for an underwater spill, and exempted all lessees in the Gulf of Mexico from the requirement to submit a blowout scenario as part of their exploration plans, unless they fell into one of four— later expanded to five—categories.25 Indeed, drilling plans in the Gulf of Mexico have been considered categorically exempt from NEPA based on an MMS manual adopted on May 27, 2004.26 Categorical ex-clusions are “a category of actions which do not individually or cumula-tively have a significant effect on the human environment . . . and for which, therefore, neither an environmental assessment nor an envi-ronmental impact statement is required.”27 In other words, MMS con-sidered oil drilling in the Gulf of Mexico to pose so little risk to the en-vironment that it was not even required to assess that risk. A blowout was assumed to be “unlikely to have an impact based on the industry wide standards for using proven equipment and technology for such responses, implementation of BP’s Regional Oil Spill Response Plan which address[es] available equipment and personnel, techniques for containment and recovery and removal of the oil spill.”28 This was true despite the fact that MMS had received a number of reports, prior to the EIS process, concerning the reliability and effectiveness of blind shear rams, the supposed last “failsafe” option to prevent a blowout.29

24 BP Exploration & Production, Initial Exploration Plan, Mississippi Canyon Block 252, OCS-G 32306, at 2-1 (2009) [hereinafter BP Initial Exploration Plan].

25 Memorandum of Supplemental Information Regarding Federal Regulation of Deep-water Drilling from Comm. on Energy & Commerce to Subcomm. on Oversight & Investiga-tions and Subcomm. on Energy & Env’t 5–8 ( July 19, 2010) [hereinafter Energy & Com-merce Memo], available at http://democrats.energycommerce.house.gov/documents/2010 0719/Supplemental.Memo.Deepwater.07.19.2010.pdf

26 See Dep’t of the Interior, No. 516 DM 15, Departmental Manual, Environ-mental Quality Series, Part 516: National Environmental Policy Act, Chapter 15: Managing the NEPA Process—Minerals Management Service 15.4(C)(10) (2004), available at http://elips.doi.gov/app_dm/act_getfiles.cfm?relnum=3625.

27 40 C.F.R. § 1508.4 (2010). 28 BP Initial Exploration Plan, supra note 24, at 14-4 to -5. This was assumed to be

true notwithstanding the fact that BP’s Regional Oil Spill Response Plan for the Gulf of Mexico was full of errors, listing cold water mammals such as walruses as among the sensi-tive species in the Gulf. See BP, Regional Oil Spill Response Plan—Gulf of Mexico, at fig. 11-3 (2009).

29 Energy & Commerce Memo, supra note 25, at 5 (“In the first four years of the Bush administration, MMS received a series of reports that identified serious concerns about the


Even where safety testing was required by regulation, it was not performed.30 MMS regulations required companies “to submit test data proving that their blind shear rams could work on the specific drill pipe used on a well and under the pressures they would encounter.”31 How-ever, when BP applied for its permit to drill the Macondo well, it never submitted this information, and Frank Patton, the engineer in the New Orleans office of MMS who reviewed BP’s application, never asked for it.32 Patton, who had spent “nearly three decades . . . working for the agency and the oil industry,” testified that “‘[w]hen I was in training for this, I was never, as far as I can recall, ever told to look for this state-ment.’”33 While Patton testified that the blowout protector was “‘the most important factor in maintaining safety of the well,’” he also said that he’d “approved hundreds of other well permits in the gulf without requiring this proof” that the blind shear ram technology worked.34 Perhaps most damning is evidence that the agency actually altered environmental review documents in order to speed up approval of oil drilling.35 In 2006, then-MMS biologist Jeff Childs’s analysis predicted that a future spill in Alaska’s Beaufort Sea would be “‘likely to result in significant adverse effects on local [fish] populations.’”36 This finding, which would have forced MMS to prepare a full EIS before it could auc-tion off a lease in the Beaufort Sea, quickly became a matter of “con-cern” to the MMS chief of the environmental assessment section.37 It prompted a note from the regional supervisor for leasing and environ-ment to the effect that this conclusion would “‘not go over well with HQ and others,’” and was eventually rewritten by another manager “[w]hen Childs balked at deleting the finding.”38 Similarly, in a 2000 draft envi-ronmental analysis of deepwater drilling in the Gulf of Mexico, the agency initially wrote that “‘the oil industry’s experience base in deep-water well control is limited’” and that a massive spill “‘could easily turn out to be a potential showstopper for the [Outer Continental Shelf] reliability of subsea BOPs [blowout preventers] and the effectiveness of blind shear rams.”).

30 David Barstow et al., Between Blast and Spill, One Last, Flawed Hope: Lax Oversight of Rig’s Failsafe Device, N.Y. Times, June 21, 2010, at A1.

31 Id.; see 30 C.F.R. § 250.416(e) (2010). 32 Barstow et al., supra note 30. 33 Id. 34 Id. 35 See Juliet Eilperin, U.S. Oil Drilling Regulator Ignored Experts’ Red Flags on Environmental

Risks, Wash. Post, May 25, 2010, at A1. 36 Id. 37 Id. 38 Id.


program if the industry and MMS do not come together as a whole to prevent such an incident.’”39 But when MMS finalized the document, those two statements were removed, and the agency concluded that there was no need to prepare a full-blown EIS, except with respect to certain deepwater components, because “[m]ost deepwater operations and activities are substantially the same as those associated with conven-tional operations and activities on the continental shelf.”40 In sum, the environmental review process for deepwater drilling in the Gulf of Mexico—and in general—appears to have been subsumed to the overall goal of “drill, baby, drill.”41 The review process was lax, categorical exclusions proliferated, risks were either ignored or excised from review documents, and permits were approved without the re-quired assurances.42 What caused this confluence of failures? And what can be done to prevent such failures in the future? These questions are the subject of our analysis.

II. A Group Pathologies Account of Regulatory Failure

A. Groupthink

The failure to even consider, let alone manage, the environmental risks of deepwater drilling may well have proceeded from an assump-tion that such drilling was safe. How could such an assumption have survived given the contrary information, in particular the series of re-ports describing the vulnerability of the blind shear ram? Social psy-chologists have long recognized that groups that share common as-sumptions can be surprisingly resistant to having such assumptions challenged.43 In his famous study of failure in group decision-making, Irving Janis coined the term “groupthink” to refer to “a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members’ strivings for unanimity override their motivation to

39 Id. 40 Minerals Mgmt. Serv., U.S. Dep’t of the Interior, MMS 2000-001, Gulf of

Mexico Deepwater Operations and Activities, Environmental Assessment, at iv (2000); Eilperin, supra note 35.

41 Eilperin, supra note 35; Siobhan Hughes, Steele Gives GOP Delegates New Cheer: ‘Drill, Baby, Drill!’, Wall St. J. (Sept. 3, 2008, 10:50 PM), http://blogs.wsj.com/washwire/2008/ 09/03/steele-gives-gop-delegates-new-cheer-drill-baby-drill/tab/article.

42 See Eilperin, supra note 35. 43 See Irving L. Janis, Groupthink: Psychological Studies of Policy Decisions

and Fiascoes 5 (2d ed. 1982).


realistically appraise alternative courses of action.”44 Groupthink does not depend on invidious motives, but is exacerbated by a strong leader whose bias is known—a bias that the members of the group strive to form unanimity around.45 Lack of diversity in training and background also exacerbates groupthink tendencies, as does a homogenous culture and ideology.46 Groups subject to these factors can be impervious to evidence that does not conform with preconceived notions.47 Before applying this notion of groupthink to explain why industry and MMS could have been so blind to the risk of a blowout, it is worth noting a couple of caveats. First, the traditional groupthink model con-cerns the actions of a discrete group given a discrete task.48 In the case of the BP disaster, however, there is no single discrete group that was blinded to the environmental risks. Indeed, it seems that all the envi-ronmental reviews, done by either the government or industry, and all the disaster planning failed to consider a risk that, in hindsight, seems clearly like it should have been considered even if the risk was small.49 The groupthink analysis we employ is thus in some sense larger than the traditional analysis, although it is in keeping with several scholars’ suggestion that the groupthink dynamic is actually quite common, es-pecially in governmental decision-making.50 Second, it is worth noting that the explanatory power of the groupthink theory has been criticized in the academic literature.51 Does groupthink cause bad outcomes? Janis’s original series of case

44 Irving L. Janis, Victims of Groupthink: A Psychological Study of Foreign-

Policy Decisions and Fiascoes 9 (1972). 45 See Robert S. Baron et al., Group Process, Group Decision, Group Action 71

(1992); Janis, supra note 44, at 197. 46 See Janis, supra note 44, at 250; Stefan Schulz-Hardt et al., Biased Information Search in

Group Decision Making, 78 J. Personality & Soc. Psychol. 655, 656 (2000). 47 See Janis, supra note 44, at 37 (describing groupthink tendency of “selectively attend-

ing to the messages that feed into the members’ shared feelings of confidence and opti-mism, disregarding those that do not”).

48 Id. at 10 (describing the origins of groupthink research in examining “defective de-cision[s] . . . made in a series of meetings by a few policy-makers who constituted a cohe-sive group”).

49 See supra text accompanying notes 20–23 (government EIS and EA process); supra text accompanying note 24 (BP environmental analysis).

50 See Mark Seidenfeld, Cognitive Loafing, Social Conformity, and Judicial Review of Agency Rulemaking, 87 Cornell L. Rev. 486, 542–43 (2002).

51 See Jin Nam Choi & Myung Un Kim, The Organizational Application of Groupthink and Its Limitations in Organizations, 84 J. Applied Psychol. 297, 302 (1999) (questioning the coherence of groupthink through an empirical analysis that shows some groupthink symp-toms, such as group identity, were positively correlated to a team’s performance under experimental conditions).


studies, by focusing exclusively on foreign policy fiascoes, cannot an-swer this question. While Janis found examples of groupthink in the decision-making process leading up to these fiascoes, he failed to show that groupthink is absent, or attenuated, in decision-making processes that do not lead to bad outcomes. Attempts to empirically verify the causal link between groupthink and bad outcomes have met with mixed results.52 Part of the difficulty is that Janis identified a number of different antecedent conditions, both in terms of the organization’s structure and in terms of the particular situation the organization faced, that would lead to groupthink.53 Laboratory research has there-fore been made difficult because it can only include a certain number of variables, and therefore lacks the authenticity of a real life decision.54 Laboratory research has also been criticized because “no consensus ex-ists on how to appropriately operationalize some antecedents (e.g., co-hesion)” and because “we have not yet developed reliable measures for many of the groupthink symptoms.”55 There is also no consensus about what we mean by a “bad” outcome decision. Nonetheless, there is sufficient support for the notion that some form of groupthink leads to a predictable discounting of risks, which, in turn, bears some probabilistic relationship to bad outcomes, however they are defined.56 At a high level of generality, groupthink phenom-ena have been observed in the failure of corporate boards to conduct meaningful oversight in the wake of the Enron debacle,57 the stifling of

52 See Sally Riggs Fuller & Ramon J. Aldag, Organizational Tonypandy: Lessons from a Quarter Century of the Groupthink Phenomenon, 73 Org. Behavior & Human Decision Processes 163, 166 (1998) (literature review of empirical research); Won-Woo Park, A Review of Research on Groupthink, 3 J. Behavioral Decision Making 229, 229–30 (1990) (summarizing previous empirical studies and indicating problems in those studies).

53 See Steve Yetiv, Groupthink and the Gulf Crisis, 33 British J. Pol. Sci. 419, 421 (2003). Yetiv cites to Janis’s work to list four structural faults of the organization: (1) insulation of the group; (2) lack of traditional impartial leadership; (3) lack of norms requiring me-thodical procedures; and (4) homogeneity of members’ social background and ideology. Id. He also cites to Janis’s work to identify two elements of provocative situational conflict: (1) high stress from external threats with low hope of a better solution than the leader’s; and (2) low self-esteem temporarily induced by: (a) recent failures that made members’ inadequacies salient; (b) excessive difficulties on current decision-making tasks lower each member’s sense of self-efficacy; and (c) moral dilemmas based on an apparent lack of fea-sible alternatives except ones that violate ethical norms. Id.

54 See Paul ‘t Hart, Irving L. Janis’ Victims of Groupthink, 12 Pol. Psychol. 247, 247–78 (1991).

55 See James K. Esser, Alive and Well After 25 Years: A Review of Groupthink Research, 73 Org. Behavior & Human Decision Processes 116, 139 (1998).

56 See Janis, supra note 44, at 37; Yetiv, supra note 53, at 437. 57 See Jayne W. Barnard, Institutional Investors and the New Corporate Governance, 69 N.C.

L. Rev. 1135, 1171–72 (1991); John Alan Cohan, “I Didn’t Know” and “I Was Only Doing My


dissent by administrative agencies,58 environmental regulation in gen-eral,59 and the conduct of the Army Corps of Engineers before Hurri-cane Katrina in particular.60 There are sufficient indicia that groupthink may have played a role in the discounting of environmental risks in the Gulf of Mexico. Oil drilling regulators and industry in the Gulf were known to be fairly homogenous in terms of their ideology and social background, which is an important factor in the development of groupthink.61 In terms of ideology, both industry and MMS were, in recent years, invested in in-creasing deepwater drilling in the Gulf.62 The agency has been de-scribed as the province of engineers who are at war with biologists who have counseled caution.63 As one marine biologist who left the agency has stated, “‘[i]n order to get promoted at MMS, you better get in-vested in this pro-development oil culture.’”64 This ideology apparently did not change after the Bush Administration ended.65 “‘Employees describe being in Interior—not just MMS, but the other agencies—as

Job”: Has Corporate Governance Careened Out of Control? A Case Study of Enron’s Information Myopia, 40 J. Bus. Ethics 275, 282 (2002); Michael B. Dorff, Confident Uncertainty, Excessive Compensation & the Obama Plan, 85 Ind. L.J. 491, 515 (2010); John R. Kroger, Enron, Fraud, and Securities Reform: An Enron Prosecutor’s Perspective, 76 U. Colo. L. Rev. 57, 84 (2005); Donald C. Langevoort, The Human Nature of Corporate Boards: Law, Norms, and the Unin-tended Consequences of Independence and Accountability, 89 Geo. L.J. 797, 810–11 (2001); Mi-chael E. Murphy, Restoring Trust in Corporate America: Toward a Republican Theory of Corporate Legitimacy, 5 N.Y.U. J. L. & Bus. 415, 480 (2009); Carol A. Needham, Listening to Cassandra: The Difficulty of Recognizing Risks and Taking Action, 78 Fordham L. Rev. 2329, 2344–45 (2010); Marleen A. O’Connor, The Enron Board: The Perils of Groupthink, 71 U. Cin. L. Rev. 1233, 1237–38 (2003).

58 See Stephen J. Choi & A.C. Pritchard, Behavioral Economics and the SEC, 56 Stan. L. Rev. 1, 33 (2003); Seidenfeld supra note 50, at 541; Mark Seidenfeld, Why Agencies Act: A Reassessment of the Ossification Critique of Judicial Review, 70 Ohio St. L.J. 251, 306–07 (2009).

59 See Molly J. Walker Wilson, A Behavioral Critique of Command-And-Control Environ-mental Regulation, 16 Fordham Envtl. L. Rev. 223, 224 (2005).

60 See Daniel A. Farber et al., Reinventing Flood Control, 81 Tul. L. Rev. 1085, 1102–03 (2007).

61 See Office of Inspector Gen., U.S. Dep’t of the Interior, Investigative Report: Island Operating Company et al. 3 (2010) [hereinafter Investigative Report], available at http://www.doioig.gov/images/stories/reports/pdf/IslandOperatingCo.pdf; Janis, supra note 44, at 191–92.

62 See Dickinson, supra note 12, at 56–57. 63 See Eilperin, supra note 35. 64 Dickinson, supra note 12, at 57. 65 Id. at 56–57 (discussing President Obama’s Secretary of the Interior Ken Salazar’s

aggressive promotion of offshore drilling).


the third Bush term. . . . They’re working for the same managers who are implementing the same policies.’”66 The homogeneity in both social background and ideology be-tween MMS and oil company employees was highlighted in May 2010, as the BP oil spill raged, when the Interior Department’s Office of the Inspector General issued a report concerning MMS employees’ receiv-ing inappropriate gifts from the Island Operating Company.67 The re-port “found that a culture of accepting gifts from oil and gas companies was prevalent throughout the MMS Lake Charles office”68 in Louisiana, and that “the individuals involved in the fraternizing and gift ex-change—both government and industry—have often known one an-other since childhood.”69 The MMS Lake Charles District Manager Larry Williamson told Inspector General investigators that “many of the MMS inspectors had worked for the oil and gas industry and con-tinued to be friends with industry representatives.”70 Williamson fur-ther stated that “‘[w]e’re all from the same part of the country. Almost all of our inspectors have worked for oil companies out on these same platforms. They grew up in the same towns. Some of these people, they’ve been friends with all their life.’”71 The danger of such homogeneity is the lack of any credible outside voice that might challenge the assumptions of the group—assumptions such as the impact from an exploratory well blowout.72 Indeed, after the spill, David J. Hayes, the Deputy Secretary of the Interior, claimed in an interview that “‘[w]hat happened to all the stakeholders—Congress, environmental groups, industry, the government—all stakeholders in-volved were lulled into a sense of what has turned out to be false secu-rity.’”73 This false sense of security under the groupthink model was likely exacerbated by leadership that was pushing to approve oil drilling pro-jects as quickly as possible, and that itself discounted the environmental

66 Id. at 58 (quoting Jeff Ruch, executive director of Public Employees for Environ-mental Responsibility, a group that represents federal whistle-blowers).

67 Investigative Report, supra note 61, at 1 (describing the Island Operating Com-pany as “an oil and gas production company working on oil platforms in the Gulf of Mex-ico”).

68 Id. 69 Memorandum on Investigative Report—Island Operating Company et al. from Mary

L. Kendall, Acting Inspector Gen., Dep’t of the Interior, to Sec’y Salazar (May 24, 2010), available at http://www.doioig.gov/images/stories/reports/pdf/IslandOperatingCo.pdf.

70 Investigative Report, supra note 61, at 3. 71 Id. 72 See Janis, supra note 44, at 39. 73 See Barstow et al., supra note 30.


risks.74 For example, Vice President Cheney’s 2001 report describing the Bush Administration’s new energy strategy stated that “exploration and production from the OCS [Outer Continental Shelf] has an impressive environmental record” and that “delays and uncertainties can hinder proper energy exploration and production projects.”75 President Bush issued an executive order instructing agencies that “[f]or energy-related projects, agencies shall expedite their review of permits or take other actions as necessary to accelerate the completion of such projects”76 and Interior Secretary Gale Norton implemented royalty relief programs to heighten the incentives for offshore drilling.77 In light of the clear pref-erence of leadership to emphasize more drilling, and de-emphasize en-vironmental risks, it is no surprise that the decision-making groups re-flected these same preferences.78 Promotional leadership is a key predictor of the groupthink phenomenon.79

B. Group Polarization

This single-minded focus on drilling may also have led to a cogni-tive bias related to groupthink—group polarization. Put simply, group polarization is the “process whereby group discussion tends to intensify group opinion, producing more extreme judgments among group members than existed before discussion.”80 This process is either due to an informational mechanism, where group members hear more ar-

74 See 30 C.F.R. § 250.233 (2010) (requiring MMS to approve, disapprove, or require

modifications of a proposed exploration plan within thirty days of submission); Seidenfeld, supra note 50, at 543 (finding the time pressure on agencies may exacerbate groupthink); Eilperin, supra note 35 (chronicling MMS’s history of pushing projects through quickly at all costs, even when faced with warnings of great environmental risk).

75 Energy & Commerce Memo, supra note 25, at 3. 76 Exec. Order No. 13,212, 3 C.F.R. 769 (2002). 77 See Press Release, Minerals Mgmt. Serv., Dep’t of Interior, Spurred by Incentives, Oil

and Gas Production in the Gulf of Mexico Expected to Increase Over the Next Decade (Nov. 15, 2004), available at http://www.boemre.gov/ooc/press/2004/press1115.htm.

78 See Dickinson, supra note 12, at 56–57; Eilperin, supra note 35. 79 See Noni Richardson Ahlfinger & James K. Esser, Testing the Groupthink Model: Effects of

Promotional Leadership and Conformity Predisposition, 29 Soc. Behav. & Personality 31, 39 (2001) (finding that “groups with promotional leaders produced more symptoms of group-think, discussed fewer facts, and reached a decision more quickly than did groups with non-promotional leadership”); Clark McCauley, The Nature of Social Influence in Groupthink: Compli-ance and Internalization, 57 J. Personality & Soc. Psychol. 250, 252 (1989) (defining promotional leadership as “a leader who early in discussion reveals a favored policy alterna-tive, especially in the absence of methodical procedures for generating and evaluating alter-natives” and finding, in reviewing historical examples, that promotional leadership predicts occurrence of groupthink).

80 See Baron et al., supra note 45, at 73.


guments for a favored outcome, or a normative one, where group members compete to show they share an underlying value or norm.81

In the case of offshore drilling, group polarization may have only exacerbated the faith in technology and the discounting of environ-mental risks, both of which were needed to assume that drilling was safe. Whether environmental risk was seen as a factual prediction, e.g., everyone knows that blowout protectors are safe, or an underlying value, e.g., oil drilling is good for the nation, this particular group dy-namic may have led to a more extreme discounting of risk than would have been the case had the relevant personnel been working alone. This is especially true when group members share the same back-ground, were trained in a similar manner, and work on similar pro-jects.82 In that case, due to the availability heuristic,83 they are “apt to be facile at recalling the same types of events and therefore might all overestimate the probability for the occurrence of that type of event.”84 Given the common social background and ideology described above, it is no surprise that everyone involved in assessing environmental risks of offshore drilling underestimated those risks, and overestimated the ex-tent to which technology could overcome any blowout that did occur.85 In light of the availability heuristic, it is also significant that deepwater drilling was a recent phenomenon, and that shallow-water spills, which would have been more familiar to the individuals involved, were less catastrophic and much easier to control.86 No spill comparable to the BP spill had ever occurred before in United States-controlled waters.87

C. Group Confirmation Bias

Group confirmation bias occurs when groups “search unduly for information and pay too much attention to arguments that confirm

81 Seidenfeld, supra note 50, at 535–36. 82 Id. at 537. 83 Id. at 501 (“Individuals tend to rely on the availability heuristic—the facility with

which they can recall a type of event—as an indication of the probability that such an event will reoccur. The availability heuristic leads individuals to overestimate the probability of an event that comes easily to mind.”)

84 Id. at 537. 85 See supra notes 67–71 and accompanying text. 86 See Offshore Oil Drilling in Shallow Water: Good Safety Record, Less Risky, Inst. Energy

Res. (Oct. 21, 2010), http://www.instituteforenergyresearch.org/2010/10/21/offshore-oil-drilling-in-shallow-water-good-safety-record-less-risky.

87 Campbell Robertson & Clifford Krauss, Gulf Spill Is the Largest of Its Kind, Scientists Say, N.Y. Times, Aug. 3, 2010, at A14.


initial hypotheses.”88 While individuals are of course subject to this same bias, it may become exacerbated in groups due to the group po-larization phenomena described above.89 Thus, “[e]ven when some group members may be aware of information that undermines a group’s initially preferred decision, the group may fail to consider the information to the same extent as it would consider confirming infor-mation.”90 The initial hypothesis of most decision makers, both within industry and the agency, would have been that deepwater drilling was safe, technological safeguards were reliable, and oil spill response ca-pabilities were robust.91 In such a climate, it comes as no surprise that contrary information never made it into any environmental review. The important insight of the group pathologies approach, though, is that the lack of regard for environment risk may not have been the result of any evil or calculating motive.92 Instead, it may have stemmed from a genuine—if flawed—belief that such risks were low, and that even if a blowout occurred, technological safeguards would prevent catastrophe.93 The specific warnings of the inadequacy of existing tech-nology would have been either brushed aside as the product of igno-rant outsiders, or overly zealous engineers, or simply not known within the relatively insulated groups making key decisions.94 This phenome-non may have been exacerbated by leadership bias and by the pressure to perform environmental reviews quickly.95 Interestingly, the tiered nature of environmental reviews—where an EIS was performed at the programmatic level, only an EA at the lease level, and nothing formal at all at the drilling level—may have made it easier for decision makers at the lower levels to ignore warnings by assuring themselves that proper reviews were done at the higher levels.96 In this sense, the tiers may have functioned as a ready excuse to ignore information such as envi-ronmental risks that may have challenged the dominant ideology of the group. The group could always tell itself that such risks were already

88 See Seidenfeld, supra note 50, at 538. 89 See Schulz-Hardt, supra note 46, at 665. 90 See Seidenfeld, supra note 50, at 538. 91 See Nat’l Comm’n on the BP Deepwater Horizon Oil Spill and Offshore

Drilling, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling 294 (2011) [hereinafter BP Commission Report].

92 See id. at 52. 93 See Alyson C. Flournoy, Three Lessons We Should Learn from the BP Deepwater Horizon

Disaster and Why We Won’t, 38 B.C. Envtl. Aff. L. Rev. 279, 289 (2011). 94 See id. 95 See Ahlfinger & Esser, supra note 79, at 39 (leadership bias); McCauley, supra note

79, at 252 (leadership bias). 96 See BP Commission Report, supra note 91, at 260.


considered, further insulating itself from any contemplation of catas-trophe.

III. A Ruthless Calculation/Capture Account of Regulatory Failure

Of course there is another possible explanation for the flawed en-vironmental reviews that occurred before the spill. Put simply, BP may not have been honestly blinded to the risk. Instead, it may have ration-ally, if ruthlessly, calculated the relative costs and benefits of doing nothing, rather than taking proactive steps to protect against risk, and determined the former was the better value choice. Pursuant to such a rational calculation, BP simply co-opted MMS with its strategy of down-playing environmental risks.97 To address the risk of a blowout protector failure before a spill, BP would have had to expend money, perhaps a good deal of it.98 If BP had understood the risk to be relatively immediate and quite large, then it might well have decided that the investment of resources in pre-vention now would be justified on a cost-benefit basis. We doubt that was BP’s understanding. But imagine that BP actually understood that there was some non-negligible risk of a blowout, albeit a risk such that a spill was very unlikely and almost impossible to quantify. We maintain that it is possible to understand BP’s decision to ignore a perceived modest, but non-negligible risk of a major spill as perfectly rational from a corporate wealth maximization perspective.99 How could that be a rational calculation? For one thing, the lesson for the oil industry—and not just the oil industry—from the Exxon-Valdez, the pre-BP biggest spill in United States history, arguably is that causing a major environmental and economic disaster is not necessarily the end of the world for a powerful company.100 In the wake of the Exxon-Valdez spill, Exxon has ferociously and quite successfully liti-gated the issue of its liability and in particular its liability for punitive damages.101 At the same time, Exxon managed to secure an an-

97 See Flournoy, supra note 93, at 284. 98 See BP Commission Report, supra note 91, at 51–52, 55. 99 See Michael C. Jensen, Value Maximization, Stakeholder Theory, and the Corporate Objec-

tive Function, 12 Bus. Ethics Q. 235, 236, 239 (2002). 100 Zygmunt J.B. Plater, Exxon Valdez Re-Surfaces in the Gulf of Mexico and the Hazards of

Megasystem Centripetal Di-Polarity, 38 B.C. Envtl. Aff. L. Rev. 389, 391–92 & n.4 (2011). 101 Exxon Shipping Co. v. Baker, 554 U.S. 471, 471, 514 (2008). The Supreme Court

reduced Exxon’s punitive damage award from $5 billion to just over $500 million. Id. Exxon has paid only a portion of the $500 million to date. See Susan Lyon & Daniel J.


nouncement by the federal government that the spill cleanup had been completed by 1992, even though by many accounts much of the oil was never recovered, and ecological effects continue to be felt to this day.102 In the immediate wake of Exxon-Valdez and up until the present day, Exxon has continued to be a fantastically profitable company.103 The legal environment in which BP and other companies operate also makes intentional inaction in the face of non-negligible risk a ra-tional strategy. Ex ante, before the spill, a rationally calculating BP would have understood that U.S. corporate, bankruptcy, and tort law would operate to allow the company to cap any liability exposure from any major spill. A rationally calculating BP would have known that, by building and operating the well in tandem with other companies, it would share liability for a spill under applicable tort law principles.104 By operating the well via a subsidiary, a rationally calculating BP would have known that it effectively capped its liability because prevailing corporate law principles make it exceedingly difficult to pierce the veil and collect from the parent company.105 And BP, again in the rational calculator model, also would have considered that the threat of Chap-ter 11 bankruptcy of the subsidiary in the event of a spill would dis-suade the government and other actors from pressing their claims too aggressively.106 A rationally calculating BP also would have understood

Weiss, Making Money on an Oil Disaster: Will BP Take Responsibility, or Squeeze the Tragedy for Profits the Way Exxon Did?, Climate Progress (May 27, 2010), http://climateprogress. org/2010/05/27/exxon-valdez-bp-oil-disaste/.

102 See Mike Lewis, Exxon Still Owes for Valdez Spill, Seattle Pi, (Mar. 13, 2006), http:// www.seattlepi.com/local/262707_exxonsettle13.html.

103 See Susan Lyon & Daniel J. Weiss, Oil Spills by the Numbers, Ctr. for Am. Progress (Apr. 30, 2010), http://www.americanprogress.org/pressroom/releases/2010/04/oilspill_bythenumbers.html. Exxon reported $5 billion in earnings the year after the spill (1990) and $295 billion in profits in the years from 2001 to 2009. Id.; see also John Holusha, Exxon Has Threefold Profit Rise, N.Y. Times, Jan. 25, 1991, at D13.

104 See Ben Casselman & Spencer Swartz, BP Report Pins Most of Blame on Others, Wall St. J., Sept. 9, 2010, at A4. Sharing liability appears to be the goal of a recent BP self-assessment regarding the spill, which lays much of the blame on BP’s partners in the con-struction, management, and operation of the well. Id.

105 See Steven M. Davidoff, BP’s Options to Limit Liability from the Oil Spill, N.Y. Times ( June 16, 2010, 10:42 AM), http://dealbook.nytimes.com/2010/06/15/bps-options-to-limit-liability- from-the-oil-spill/. Moreover, the United States Supreme Court has read the federal envi-ronmental laws as implicitly incorporating this protection for corporate parents. See United States v. Bestfoods, 524 U.S. 51, 61–62 (1998).

106 See, e.g., Glenn Thrush, Louisiana’s Treasurer Frets Over BP Bankruptcy, Politico ( June 1, 2010, 8:42 PM), http://www.politico.com/news/stories/0610/38435.html. See generally Lynn M. LoPucki, The Death of Liability, 106 Yale L.J. 1 (1996) (arguing that U.S. corporations are increasingly using bankruptcy and the threat of bankruptcy to effectively limit liability risks).


that—the risk of bankruptcy aside—the central importance of the company for the local Gulf and U.S. economy would be a strong disin-centive for the federal or state governments to punish the company enough to harm its ability to operate effectively in the United States.107 And a rationally calculating BP would also have understood that any costly regulatory reforms adopted in the wake of a spill likely would be borne by BP and its competitors alike, so that its competitive posture would not be changed vis-à-vis its competitors.108 What has happened since the Deepwater Horizon blowout protec-tor failed, moreover, would seem to confirm that a deliberative strategy of doing nothing proactive in the face of a perceived non-negligible risk would have been, ex ante, quite rational. For its part, the U.S. govern-ment appears poised not to take punitive actions against BP and, quite to the contrary, has allegedly downplayed the magnitude and effects of the spill—all of which is to BP’s advantage.109 The House bill that was passed and would impose new restrictions on BP as well as other com-panies in the Gulf is stalled, perhaps permanently, in the Senate.110 Shortly after announcing a federal moratorium on deepwater drilling, the federal government lifted the moratorium for all drilling companies in the Gulf.111 While BP has been harshly criticized by some in the Gulf, local leaders and residents have been adamant in their desire to see BP, and the other companies, continue to expand drilling there.112

107 See BP Commission Report, supra note 91, at x–xi. 108 See, e.g., Consolidated Land, Energy, and Aquatic Resources Act of 2010, H.R. 3534,

111th Cong. (2010). The House bill passed in the wake of the Deepwater Horizon disaster and contains a variety of provisions tightening regulatory review for all companies operat-ing in the Gulf. Id. §§ 201–225.

109 See, e.g., Suzanne Goldenberg, Gulf Oil Spill: White House Blocked and Put Spin on Scien-tists’ Warnings, Guardian (London), Oct. 7, 2010, http://www.guardian.co.uk/environment/ 2010/oct/07/gulf-oil-spill-report-white-house; Julia Whitty, The BP Cover Up, Mother Jones, Sept.–Oct. 2010, at 29.

110 See Bill Summary & Status 111th Congress (2009–2010) H.R. 3534, Libr. of Congress, Thomas, http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.03534: (last visited Apr. 15, 2011) (noting last major action was placement on Senate Legislative Calendar on August 4, 2010).

111 Peter Baker, White House Is Lifting Ban on Deepwater Drilling, N.Y. Times (Oct. 12, 2010, 11:45 AM), http://thecaucus.blogs.nytimes.com/2010/10/12/white-house-to-lift-ban-on-deepwater-drilling/.

112 See, e.g., Brandon Richards, Thousands Expected to Protest Moratorium, KPLC ( July 20, 2010, 7:34 PM), http://www.kplctv.com/Global/story.asp?S=12838792; Sabrina Wilson, Local Leaders Bombard President Over Moratorium, Fox8Live ( June 4, 2010, 7:41 PM), http:// www.fox8live.com/news/local/story/Local-leaders-bombard-president-over-moratorium/5 UoBzOkc4ESPpvwtD65C1g.cspx.


The rational, ruthless calculator story of how BP and the other companies failed to plan for the possibility of a failure of a blowout preventer, of course, only makes sense because government regulators did not force the companies to address that possibility. This regulatory failure could be attributed to groupthink at MMS and elsewhere, as suggested above: key regulators, if not the top management of the companies, may simply have bought in and held onto as orthodoxy the oil companies’ narrative that blowout protectors simply do not fail and hence no meaningful contingency planning was needed. But it is also possible that key regulators did not absorb this narrative and hence all else being equal may have wanted the companies to take more action, but they were too overwhelmed by corporate influence to take any ef-fective action in this regard. The agencies were captured because of: (1) the political power of oil companies in Congress and the executive branch, due to campaign contributions and other support; (2) the agency staff’s desire to please the companies and secure possible per-sonal benefits; and (3) good relations with the companies, which could be seen as a road to success, both within the agency and in the private sector.113 The capture story is not exclusive of the agency groupthink one: a dominant corporate narrative about the infallibility of blowout protectors may have been adopted by the relevant agencies, and this group mindset plus the raw power and possible benefits offered by and possible retribution from the companies may have operated in tandem to quiet any voices within the agencies who might have effectively pushed for tougher agency actions requiring proactive and precaution-ary planning on the part of the companies.

IV. Reforming NEPA to Address Group Pathologies, Ruthless Calculation, and Capture

If the failure of environmental reviews was due to either group pa-thologies, namely groupthink encompassing the agency and industry actors, or industry’s ruthless calculation coupled with agency capture, then most of the reforms being called for in the environmental review process will do nothing to prevent similar failures in the future.114 The Council of Environmental Quality (CEQ), for example, has called for greater coordination among successive reviews in the environmental re-

113 See BP Commission Report, supra note 91, at 67, 77; see also Plater, supra note 100,

at 391–92, 398. 114 See Flournoy, supra note 93, at 287–93.


view process of the leasing, exploration, and drilling in offshore areas.115 The CEQ—and not just the CEQ—has called for a reconsideration, and perhaps limitation, on the use of the grants of categorical exclusions to otherwise applicable review requirements.116 Greater coordination and fewer or no categorical exclusions are completely unobjectionable re-forms, and they are responsive to the failures of MMS.117 But if the group pathology or ruthless calculator/capture accounts are descriptively cor-rect, these proposed reforms will not ensure that industry takes greater precautions to prevent and prepare for the contingency of ecological disasters. If group pathology is in play, more coordination among successive reviews, and a greater number of reviews due to fewer categorical ex-clusions will not result in stronger preventative measures and contin-gency planning. That is because there will not be strong voices within the agency or industry to push for more prevention and contingency planning. And if drafts of the reviews do contain such calls, top agency officials, immersed in a group pathology, are likely to alter those drafts or ignore them, thus allowing industry to ignore them as well.118 If we assume instead that industry is a highly realistic but ruthlessly calculat-ing entity and that agencies are captured, we likewise would expect bet-ter coordinated and more reviews to translate into higher transactions costs, such as longer federal register notices, but not to change industry behavior. And the same is true of calls to reform NEPA by reinstituting worst-case scenario requirements for EISs, however sound those calls may be.119 Such a requirement will not meaningfully change the sub-stance of EISs, agency requirements, and industry behavior when

115 See Council on Envtl. Quality, Report Regarding the Minerals Manage-

ments Service’s National Environmental Policy Act Policies, Practices, and Pro-cedures as They Relate to Outer Continental Shelf Oil and Gas Exploration and Development 4 (2010), available at http://www.whitehouse.gov/sites/default/files/micro sites/ceq/20100816-ceq-mms-ocs-nepa.pdf.

116 See id. at 4–5. 117 See supra Part I. 118 See The Minerals Management Service: Bad Science in the Name of Private Interests, Union

Concerned Scientists, http://www.ucsusa.org/scientific_integrity/abuses_of_science/mms-bad science.html (last updated Aug. 4, 2010) (reporting how biologist Jeff Childs’s reports were altered or deleted by MMS from inclusion in an Environmental Assessment).

119 See Holly Doremus, Through Another’s Eyes: Getting the Benefit of Outside Perspectives in en-vironmental Review, 38 B.C. Envtl. Aff. L. Rev. 245, 248–49 (2011); Holly Doremus, A Great Case for Worst Case Analysis, Legal Planet (May 1, 2010), http://legalplanet.wordpress.com/ 2010/05/01/a-great-case-for-worst-case-analysis/.


groupthink or ruthless calculation/capture describes the mindset of agency and industry actors.120 Changes in formal NEPA requirements, however, could perhaps have a real impact when bolstered by enforcement via citizen suits.121 However, the national environmental non-governmental organizations (NGOs)—the groups that are best able to mount effective litigation— essentially ignored the Gulf region before the BP oil spill.122 Putting aside the perhaps temporary attention these groups are paying to the Gulf in the wake of the BP spill, government regulators and industry can engage in natural resource extraction in significant swathes of the nation without much fear of a well-litigated NEPA suit or of local politi-cians being embarrassed or galvanized by any such suit that is brought.123 Moreover, the federal judiciary has been notably hostile to NEPA litigation, particularly in recent years, and, as Dan Farber has pointed out, often has given agencies a pass on environmental reviews that ignore the most obvious and potentially most dangerous risk from the proposed agency action.124 It would be reasonable for the national environmental NGOs to anticipate a particularly cool judicial reception in those regions like the Gulf States, moreover, where the environmental groups are not strong in membership, do not have much influence among local politicians, and where extractive industries form a center-piece of the local economy. If better NEPA-style review, and more coordination of that review, is unlikely to have an effect where the groupthink or ruthless calculator accounts are applicable, and NGOs and the courts cannot be relied upon to play a constructive role, then what reforms would make a dif-ference? We suggest that to make a difference, the environmental re-view has to be re-conceptualized. In the dominant NEPA model, the review is undertaken by the “action agency,” which was MMS in the Gulf context, often with required consultation by expert federal agen-cies, such as Department of Interior’s Fish and Wildlife Service.125 Even

120 See Flournoy, supra note 93, at 286–86. 121 See, e.g., Cetacean Cmty. v. Bush, 386 F.3d 1169, 1179 (9th Cir. 2004) (explaining

how citizens can obtain enforcement of NEPA rights). 122 See Mike Soraghan, Enviro Groups Ignored Gulf Before BP Disaster, N.Y. Times, Sept. 27,

2010, http://www.nytimes.com/gwire/2010/09/27/27greenwire-enviro-groups-ignored-gulf- before-bp-disaster-96055.html.

123 See id. 124 See Daniel A. Farber, Confronting Uncertainty Under NEPA, Issues Legal Scholar-

ship, vol. 8, issue 3, art. 3, at 24–25 (2009), http://www.bepress.com/ils/vol8/iss3/art3. 125 See 40 C.F.R. § 1501.6 (2010) (describing the responsibilities of the lead agency in

conjunction with cooperating agencies).


if the industry actor, such as BP, in fact does much of the work and even writes the review, the review carries the action agency’s name and it is that agency that bears the risk of being sued or criticized for its inade-quacies.126 In some instances, agencies such as MMS may have other regulatory review requirements that oblige a permit applicant or other private actor to conduct an environmental review that is formally sepa-rate from the NEPA process.127 Even where this is so, the consequences of not conducting the review, or conducting it poorly, are minimal for the industry actor if the agency in fact is absorbed in a complacency-inspiring groupthink or has been captured.128 BP and the other oil companies could prepare oil spill response plans in 2009 that refer-enced walruses in the Gulf—even though none have been there for centuries—because they knew it did not matter.129 Nothing was at stake. Now imagine that we re-conceptualize NEPA and related environ-mental reviews in two important respects. First, instead of being seen as a process or requirement that the agency manages and takes legal re-sponsibility for, the NEPA process would be openly recognized as an undertaking of the company seeking the award of a lease or other benefit from the government agency. BP and other companies would have to fully own their reviews, and the lack of quality or comprehen-siveness in them. Second, rather than being seen as having no down-side consequences, at least in the absence of a citizen suit, the envi-ronmental review would have potentially serious consequences for the company’s bottom line; companies could be severely penalized finan-cially for having conducted a dishonest or grossly inadequate environ-mental review as part of the process of obtaining the lease, exploration plan approval, or permission to drill. Imagine, in particular, a scheme in which a company such as BP would be required to conduct and pub-lish an environmental review at the time of leasing, exploration, and drilling, and then its rights to retain any leases, exploration plan ap-provals, or drilling permissions would be tied to the quality of the envi-

126 See National Environmental Policy Act of 1969 § 102, 42 U.S.C. § 4332(c) (2006)

(providing that all federal agencies shall prepare environmental assessments for “major Federal actions”).

127 See, e.g., 30 C.F.R. § 250.203–.204, .254 (2010) (regulations requiring a company proposing to drill to prepare and submit an Oil Spill Contingency Plan).

128 See supra Parts II & III (discussing groupthink and agency capture). 129 See Jake Sherman, Walruses in the Gulf of Mexico?, Politico ( June 15, 2010, 9:58 AM),

http://www.politico.com/blogs/glennthrush/0610/Walruses_in_the_Gulf_of_Mexico.html (quoting Congressman Markey’s explanation that in addition to BP, the spill response plans of “three other companies include references to protecting walruses which have not called the Gulf of Mexico home for 3 million years”).


ronmental review it submitted to the agency. The company also would have a duty to update its reviews, in the same way that agencies have a duty now to update their reviews under NEPA when new information comes to light.130 If it were later discovered that the company’s envi-ronmental review was conducted in a dishonest or grossly inadequate way, the lease, approval, or permission could be rescinded without the payment of any compensation.131 In the case of a rescinded lease, the government would then be free to re-lease the relevant tract. In the case of a rescinded exploration plan approval or drilling plan permis-sion, the lease would remain in place but the lessee would need to re-start the process of obtaining the required approval, including the completion of an updated, adequate environmental review. In practice, rescissions of approvals of this sort would translate into real delays in resource extraction, and hence significant foregone revenue. We label our re-conceptualization NEPA-as-contract because it would transform the NEPA environmental review process into a con-tractual bargain where the industry actor offers a realistic, thorough environmental review—including mitigation planning—as considera-tion for the receipt of the lease or government permission. From a con-tractual perspective, it is only right that industry should lose its benefit from the bargain if it is found out that it provided illusory considera-tion.132 One analogy is a contract for insurance coverage. When an in-dividual applies for insurance, the insurance company requires the dis-closure of certain information.133 If an individual fails to provide the correct information, and the company subsequently learns that is the case, the company can treat the policy as rescinded and then deny any

130 See 40 C.F.R. § 1502.9(c) (2010) (requiring agencies to prepare supplemental EISs, if

“[t]here are significant new circumstances or information relevant to environmental con-cerns and bearing on the proposed action or its impacts”); Council on Envtl. Quality, A Citizen’s Guide to the NEPA: Having Your Voice Heard 20 (2007), available at http://ceq.hss.doe.gov/nepa/Citizens_Guide_Dec07.pdf.

131 See Mobil Oil Exploration & Producing Se. v. United States, 530 U.S. 604, 607 (2000). In Mobil Oil, the Supreme Court embraced a contractual understanding of regula-tion, where one party must meet its obligation or compensate the other if it does not—although, to date, it has done so to the benefit of regulated industries. See id.; United States v. Winstar Corp., 518 U.S. 839, 895 (1996) (holding that bank regulators must compensate the regulated entity when regulators broke their promises regarding regulatory treatment of the bank). See generally David Dana & Susan P. Koniak, Bargaining in the Shadow of Democ-racy, 148 U. Pa. L. Rev. 473 (1999) (assessing the Court’s embrace of a contract model of regulation).

132 See Restatement (Second) of Contracts § 77 (1981). 133 Jeffrey W. Stempel, Stempel on Insurance Contracts § 3.07[E] (3d ed. 2010).


claims under the policy.134 More broadly, contracts of all sorts may be treated as rescinded by one party if it is discovered that the other party to the contract made material misstatements at the time the contract was formed.135 For example, the seller of property implicitly warrants that it has good title and if it is later found that it does not, the buyer can elect to treat the purchase contract as rescinded.136 For this NEPA-as-contract approach to work, there would need to be some protections against overreaching, as well as protections against the agencies simply sitting on their rights to rescind. To those ends, an agency would be required to make formal findings that an environ-mental review by the company was grossly inadequate and/or dishon-est, and those findings would be subject to judicial review. At the same time, citizens potentially affected by the environmental risks that had come to light since the environmental review was performed could sue to challenge the agency’s failure to exercise its rescission rights. We think such suits might be brought even in venues where traditional NEPA suits currently are not pursued, because they almost always would follow an “accident” or public disclosure that draws public attention and provides a strong basis for showing that the environmental review could not have been completed in good faith and with reasonable dili-gence. Note, however, that in the case of an accident such as a spill in-volving a single company in a particular area, our proposed regime could easily result in a re-examination by the agency of all the envi-ronmental reviews by all the companies that operate in that area, as has indeed happened with respect to reviews and disclosures involving all the oil companies operating in the Gulf in the wake of the BP spill.137 Thus, any single company would know that the quality and comprehen-siveness of its environmental review and mitigation planning could be called into question with potentially disastrous financial consequences if any of the operators in the relevant area experienced a major acci-

134 Pinette v. Assurance Co. of Am., 52 F.3d 407, 409 (2d Cir. 1995) (discussing state

law grounds for insurance companies to deny converge); Stempel, supra note 133, § 3.07[E].

135 Restatement (Second) of Contracts § 164. 136 See id. 137 See Reorganization and Regulatory Reform, Bureau Ocean Energy Mgmt., Regula-

tion & Enforcement, http://www.boemre.gov/ReorganizationRegulatoryReform.htm (last visited Apr. 15, 2011) (“In response to the Deepwater Horizon explosion and result-ing oil spill in the Gulf of Mexico, the Obama Administration launched the most aggres-sive and comprehensive reforms to offshore oil and gas regulation and oversight in U.S. history.”).


dent or was otherwise exposed as causing environmental harm or being unprepared to prevent or remediate environmental harm.138 The NEPA-as-contract reform we propose speaks directly to our rational, ruthless calculator account of why BP never prepared for the possibility of a blowout protector failure.139 A rationally calculating BP would consider the expected costs of not acting against risk to be more significant if a strategy of silence and inaction could result in losing very valuable lease rights or exploration and drilling permissions. In-deed, from a rational calculation perspective, under our regime a com-pany like BP would want to invest resources in environmental review and mitigation in proportion to how productive it estimated the field or other resource to be. In other words, the more expected oil, the more environmental review and thorough consideration of mitigation. Because, all else being equal, the productivity of a field will correlate with its potential for causing environmental harm, we think our pro-posal would create exactly the right incentives. Of course, it is true that a company like BP might believe that it could exercise its influence over an agency enough to forestall the agency from making the finding that would lead to rescission of a lease or other permission. But the even a modest possibility that the company could not avoid rescission would change its ex ante calculations about how much to invest in envi-ronmental review and mitigation planning. Indeed, we think that heavy industry influence over agencies is a reality that should make our pro-posal more palatable because it goes a distance toward ensuring that agencies will not fall sway to hindsight bias and seek rescission of leases and other permissions based on the failure of company reviews to con-sider risks and alternatives, which could not reasonably have been an-ticipated before an accident or other occurrence brought new informa-tion to light.140 We think the NEPA-as-contract reform also speaks to the group pathologies account of why BP and others did not plan for a failure of blowout protectors. By making the NEPA process one that has poten-tially very important implications for the company’s valuable legal

138 We think that because of this dynamic, companies actually might come to welcome more stringent industry-wide regulatory requirements and more meaningful government review of company environmental assessments, because tougher government action might be seen as the best way to protect against rescission threats emanating from accidents or bad practices of one’s competitors.

139 See discussion supra Part III. 140 See generally Jeffrey J. Rachlinski, A Positive Psychological Theory of Judging in Hindsight,

65 U. Chi. L. Rev. 571, 576–86 (1998) (explaining and discussing the possible reasons for hindsight bias).


rights in resource extraction, NEPA-as-contract would change corpora-tions’ internal dynamic surrounding environmental review. Environ-mental review could no longer be seen as simply an obstacle, chore, or tedium to get through; it would have to be seen as something that the company had a financial stake in getting right, even if the company knew that the agency would accept whatever it submitted. Top man-agement, in-house counsel, and very likely outside counsel would take a closer look at reviews than they currently do, and would want to assure themselves that they “covered the bases” by calling on company staff to identify any arguable holes or weaknesses that could later, perhaps years later, be used to challenge the company’s legal rights in resource extraction. In this way, the NEPA-as-contract model would counteract the pro-drilling leadership bias that likely contributed to the groupthink dy-namic.141 Company leaders would now have a strong incentive to change the culture in which the engineers always dominate the biolo-gists and cautions about drilling are routinely dismissed.142 Much like construction companies have used a safety first culture to reduce job-site accidents, oil companies would have a powerful incentive to im-plement a culture that takes a hard look at potential environmental harms.143 Indeed, if this cultural shift were strong enough, group po-larization effects might shift to emphasize safety and harm-mitigation much more strongly than simple regulation would predict. Similarly, group confirmation bias may shift from emphasizing that “everyone knows drilling is safe” to “everyone knows you’ve got to fully assess the risks.” As the literature on so-called “norm cascades” has made clear, once a given norm becomes adopted by a sufficient number of actors, it may reach a tipping point, after which it becomes rapidly diffused.144 Government agencies, with their strong symbiotic relationship with in-dustry, would likely not be immune from these new norms, but even if they somehow managed to be, industry caution alone would likely be sufficient to improve the level of environmental review.

141 See supra notes 70–74 and accompanying text. 142 See Eilperin, supra note 35. 143 See Change in Safety Culture at Pepper Construction Group Leads to Dramatic Decline in Inju-

ries and Illnesses, Occupational Safety & Health Admin., http://www.osha.gov/dcsp/ success_stories/compliance_assistance/ss_peppercon.html (last visited Apr. 15, 2011).

144 See, e.g., Martha Finnemore & Kathryn Sikkink, International Norm Dynamics and Po-litical Change, 52 Int’l Org. 887, 892–93 (1998) (explaining how group agreement on a norm may become widespread).


Even if groupthink continued to dominate the company, and such groupthink dismissed a spill or other disaster as essentially unthinkable, the NEPA-as-contract reform would give permission, or if you will, cover, to potentially dissenting voices within companies. Indeed, such dissenting voices could acknowledge that the groupthink was the “right think” and still argue that protection had to be taken because of other companies’ possible “human” errors. Specifically, dissenting voices could point to the legal and financial risk from another company’s er-ror, and from the relevant agency overreaching by punishing not just that company but all the companies with rescission based on a claim that past environmental reviews were grossly inadequate or dishonest. In this way, even if NEPA-as-contract did not overcome groupthink di-rectly, it would sharply mitigate its impact on decision-making. Finally, one of the advantages of this approach is that it would be easy to implement. No new agencies would be needed. No new compli-cated regulations would be necessary. The rescission clause could simply be inserted into leases, permits, and permissions.145 If a federal statute were required to enable agencies to do just that, or to authorize citizen suits for agencies’ failures to rescind, the bill could be very brief. That Congress would seem very unlikely to pass such a bill, we readily admit. But a proposal can have substantive merit as a policy solution even if the road from its articulation to its political adoption is hard to envision. We note that the linkage we advocate—between opportunities to lease, explore, and drill, and environmental disclosure and planning— could be achieved by means other than rescissions. For example, com-panies that were found to have performed dishonest or grossly inade-quate environmental reviews with respect to existing leases could be barred from obtaining new leases for a period of time. Or perhaps they could not be barred but would be subject to a harsher royalty sched-ule.146 But we think that there is a legal coherence and even elegance in treating companies engaged in NEPA and other reviews the same as other breaching parties when they are found to have not performed their end of the deal—namely, rescinding their contracts and their rights under the contracts.147 The United States government is held to

145 See 43 U.S.C. § 1337(o) (2006). Indeed, the Energy Policy Act of 2005, which gov-

erns leasing in the Gulf, suggests a contract rescission approach. See id. (explaining that “[t]he Secretary may cancel any lease obtained by fraud or misrepresentation”).

146 See Jody Freeman, The Good Driller Award, N.Y. Times, July 1, 2010, at A31 (suggest-ing that companies could receive preferred royalty rates for good environmental perform-ance as “carrots”).

147 See Restatement (Second) of Contracts § 235 (1981).


forward.

commitments made to private actors as part of the regulatory process under the general reasoning of contract law.148 There is good reason that, likewise, companies should be asked to meet the commitments and back the representations they make as part of the regulatory proc-ess, and then to be subject to the contract remedy of rescission if they fail to do so.

Conclusion

There are two plausible accounts for the failure of environmental reviews to contemplate, let alone plan for, the sort of disaster that struck the Gulf of Mexico on April 20, 2010. The first is that agency and industry personnel, subject to a groupthink assumption concerning risk, honestly believed that such a spill was highly unlikely and that ex-isting technology was more than adequate to deal with it.149 The second is that industry, pursuant to a rational calculation, assumed that it could externalize much of the cost of any such spill, and prevented MMS from contemplating or planning for it through various mechanisms of agency capture.150 In either case, what was missing was a powerful in-centive to conduct good environmental reviews.151 We believe that ex-isting calls to reform NEPA are insufficient to provide such an incen-tive, and thus call for re-conceptualizing the law along the lines of an insurance model. Under such a model, industry would be subject to losing the benefit of its bargain if environmental reviews are found to be inadequate. Importantly, implementing such a reform would not require congressional action but could simply be written into leasing and other contracts going

148 See United States v. Winstar Corp., 518 U.S. 839, 895 (1996) (broadly holding that

regulators can bind the United States contractually to promises they make with regulated entities). For a critique of Winstar as applying a private contract model to public govern-ance to an extensive degree, see David Dana & Susan P. Koniak, supra note 131, at 555.

149 See supra notes 80–86 and accompanying text. 150 See supra Part III. 151 See supra notes 113–120 and accompanying text.

INSERTED BLANK PAGE

THROUGH ANOTHER’S EYES: GETTING THE BENEFIT OF OUTSIDE PERSPECTIVES

IN ENVIRONMENTAL REVIEW

Holly Doremus*

Abstract: The Deepwater Horizon blowout has important lessons to teach about environmental review. It is easy to scapegoat the former Minerals Management Service (MMS) for shoddy environmental analysis. But cap-tive agencies are a common phenomenon. Oversight by environmental mission agencies is supposed to provide a check on their myopia. Several external reviews of MMS’s environmental analysis were conducted, but none uncovered MMS’s wildly incorrect estimates of the probability, magnitude, and consequences of a blowout. This article details the exter-nal reviews, explains why they proved ineffective, and offers suggestions for improvement. Outside review cannot be effective unless reviewers un-derstand the importance of their task, are able to focus on the key aspects of analyses they are reviewing, and can bring the appropriate expertise to bear. All of these elements were missing in reviews of the analysis that preceded drilling in the Macondo prospect. Their availability for future reviews would be improved if the executive branch took some relatively easy unilateral steps.

Introduction

On the night of April 20, 2010, a series of explosions ripped through the Deepwater Horizon, a mobile oil drilling rig operating fifty miles off the coast of Louisiana on a site leased by BP from the federal government, known as the Macondo prospect.1 Eleven people died in the explosions and ensuing fire.2 The rig sank, shearing off the pipe which connected the well to the platform. A device called a blowout

* © 2011, Holly Doremus, Professor of Law, University of California, Berkeley. Thanks

to Gregg Macey and David Uhlmann for comments on an earlier draft, and especially to Rena Steinzor for providing not only good advice, but a home away from home.

1 See Peter Lehner with Bob Deans, In Deep Water: The Anatomy of a Disaster, the Fate of the Gulf, and Ending Our Oil Addiction, at viii (2010); Rick Jervis, Re-search Teams Find Oil on Bottom of Gulf, USA Today, Oct. 25, 2010, at 3A (noting that the well was fifty miles off the coast).

2 See Lehner with Deans, supra note 1, at 43 (providing a vivid account of the explo-sion and the chaotic evacuation of the rig).

247


preventer, intended “to crush, shear and seal the pipe”3 in a disaster, had been installed at the sea floor against just such an emergency.4 But it failed to operate, leaving the uncontrolled well gushing oil and natu-ral gas into the Gulf of Mexico.5 By the time the well was finally sealed,6 nearly five million barrels (more than 200 million gallons) of oil had spewed out of the Macondo well.7 The environmental and economic costs of the disaster may not be fully understood for many years. This Article focuses on what the Gulf disaster can teach us about our environmental planning framework. A suite of federal laws, includ-ing the National Environmental Policy Act (NEPA),8 Endangered Spe-cies Act (ESA),9 and Coastal Zone Management Act (CZMA),10 are sup-posed to ensure that we understand the potential environmental trade-offs of our offshore energy development decisions before committing to them, and that those trade-offs stay within acceptable levels.11 Yet the Deepwater Horizon disaster and its consequences were wholly unfore-seen by key decision makers, raising significant questions about the ability of those laws to fulfill their intended purposes.12 Unfortunately, so far the Department of Interior shows little inter-est in learning any lessons about environmental review. In issuing and then lifting a short-term moratorium on new drilling in the Gulf, Inte-rior Secretary Ken Salazar focused almost entirely on improving regula-tion of operations once drilling has been approved.13 Secretary Salazar

3 See id. 4 See id. 5 See id. at 2, 20. 6 Flow from the well was halted on July 15. Timothy J. Crone & Maya Tolstoy, Magnitude of

the 2010 Gulf of Mexico Oil Leak, Science, Oct. 29, 2010, at 364. However, the well was not permanently sealed until two months later. See Harry R. Weber, Gulf Oil Well Is Dead but the Pain Will Remain, ABC News, Sept. 20, 2010, http://abcnews.go.com/Business/wireStory ?id=11678895.

7 See Crone & Tolstoy, supra note 6, at 364; Weber, supra note 6. Estimates of the size of the spill vary. One independent calculation put the total flow at 4.4 million barrels plus or minus twenty percent. Weber, supra note 6.

8 National Environmental Policy Act, 42 U.S.C. §§ 4321–4370h (2006). 9 Endangered Species Act, 16 U.S.C. §§ 1531–1544 (2006). 10 Coastal Zone Management Act, 16 U.S.C. §§ 1451–1466 (2006). 11 See 16 U.S.C. §§ 1452, 1531; 42 U.S.C. § 4321. 12 See Minerals Mgmt. Serv., U.S. Dep’t of the Interior, MMS 2007-003, Outer

Continental Shelf Oil & Gas Leasing Program: 2007–2012, Final Environmental Impact Statement, at IV-1, IV-29 (2007) [hereinafter 2007–2012 FEIS], available at http://www.boemre.gov/5-year/2007-2012FEIS.htm (exhibiting the lack of foresight of a potential blowout scenario).

13 See generally Decision Memorandum from Kenneth L. Salazar, Sec’y of the Interior, Ter-mination of the Suspension of Certain Offshore Permitting & Drilling Activities on the Outer Cont’l Shelf, to Dir. of Ocean Energy Mgmt., Regulation & Enforcement (Oct. 12, 2010),

2011] Outside Perspectives in Environmental Review 249

did restructure the Minerals Management Service (MMS), creating a new Bureau of Ocean Energy Management, Regulation and Enforce-ment (BOEMRE) to house leasing and operations management, and moving revenue collection to the Secretary’s office,14 but that restruc-turing does nothing to improve environmental review.15 Outside observers have paid more attention to the environmental review preceding approval of drilling operations, but they have concen-trated almost entirely on the shortcomings of MMS’s environmental analysis.16 I have no wish to defend MMS, or to minimize the impor-tance of persuading it to take environmental review more seriously. MMS had been a notoriously bad bureaucratic actor for some time,17

available at http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile& PageID=64767. Salazar imposed a moratorium on new deepwater drilling in May, which was lifted in October after Interior issued a new safety rule for offshore operations. See id.

14 U.S. Sec’y of the Interior, Order No. 3299, Establishment of the Bureau of Ocean En-ergy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue (May 19, 2010), available at http://www.doi.gov/deepwaterhorizon/loader.cfm?csModule=security/getfile&PageID=32475. For the sake of simplicity and because the events considered here occurred before the reorganization, this Article uses the old name, MMS, throughout.

15 See id; Dep’t of Interior, Implementation Report, Reorganization of the Miner-als Management Service 2 (2010) (indicating that the Order merely reassigns the MMS’s duties).

16 Kristina Alexander, Cong. Research Serv., R41265, The 2010 Oil Spill: The Minerals Management Service (MMS) and the National Environmental Policy Act (NEPA) 1 (2010); Council on Envtl. Quality (CEQ), Exec. Office of the Presi-dent, Report Regarding the Minerals Management Service’s National Environ-mental Policy Act Policies, Practices, and Procedures as They Relate to Outer Continental Shelf Oil and Gas Exploration and Development 1–3 (2010) [hereinaf-ter CEQ Report]; Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Off-shore Drilling, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling 81–83 (2011) [hereinafter BP Commission Report]; Oliver A. Houck, Worst Case and the Deepwater Horizon Blowout: There Ought to Be a Law, 40 Envtl. L. Rep. (Envtl. L. Inst.) 11,033, 11,033 (2010); The National Environmental Policy Act and Outer Continental Shelf Oil and Gas Activities 1, 29–34 (Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Off-shore Drilling, Staff Working Paper No. 12, 2011), available at http://www.oilspillcommission.gov/resources#staff-working-papers.

17 See generally U.S. Gov’t Accountability Office, GAO-10-276, Offshore Oil and Gas Development: Additional Guidance Would Help Strengthen the Minerals Management Service’s Assessment of Environmental Impacts in the North Aleu-tian Basin (2010) (noting that MMS lacks a handbook “providing guidance on how to implement NEPA,” and has unclear policies on what constitutes a significant environ-mental impact). Beyond the scandals over sex and drugs with industry officials that gar-nered national attention, MMS’s implementation of NEPA for oil and gas development off Alaska had been harshly criticized by the Government Accountability Office in a report issued shortly before the Deepwater Horizon blowout. See id; Derek Kravitz & Mary Pat Flaherty, Report Says Oil Agency Ran Amok, Wash. Post, Sept. 11, 2008, at A1 (noting that


and reforming it is certainly vital to restoring public confidence in off-shore drilling oversight. But focusing on MMS alone risks missing the bigger picture. There will always be agencies that are too close to the industries they regulate or take too narrow a view of the public interest. The environmental review process is supposed to combat those ten-dencies by engaging outside agencies with environmental protection missions in an oversight role. Several entities reviewed MMS’s environ-mental analysis, but none raised the alarm about the possibility of an uncontrolled blowout.18 The Gulf disaster underscores both the impor-tance of bringing outside perspectives to bear in environmental review and the difficulty of doing so effectively. Those lessons will be impor-tant as offshore oil exploration resumes, and especially if it expands.19 But they will be equally important in other contexts where environ-mental review is conducted by agencies subject to the risk of capture. In this Article, I detail the many opportunities for outside review of MMS’s environmental analyses in the Gulf, examine why that review did not serve its intended purpose, and offer suggestions for improvement. I begin with a quick explanation of the importance of outside perspec-tives, and the ways that environmental laws build opportunities for en-vironmental agency oversight into the permit approval process.20 I then examine how those reviews played out in the context of the Macondo well, showing that they did little to check or improve MMS’s shoddy work.21 Finally, I consider why reality did not meet expectations, and what changes would improve the effectiveness of mandated outside re-views.22 This analysis reveals flaws that could quickly be fixed by unilateral executive action. The Council on Environmental Quality should revive

the Inspector General found that MMS employees had socialized with oil company em-ployees at “alcohol-, cocaine- and marijuana-filled parties”).

18 See infra Part II. 19 See John M. Broder, Obama to Open Offshore Areas to Oil Drilling, N.Y. Times, Mar. 31,

2010, at A1 (noting proposed expansion). The President had proposed expansion shortly before the Deepwater Horizon disaster. Id. In December 2010, that plan was officially pro-nounced dead. John M. Broder & Clifford Krauss, U.S. Drops Bid to Explore Oil in Eastern Gulf, N.Y. Times, Dec. 2, 2010, at A1. Nonetheless, so long as gasoline prices remain high there will be pressure to expand offshore oil development. See Carl Hulse, Week Ahead: Debt Ceiling and Gas Prices Still Focus of Congress, N.Y. Times (May 2, 2011, 2:25 PM), http://the caucus.blogs.nytimes.com/2011/05/02/week-ahead-debt-ceiling-and-gas-prices-still-focus-of-congress/# (noting that House Republicans are pushing for legislation to expand off-shore drilling and expedite the permitting process).

20 See infra Part I. 21 See infra Part II. 22 See infra Part III.


a robust requirement that NEPA analysis include a frank worst-case analysis.23 While it might not improve internal decision-making, that analysis should help draw the attention of outside reviewers to the need to take a careful look at risk assessment and impact evaluation.24 Out-side reviewers could also take steps to improve the effectiveness of their work. With the help of the Council on Environmental Quality, they should demand that environmental documents focus more clearly on risks and associated potential impacts. They also need to expand their expertise to include familiarity with the technological context of activi-ties that present serious environmental threats. In the long term, the only way to ensure that environmental review makes a difference to decisions about offshore drilling is to add explicit substantive environmental protection requirements to the governing statutes. That sort of legislative change will not happen soon, but more robust outside reviews could help push the political landscape in that direction.

I. Outside Looking In

A. The Importance of an Outside Perspective

Calls for unified environmental regulation and oversight are com-mon today, for good reason. Fragmentation of authority and responsi-bility may mean that no one ever takes a comprehensive view of the sys-tem, or that agencies work at cross-purposes. It can bring unnecessary duplication,25 with attendant inefficiencies. More subtly, where multiple agencies share authority over the multiple causes of an environmental problem, each may be tempted to avoid taking politically difficult steps to address it.26 The Deepwater Horizon saga, however, reminds us that concentra-tion of responsibility also has its downsides. As Professors DeShazo and

23 See infra Part III.B. Oliver Houck has already made a forceful argument for reinvigo-

rating worst-case analysis. See generally Houck, supra note 16. This Article expands on Pro-fessor Houck’s argument by more deeply exploring how worst-case analysis would improve outside agency review.

24 See infra Part III.B. 25 William W. Buzbee, Recognizing the Regulatory Commons: A Theory of Regulatory Gaps,

89 Iowa L. Rev. 1, 5–6 (2003). 26 See id. at 5–6, 27–31; Holly Doremus, Crossing Boundaries: Commentary on “The Law at

the Water’s Edge,” in Wet Growth: Should Water Law Control Land Use? 271, 295, 300 (Craig Anthony (Tony) Arnold, ed., 2005).


Freeman put it, “interagency conflict can be productive.”27 Institutional separation and redundancy can encourage diversity of ideas and ap-proaches, combating the tendency to fall into patterns of “group think,” where assumptions go unexamined and viewpoints tend to converge on an unrealistic extreme.28 Decentralizing authority also reduces the risk and consequences of agency “capture,”29 meaning domination by inter-est groups whose goals diverge from those of the larger political com-munity.30 At the most basic level, it is more difficult and costly to influ-ence several agencies.31 In addition, fragmentation creates a role for multiple agency cultures and missions, which in turn should help check the tendency of development and extraction agencies to see only that mission.32 Just as regulatory review provides a needed check on self-interested and short-sighted firms,33 outside review of the regulator can provide a check on capture, group-think, and other shortcomings that interfere with regulators’ pursuit of the public interest.34 The late, unlamented MMS was a poster child for the importance of that sort of outside check.35

27 J.R. DeShazo & Jody Freeman, Public Agencies as Lobbyists, 105 Colum. L. Rev. 2217, 2233 (2005).

28 Anne Joseph O’Connell, The Architecture of Smart Intelligence: Structuring and Oversee-ing Agencies in the Post-9/11 World, 94 Calif. L. Rev. 1655, 1676 (2006).

29 Id. at 1677. 30 See Debra L. Donahue, Western Grazing: The Capture of Grass, Ground, and Government,

35 Envtl. L. 721, 746–47 (2005) (defining “capture”). 31 See O’Connell, supra note 28, at 1677. 32 It is widely agreed, for example, that the multiple-use land management agencies

have maximized output of certain resources, notably timber and forage, at the expense of others, such as wildlife and environmental preservation. See, e.g., Eric Biber, Too Many Things to Do: How to Deal with the Dysfunctions of Multiple-Goal Agencies, 33 Harv. Envtl. L. Rev. 1, 1–4 (2009); Michael C. Blumm, Public Choice Theory and the Public Lands: Why “Mul-tiple Use” Failed, 18 Harv. Envtl. L. Rev. 405, 406–07 (1994); Josh Eagle, Regional Ocean Governance: The Perils of Multiple-Use Management and the Promise of Agency Diversity, 16 Duke Envtl. L. & Pol’y F. 143, 147–48 (2006).

33 The Deepwater Horizon disaster provides a powerful reminder that self-interest is an insufficient motivator for environmental protection. The blowout has cost BP more than $11 billion by late November 2010, not including lost profits from the well, and the bill is expected to get much higher by the time response costs and damage claims are re-solved. Steven Mufson, BP to Sell $7 Billion in Argentina Assets, Wash. Post, Nov. 29, 2010 at A3. BP has sold assets in order to cover the costs. See id.

34 See infra Part III. 35 See Memorandum from Earl E. Devaney, Interior Inspector Gen., to Interior Sec’y

Kempthorne (Sept. 9, 2008), available at http://www.doioig.gov/images/stories/reports/ pdf//RIKinvestigation.pdf. In 2008, after a two-year investigation, the Department of Inte-rior Inspector General reported a “[c]ulture of [e]thical [f]ailure” at MMS’s royalty-in-kind office, including “prodigious” acceptance of gifts from industry as well as sexual rela-


Ideally, review by someone other than the regulator of the envi-ronmental impacts of proposed actions should provide three benefits. First, it should help counter “mission agency syndrome,” the tendency of agencies dedicated to a primary mission to ignore or underplay any-thing that might conflict with that mission.36 Giving agencies with a strongly internalized environmental mission a role in the environmental analysis should help keep that analysis honest. Second, effective over-sight should reduce the impact of routinization. Even with the best of intentions, anyone who does the same tasks over and over will tend to do them the same way, and to default to familiar routines. Regulatory agencies repeatedly required to create environmental documentation for similar activities can easily fall into “rubber stamp syndrome,” recy-cling the same analysis over and over again as boiler plate without seri-ous consideration.37 Outside reviewers may also fall into such routines, but because they are likely to see documentation for a greater variety of situations they should be less prone to temptations to recycle. Third, and related to the boiler plate issue, outside review should help ensure that environmental analysis keeps abreast of technological changes, countering “past performance syndrome,” the tendency to assume that because there has not been a problem in the past one will not occur in the future. It will only do so, of course, if the reviewers understand the changing technological landscape.

B. Building in Outside Review Opportunities

Modern environmental law seeks, among other things, to broaden the thinking of federal agencies that decide whether to approve, fund, or engage in environmentally damaging activities.38 Congress has tried

tionships and alcohol abuse with industry contacts. Id. at 1–2; see also Kravitz & Flaherty, supra note 17. Former MMS officials openly acknowledge that their mission, especially in the Gulf of Mexico, was to expedite drilling. Jason DeParle, Leading the Way Into Deep Water, N.Y. Times, Aug. 8, 2010, at A1.

36 See Daniel R. Mandelker, Thoughts on NEPA at 40, 39 Envtl. L. Rep. (Envtl. Law Inst.) 10,640, 10,640 (2009) (noting the “sometimes myopic vision of federal mission agencies”).

37 As an early critique of environmental impact analysis noted: “Informal as well as formal ‘standard operating procedures’ . . . direct scientific attention to well-marked intel-lectual grooves.” Eugene Bardach & Lucian Pugliaresi, The Environmental-Impact Statement vs. the Real World, Pub. Interest, Fall 1977, at 22, 28. This kind of routinization in part responds to organizational expectations like those that produce “scripted” behaviors. See Gregg P. Macey, Coasean Blind Spots: Charting the Incomplete Institutionalism, 98 Geo. L.J. 863, 885–86 (2010) (explaining the concept of scripts as recurrent patterns of interaction shaped by institutional contexts).

38 See, e.g., 42 U.S.C. § 4332 (2006); Major Federal Action, 40 C.F.R. § 1508.18 (2010).


to combat mission agency syndrome both by modifying internal agency processes and by bringing outside pressures to bear.39

1. NEPA and the Power to Persuade

NEPA, the first of the modern generation of environmental stat-utes, includes provisions designed to work internally and externally. 40

NEPA forces agencies to confront the environmental consequences of their proposed actions by mandating that they prepare “detailed state-ments,” known as Environmental Impact Statements (EISs), on envi-ronmental impacts and alternatives before taking actions that signifi-cantly affect environmental quality.41 Because NEPA requires that each agency undertake its own environmental analyses, rather than centraliz-ing that task in an environmental specialty agency,42 it has the effect of diversifying agency staff.43 By restructuring agency bureaucracies, NEPA has succeeded in at least providing a voice for environmental concerns in every federal agency.44 In some contexts, NEPA’s inward-focused provisions rapidly drove agency change.45 Other agencies, however, proved more resistant to internal pressures.46

Under NEPA, comments from outside federal agencies provide the key external role. Judicial review is sharply limited; according to the Supreme Court, NEPA does not permit courts to second-guess the envi-ronmental trade-offs agencies choose to make.47 In theory, public over-sight could provide the needed check, but costs and lack of expertise are substantial barriers to effective public review. As Professor Andreen

39 See, e.g., 42 U.S.C. § 4332. 40 See id. §§ 4321–4370h. 41 See id. § 4332(2)(C). 42 See id. 43 See Paul J. Culhane, NEPA’s Effect on Agency Decision Making: NEPA’s Impacts on Federal

Agencies, Anticipated and Unanticipated, 20 Envtl. L. 681, 690–91 (1990); see also Allan F. Wichelman, Administrative Agency Implementation of the National Environmental Policy Act of 1969: A Conceptual Framework for Explaining Differential Response, 16 Nat. Resources J. 263, 298, 299 (1976) (noting that NEPA’s special requirements would lead to hiring more staff members, and that staff would be “exposed to new informational inputs through . . . the introduction of new personnel into the agency”).

44 See generally Serge Taylor, Making Bureaucracies Think (1984); Wichelman, su-pra note 43, at 263.

45 See, e.g., Sally K. Fairfax & Barbara T. Andrews, Debate Within and Debate Without: NE-PA and the Redefinition of the “Prudent Man” Rule, 19 Nat. Resources J. 505, 506–07 (1979); H. Paul Friesema & Paul J. Culhane, Social Impacts, Politics, and the Environmental Impact Statement Process, 16 Nat. Resources J. 339, 349–51 (1976).

46 See DeShazo & Freeman, supra note 27, at 2220 & n.8 (discussing the historic reluc-tance of mission agencies to expand their thinking to include environmental concerns).

47 Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350–51 (1989).


observed twenty years ago, only the executive branch can effectively oversee the substantive implementation of NEPA.48 Congress has tried to promote executive branch oversight, provid-ing for it in three ways.49 First, it created the Council on Environmental Quality (CEQ) in the Executive Office of the President as a counter-weight to “the more parochial views of the established agencies.”50 CEQ has fulfilled that role primarily by developing guidance and regulations governing the preparation and content of NEPA documents.51 Second, it required that action agencies seek comments on their EISs from other federal agencies with “jurisdiction by law or special expertise with respect to any environmental impact involved.”52 CEQ regulations im-pose a mandatory duty for those agencies to comment,53 and allow them to refer disputes with the action agency to CEQ.54 Not satisfied with these checks alone, in section 309 of the 1970 Clean Air Act, Congress required that the Environmental Protection Agency (EPA) review and comment in writing on the environmental trade-offs of proposed federal actions.55 If EPA finds the environmental impacts of a proposed action unacceptable, it must refer the action to CEQ.56 This provision “was designed to create an advocate within the executive branch that would blow the whistle on harmful environ-mental actions and press the case against such actions all the way to the Executive Office of the President.”57

48 William L. Andreen, In Pursuit of NEPA’s Promise: The Role of Executive Oversight in the

Implementation of Environmental Policy, 64 Ind. L. J. 205, 209 (1989). 49 See id. at 212–23 (offering a thorough description of NEPA’s legislative history and

contemporary commentary). 50 Id. at 216–17. 51 See 40 C.F.R. pt. 1500–1508 (2010). 52 42 U.S.C. § 4332(2)(C) (2006). 53 40 C.F.R. § 1503.2. 54 Id. § 1504.3. 55 See 42 U.S.C. § 7609(a) (2006). The Senate committee crafting the Clean Air Act fo-

cused on lack of environmental expertise in mission-oriented agencies rather than con-flicts of interest or agency capture. See Andreen, supra note 48, at 225. In the committee’s view, NEPA did not provide an adequate remedy because it did not assure that “‘environ-mental agencies [would] effectively participate in the decision-making process.’” Id. (quot-ing S. Rep. No. 91-1196, at 44 (1970), reprinted in 1 Legislative History of the Clean Air Amendments of 1970, at 443 (1974)). Indeed, the committee found that agencies sometimes provided only verbal comments on EISs within their expertise. See, e.g., id. at 228 (noting an instance when a Senator’s request for comments made on a draft EIS was denied because they had only been made orally).

56 42 U.S.C. § 7609(b). 57 Andreen, supra note 48, at 229.


Very few interagency disputes have been formally referred to CEQ.58 But the prospect of referral “has encouraged moderation and compromise” by action agencies in response to comments.59 Agency comments are also influential with reviewing courts.60

2. Environmental Veto Power

The NEPA process invites agencies with an environmental mission to comment on proposals, and provides an opportunity to elevate dis-putes about environmental impacts to the White House. Absent presi-dential intervention, though, it leaves the action agency in control of the ultimate decision, with little oversight from the courts.61 Review provisions in the Endangered Species Act (ESA)62 and Coastal Zone Management Act (CZMA)63 are stronger. They effectively provide veto power,64 subject to override measures that are difficult to invoke.65 The ESA has been called the “pit bull of environmental laws”66 be-cause its substantive requirements are, at least on paper, so unyield-ing.67 Section 7 of the ESA requires that federal agencies “insure” that actions they take, authorize, or fund are not likely to jeopardize the continued existence of any listed species or adversely modify desig-nated critical habitat.68 That duty is fulfilled through consultation with the Fish and Wildlife Service (FWS) for terrestrial species, or the Na-

58 See Dep’t of Energy, Referral of Inter-Agency Disagreements to CEQ Under

the National Environmental Policy Act 2–4 (2009), available at http://ceq.hss.doe. gov/nepa/eis/referrals_to_CEQ_Mar09.pdf (documenting that as of March 2009 there have been only twenty-seven formal referrals to CEQ, with the most recent occuring in 2001).

59 Andreen, supra note 48, at 240. 60 See Michael C. Blumm & Stephen R. Brown, Pluralism and the Environment: The Role of

Comment Agencies in NEPA Litigation, 14 Harv. Envtl. L. Rev. 277, 281–82 (1990). Envi-ronmental plaintiffs fare better in NEPA litigation when agency comments support their position. See id.

61 See Andreen, supra note 48, at 211. 62 See 16 U.S.C. §§ 1531–1544 (2006). 63 See 16 U.S.C. §§ 1451–1466 (2006). 64 See 16 U.S.C. §§ 1456, 1536. 65 See 16 U.S.C. § 1456 (noting that actions will not be completed until state agencies

concur and that exemptions from compliance are granted only if “the activity is in the paramount interest of the United States”); 16 U.S.C. § 1536(g)–(h) (describing the ex-emption process).

66 Oliver A. Houck, The Endangered Species Act and Its Implementation by the U.S. Depart-ments of Interior and Commerce, 64 U. Colo. L. Rev. 277, 279 (1993).

67 See, e.g., George Cameron Coggins, An Ivory Tower Perspective on Endangered Species Law, 8 Nat. Resources & Env’t 3, 3 (1993).

68 See 16 U.S.C. § 1536(a)(2).


tional Marine Fisheries Service (NMFS) for marine species.69 The end result of consultation is a biological opinion developed by the wildlife agency, determining whether the proposed action would exceed the acceptable statutory threshold.70 Although an adverse biological opin-ion does not technically preclude the action, the Supreme Court has recognized that it is highly coercive.71 An agency that ignores such an opinion is likely to face litigation in which the biological opinion itself will be strong evidence that the action violates the ESA.72 Like NEPA comments, section 7 consultations rarely halt projects, but frequently produce modifications. Action agencies may tweak their proposals, changing the location, scope, or timing, in order to avoid formal consultation73 or a jeopardy finding.74 Furthermore, when it issues a jeopardy opinion, the wildlife agency must if possible offer “reasonable and prudent alternatives,” steps the action agency can take to avoid jeopardy.75 While the ESA is designed to give the wildlife agen-cies veto power over federal actions that would likely cause extinction, it carefully circumscribes that power to prevent its overuse.76

69 Fish & Wildlife Serv. (FWS) & Nat’l Marine Fisheries Serv. (NMFS), Consulta-

tion Handbook, Procedures for Conducting Consultation and Conference Activi-ties Under Section 7 of the Endangered Species Act, at xx (1998) [hereinafter FWS Consultation Handbook].

70 See id. at 4–15; see also 16 U.S.C. § 1536(3)(a); 50 C.F.R. § 402.14 (2010). 71 See Bennett v. Spear, 520 U.S. 154, 169 (1997). 72 See id. 73See FWS Consultation Handbook, supra note 69, at 3–6; see also FWS, Consulta-

tions with Federal Agencies: Section 7 of the Endangered Species Act 2 (2010) [hereinafter FWS Agency Consultations], available at http://www.fws.gov/endangered/ esa-library/pdf/consultations.pdf (“A large percentage of projects, as initially planned, would have had adverse impacts to listed species, but were dealt with through informal consultation. In these situations, the Federal agency made changes to the project design so that adverse impacts to listed species were avoided.”); Houck, supra note 66, at 318 (“[A]lmost ninety percent of all consultations under the ESA are disposed of informally and without fanfare . . . .”).

74 See U.S. Gov’t Accountability Office, GAO-04-93, Endangered Species: More Federal Management Attention is Needed to Improve the Consultation Process 7 (2004) (“[I]n fiscal year 2003, for example, the Services issued only one biological opinion that identified proposed activities as potentially jeopardizing threatened and endangered species [in the northwest].”); Houck, supra note 66, at 318 (“[O]ver ninety percent of the consultations concerning activities sufficiently serious to be conducted formally resulted in findings of ‘no jeopardy’ . . . .”).

75 16 U.S.C. § 1536(b)(3)(A); 50 C.F.R. § 402.02. 76 See 16 U.S.C. § 1536.


The CZMA empowers state, rather than federal, environmental agencies.77 It encourages coastal states to develop coastal zone man-agement plans, primarily through a process called consistency review, which allows states with approved plans to force the federal govern-ment to comply with those plans.78 Since 1990, consistency review has applied to all activities, wherever they occur, which affect coastal zone resources.79 Offshore lease sales, offshore oil development approvals, and even the extension of lease terms in federal waters are therefore subject to CZMA review.80 Consistency review varies slightly depending upon whether the activity is carried out by a federal agency or by a private party with fed-eral approval.81 Federal activities affecting the coastal zone must be consistent to the maximum extent practicable with the enforceable policies of the state plan.82 The federal action agency must provide the state with a consistency determination before beginning the project.83 If the state objects, the federal action may not proceed unless the fed-eral agency either responds to the state’s objections, or determines that full consistency is precluded by other legal requirements.84 Alterna-tively, the President can exempt any activity which is “in the paramount interest of the United States.”85 Applicants for a federal license or permit for activities affecting the coastal zone must certify that the proposed activity complies with the plan’s enforceable policies.86 If the state disagrees, federal approval may not be granted, unless the Secretary of Commerce finds that the activity is consistent with the CZMA or “necessary in the interest of na-tional security.”87

77 See 16 U.S.C. § 1456 (2006) (“No license or permit shall be granted by the Federal

agency until the state or its designated agency has concurred with the applicant’s certifica-tion or until, by the state’s failure to act, the concurrence is conclusively presumed . . . .”).

78 See 16 U.S.C. §§ 1452, 1456. 79 Id. § 1456(c)(3)(A). 80 See California v. Norton, 311 F.3d 1162, 1165, 1173 (9th Cir. 2002). 81 See 16 U.S.C. § 1456(c). 82 Id. § 1456(c). 83 15 C.F.R. § 930.36(b) (2010). 84 Id. § 930.43. 85 16 U.S.C. § 1456(c)(1)(B). 86 Id. § 1456(c)(3)(A). 87 Id.


State consistency objections are rare; “[s]tates have concurred with approximately 95 percent” of consistency determinations.88 While rare, state vetoes are usually effective.89 State objections have been success-fully overridden only fourteen times.90 Several of those overrides, how-ever, came in the context of oil and gas development.91 The oil and gas industry has succeeded in half of the cases in which it has appealed state vetoes to the Secretary of Commerce.92

II. Environmental Agency Review of Offshore Oil Development

The Gulf experience highlights the difficulties of making outside review effective. The environmental review process has been deliber-ately designed to bring in a series of key outside voices.93 Even if MMS was completely captured by the oil industry, those other reviews should not have been infected by that relationship. Yet they failed to assure a clear-eyed view of the environmental risks of oil development in the Gulf. This Part dissects the outside reviews that occurred in the course of approval of the Macondo well as a prelude to analyzing the short-comings of that process.

A. The Legal Context of Offshore Drilling Approval

Offshore oil development is subject to state or federal jurisdiction, depending upon its location.94 The states own the submerged lands directly adjacent to their coasts.95 The United States owns and controls development of the lands further off the coast, to the outer boundary

88 Nat’l Oceanic & Atmospheric Admin., Appeals to the Secretary of Commerce

Under the Coastal Zone Management Act (CZMA) 1 (2009), available at http://coastal management.noaa.gov/consistency/media/appealsdecisionlist011509.pdf.

89 See id. (noting that there have been fourteen decisions to override state objections, and twenty-nine decisions not to override state objections).

90 Id. 91 See Carolyn R. Langford et al., The Mouse That Roared: Can Louisiana’s Coastal Zone

Management Consistency Authority Play a Role in Coastal Restoration and Protection?, 20 Tul. Envtl. L.J. 97, 129 (2006).

92 Id. 93 See, e.g., 42 U.S.C. § 4332(C) (2006) (making EISs available to the President, CEQ,

and the public). 94 See Rachael E. Salcido, Enduring Optimism: Examining the Rig-to-Reef Bargain, 32 Ecol-

ogy L.Q. 863, 912 (2005). 95 See 43 U.S.C. §§ 1301(a), 1311 (2006). For most states, including Louisiana, the bound-

ary between state and federal waters lies three geographical miles offshore. See id. § 1301(a).


of the 200-mile exclusive economic zone.96 The Macondo well was on federal land, fifty miles off the Louisiana coast.97 The Outer Continental Shelf Lands Act (OCSLA) regulates oil and natural gas exploration, development, and extraction from federal off-shore lands.98 Although OCSLA requires environmental safeguards, it prioritizes energy development.99 OCSLA establishes a four-stage proc-ess of planning, leasing, exploration, and development and produc-tion.100 Government discretion is concentrated in the first two stages.101 The first stage is nationwide planning.102 The Secretary of Interior prepares and periodically updates an oil and gas leasing plan, indicat-ing the timing and location of leases that will “best meet national en-ergy needs.”103 The second stage is leasing.104 The Secretary periodi-cally offers tracts, typically three square miles, for lease, as proposed in the five-year plan.105 The exploration stage follows leasing.106 The leaseholder must submit an exploration plan for approval before beginning exploration activities.107 At this point, government discretion is sharply constrained. Interior has only thirty days to review the exploration plan,108 which it cannot disapprove unless it finds that the proposed activities would probably cause serious harm or damage to life, property, mineral re-

96 Salcido, supra note 94, at 867 n.15. 97 Neil King, Jr. & Keith Johnson, Obama Decried, Then Used, Some Bush Drilling Policies,

Wall St. J., July 6, 2010, at A1. 98 43 U.S.C. §§ 1331–1356 (2006). 99 See id. § 1332. OCSLA describes the Outer Continental Shelf (OCS) as “a vital na-

tional resource reserve . . . which should be made available for expeditious and orderly development, subject to environmental safeguards.” Id. § 1332(3). It does, however, call for operations on the OCS to “be conducted in a safe manner by well-trained personnel using technology, precautions, and techniques sufficient to prevent or minimize the likelihood of blowouts, loss of well control, fires, spillages, physical obstruction to other users of the waters or subsoil and seabed, or other occurrences which may cause damage to the envi-ronment or to property, or endanger life or health.” Id. § 1332(6).

100 Sec’y of the Interior v. California, 464 U.S. 312, 337 (1984). 101 See Robert B. Wiygul, The Structure of Environmental Regulation on the Outer Continental

Shelf: Sources, Problems, and the Opportunity for Change, 12 J. Energy, Nat. Resources & Envtl. L. 75, 171 (1992).

102 See Sec’y of the Interior, 464 U.S. at 337. 103 43 U.S.C. § 1344(a). 104 See Sec’y of the Interior, 464 U.S. at 337. 105 See 43 U.S.C. §§ 1337, 1344(d)(3)(describing that leases may only be offered in ar-

eas and on terms consistent with the approved leasing program). 106 See Sec’y of the Interior, 464 U.S. at 337. 107 40 C.F.R. § 1508.18 (2010). 108 43 U.S.C. § 1340(c)(1).


sources, national security, or the environment.109 If it disapproves an exploration plan, Interior may choose to cancel the lease, provided it is willing to compensate the lessee.110 Lessees also need permits to develop oil or gas once a commer-cially viable find is made.111 As with exploration plans, Interior has only limited ability to disapprove a development and production plan.112 It can do so only if: the applicant has not shown that it can comply with applicable law; the proposal is not in compliance with the CZMA; the proposal would threaten national security or defense; or “because of exceptional geological conditions . . . exceptional resource values in the marine or coastal environment, or other exceptional circum-stances,” and proceeding “would probably cause serious harm or dam-age” to human or aquatic life, property, mineral resources, national defense or the environment, and the advantages of disapproval out-weigh those of development and production.113

B. Outside Perspectives in the Environmental Review of the Macondo Well

Environmental review of offshore oil and gas development is tied to the OCSLA stages.114 In the Gulf of Mexico, NEPA review occurs primar-ily at the planning and leasing stages.115 ESA review also occurs at those stages.116 CZMA review occurs later, at the exploration plan stage.117 In the course of approving development of the Macondo well, MMS created all the required documents.118 In retrospect, it is obvious that MMS’s analysis of the environmental risks of deepwater drilling fell badly short of the information available at the time,119 as might be expected of a cap-tured agency.120 More importantly for this Article, MMS also submitted its analysis to the required outside agency reviews, but those reviews did not correct, or even highlight, the shortcomings of its analysis.

109 Id. §§ 1334(a)(2)(A)(i), 1340(c). 110 Id. § 1340(c)(1). 111 See id. § 1351. 112 See id. §§ 1340(c), 1351. 113 Id. § 1351(h)(1); see also 30 C.F.R. § 250.271 (2010). 114 Alexander, supra note 16, at 3. 115 See CEQ Report, supra note 16, at 11. 116 See Letter from Roy E. Crabtree, Reg’l Adm’r, Nat’l Marine Fisheries Serv., to Joseph

Christopher, Reg’l Supervisor, Mineral Mgmt. Serv. ( June 29, 2007) (on file with author). 117 See 43 U.S.C. § 1340(c). 118 See generally 2007–2012 FEIS, supra note 12. 119 See id. at IV-1, IV-29. 120 See id.


1. NEPA Review

NEPA review can take three forms, depending upon the expected level of environmental impact. An EIS must be prepared if the pro-posed action may significantly affect the quality of the human envi-ronment.121 An Environmental Assessment (EA) is a less elaborate study, prepared with less extensive public and outside agency involve-ment, used primarily to determine if an EIS is required.122 A categorical exclusion is used when the agency has determined in advance that a class of actions does not, individually or collectively, have a significant environmental impact.123 Agencies invoking categorical exclusions are expected to conduct at least a brief review to determine that the exclu-sion applies.124 Each of these forms of review played a role in the lengthy process that led to issuance of an exploratory drilling permit for the Macondo well.125 Over the course of three years, the NEPA process produced a great deal of paper, documented the effects of construction and rou-tine operations, and confidently but wrongly forecast that the risks of environmental damage from a large oil spill were negligible.126 MMS routinely prepares an EIS to accompany the five-year offshore leasing program.127 In April 2007, the agency released a programmatic EIS covering the environmental impacts of the 2007 to 2012 program.128 In a conspicuous example of “past performance syndrome,” the 2007 to 2012 EIS estimated the potential magnitude and environmental effects of oil spills in the same way the EIS supporting the prior five-year pro-gram had done. Both EISs relied on historic spill data to estimate the likelihood of a “large spill,” meaning one exceeding 1000 barrels.129 Both based their analysis of environmental effects on mean historical spill sizes from a platform (1500 barrels), pipeline (4600 barrels), and

121 42 U.S.C. § 4332(2)(C) (2006). 122 40 C.F.R. § 1508.9 (2010). 123 Id. § 1508.4. 124 See Final Guidance for Federal Departments and Agencies on Establishing, Apply-

ing, and Revising Categorical Exclusions Under the National Environmental Policy Act, 75 Fed. Reg. 75,628, 75,629 (Dec. 6, 2010) (to be codified at 40 C.F.R. pt. 1500–1508).

125 See Alexander, supra note 16, at 4, 10, 11. 126 See generally 2007–2012 FEIS, supra note 12, at IV-1, IV-29. 127 See generally id.; Minerals Mgmt. Serv., U.S. Dep’t of the Interior, Outer Conti-

nental Shelf Oil and Gas Leasing Program: 2002–2007, Final Environmental Im-pact Statement, 4-25 (2002) [hereinafter 2002–2007 FEIS].

128 See generally 2007–2012 FEIS, supra note 12. 129 See 2002–2007 FEIS, supra note 127, at 4-25.


tanker (5300 barrels) in the Gulf of Mexico.130 Neither discussed a blowout scenario, or questioned whether the historic record was infor-mative, given the recent trend toward deeper water development.131 The earlier EIS did not specifically address the impacts of a deep-water spill, as opposed to a coastal one, except to opine that a spill oc-curring in deepwater would not reach the shore.132 The 2007 to 2012 EIS briefly addressed the expected behavior of a deepwater spill.133 On the basis of a single Norwegian experiment at a depth of less than 1000 meters, it assumed that oil from a deepwater blowout would rise to the surface, where “[s]tandard response procedures” could be used.134 Like the earlier programmatic EIS, the 2007 to 2012 version assumed that any deepwater spill would not reach the coast.135 Indeed, the emphasis on deepwater leasing in the 2007 to 2012 program was presented as reducing the potential for coastal environmental impacts.136 Overall, the tone of both EISs was reassuring. The earlier one repeatedly de-scribed the impacts of expected spills on a variety of environmental re-sources as minor to moderate.137 The later one did not use that termi-nology, but it described impacts on everything from birds to marine mammals to fisheries to tourism as localized and temporary.138 Neither programmatic EIS included anything like a worst-case analysis.139 The law did not require that they do so, at least not explic-itly. The original CEQ regulations for NEPA implementation, issued in 1978, had required worst-case analysis when the consequences of a

130 2007–2012 FEIS, supra note 12, at IV-29; 2002–2007 FEIS, supra note 127, at 4-26. 131 See generally 2007–2012 FEIS, supra note 12 (mentioning blowouts and their poten-

tial impacts only briefly); 2002–2007 FEIS, supra note 127. 132 See 2002–2007 FEIS, supra note 127, at 4-46 (“Deepwater spills would either be

transported away from coastal habitats, or natural weathering processes would prevent most of the oil from reaching coastal habitats.”).

133 See 2007–2012 FEIS, supra note 12, at IV-43. 134 Id. 135 Id. at IV-57 (“Deepwater spills would either be transported away from coastal habi-

tats or prevented, for the most part, from reaching coastal habitats by natural weathering processes.”).

136 See id. at IV-75 (“Because 75 percent of the development that is expected to occur during the 2007–2012 program is assumed to occur far from the coast in deep and ul-tradeep water, the likelihood of a large spill occurring close enough to the coastline to affect turtle nesting beaches is expected to be small.”). That same claim is repeated with respect to other coastal resources. See id.

137 See 2002–2007 FEIS, supra note 127, at 2-2. 138 See 2007–2012 FEIS, supra note 12, at III-18 to III-68. 139 See generally 2007–2012 FEIS, supra note 12; 2002–2007 FEIS, supra note 127.


proposed federal action were uncertain,140 but that requirement was eliminated during the Reagan administration.141 The current regula-tion requires only that agencies consider the reasonably foreseeable impacts of their actions.142 Although it defines “reasonably foreseeable” to include catastrophic, low-probability consequences,143 the removal of the words “worst case analysis” from the regulation has made it easy for agencies to avoid confronting the worst possibilities.144 MMS got nowhere near a worst-case analysis.145 It did not even live up to a generous interpretation of the current regulation; it considered only the consequences of what it thought was the most likely oil spill scenario. But no one questioned whether larger spills might be “rea-sonably foreseeable.”146 EPA reviewed the draft programmatic EIS un-der its NEPA and Clean Air Act authorities. It identified a handful of concerns related to the selection of alternatives, cumulative impacts, and the discussion of Clean Water Act permits, but allowed the oil spill estimates to pass without comment.147 More detailed environmental analysis is tiered to the program-matic EIS prepared for the five-year program. Another EIS is prepared prior to lease sales.148 In the central and western Gulf of Mexico, the most active offshore drilling region, MMS prepares a single regional EIS for all lease sales proposed by the five-year program.149 For any lease sale conducted more than a year after that EIS is issued, MMS also

140 National Environmental Policy Act—Regulations, 43 Fed. Reg. 55,978, 55,997 (Nov.

29, 1978). 141 National Environmental Policy Act—Regulations, 51 Fed. Reg. 15,618 (Apr. 25,

1986) (codified at 40 C.F.R. § 1502.22 (2010)). 142 40 C.F.R. § 1502.22. 143 Id. 144 See Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 355–56 (1989);

Houck, supra note 16, at 11,038. 145 An early critique of NEPA compliance, published in 1977, asserts that EISs issued by

the Department of Interior were more likely to over- than under-state environmental im-pacts, “creat[ing] a mood of pessimism about the possible impacts even while ostensibly maintaining a neutral tone.” Bardach & Pugliaresi, supra note 37, at 28. While a pessimistic mood may have been typical of Interior’s NEPA analyses in that era, it certainly was not characteristic of MMS in the years leading up to the Deepwater Horizon blowout. See, e.g., 2002–2007 FEIS, supra note 127, at iii–v.

146 See, e.g., id. at 4-202. 147 Letter from Anne Norton Miller, Dir., Office of Fed. Activities, Envtl. Prot. Agency,

to James F. Bennett, Branch of Envtl. Assessment, Minerals Mgmt. Serv. (Nov. 22, 2006) (on file with author).

148 Minerals Mgmt. Serv., Dep’t of the Interior, Leasing Oil and Natural Gas Re-sources: Outer Continental Shelf 20 (2005) [hereinafter MMS, Outer Continental Shelf], available at http://www.boemre.gov/ld/PDFs/GreenBook-LeasingDocument.pdf.

149 Id. at 20.


prepares a separate EA to determine if there are additional environ-mental impacts that were not considered in the regional EIS.150 Shortly after completing the 2007 to 2012 programmatic EIS, MMS issued a regional EIS for the planned central and western Gulf lease sales.151 In October 2007, even though less than a year had passed since the programmatic EIS, MMS also issued an EA for Lease Sale 206, which included the Macondo prospect.152 That EA found no need for a new EIS.153 The lease sale environmental analysis added nothing to the pro-grammatic EIS in terms of the likelihood or consequences of an oil spill.154 In fact, in some ways it softened the analysis in the program-matic document. The lease sale EIS forecast one or two spills over the life of the facilities made possible by the group of sales. It predicted that those spills would probably come from pipelines; that their most likely size was 4600 barrels each; and that any oil spilled in deepwater would dissipate before reaching shore.155 MMS acknowledged that “loss of well control” was becoming more common and that blowout pre-venters were known to fail frequently, but still presented the risk of a resulting oil spill as minimal.156 EPA reviewed the regional lease sale EIS and reported no objections, although it did request more informa-tion on responses to a spill, “[g]iven the large distances to many new OCS operating leases.”157

With only that cursory environmental analysis preceding it, Lease Sale 206 in the central Gulf of Mexico was offered for bids in March 2008.158 The sale encompassed a huge geographic area of more than

150 See id. 151 Minerals Mgmt. Serv., Dep’t of the Interior, Gulf of Mexico OCS Oil and Gas

Lease Sales: 2007–2012; Western Planning Area Sales 204, 207, 210, 215, and 218; Cen-tral Planning Area Sales 205, 206, 208, 213, 216, and 222: Final Environmental Impact Statement (2007) [hereinafter Lease Sales FEIS], available at http://www.gomr.boemre. gov/PDFs/2007/2007-018-Vol1.pdf.

152 See Minerals Mgmt. Serv., Dep’t of the Interior, MMS 2007-059, Proposed Gulf of Mexico OCS Oil and Gas Lease Sale 206, Central Planning Area, Environmental As-sessment, at ii (2007), available at http://www.gomr.boemre.gov/PDFs/2007/2007-059.pdf.

153 See id. 154 See id. at 13–63 (analyzing potential impacts). 155 See Lease Sales FEIS, supra note 151, at 4-228 to -250. 156 Id. at 4-249 to -250 (noting that of sixty-two instances of loss of well control over ten

years, only ten resulted in oil loss, the largest being only about 1000 barrels). 157 Letter from Rhonda M. Smith, Chief, Office of Planning & Coordination, to Chris C.

Oynes, Reg’l Dir., MMS ( Jan. 9, 2007) (on file with author). 158 Press Release, MMS, Dep’t of the Interior, MMS Issues Final Notices of Central and

Eastern Gulf Lease Sales (Feb. 13, 2008), available at http://www.gomr.boemre.gov/homepg/ whatsnew/newsreal/2008/080213.pdf.


5000 three-square-mile blocks.159 It set a revenue record, attracting nearly $3.7 billion in high bids.160 Mississippi Canyon Block 252, also known as the Macondo prospect, was one of the hot sellers.161 It at-tracted six different bids.162 BP’s was the highest, at over $34 million.163 Once it accepted BP’s bid, the government was committed to al-lowing exploratory drilling and development unless it could show a high likelihood of severe environmental impacts. No more NEPA analy-sis was undertaken. From 1986 until after the Deepwater Horizon disas-ter, approvals of exploration or development plans in the central and western Gulf of Mexico were covered by a categorical exclusion.164 That categorical exclusion was never defended in a public forum.165 On its web site, MMS offers a “past performance” justification: “hundreds of Environmental Assessments (EAs) were prepared for approval of cer-tain types of oil and gas exploration and development and production plans in the central and western Gulf of Mexico. However, none of those EAs identified the need to prepare an Environmental Impact Statement (EIS).”166 BP submitted a proposed exploration plan for the Macondo pros-pect in February 2009.167 It proposed drilling in nearly 5000 feet of wa-ter, but assured MMS that no new or unusual technologies would be

159 See id. 160 Press Release, Office of the Sec’y, Dep’t of the Interior, Oil and Gas Lease Sales in

Gulf of Mexico Attract $3.7 Billion (Mar. 19, 2008), available at https://www.mms.gov/ homepg/whatsnew/newsreal/2008/080319.pdf.

161 See Minerals Mgmt. Serv., Dep’t of the Interior, Oil and Gas Lease Sale 206: Final Bid Recap, Central Gulf of Mexico 42 (2008), available at http://www.gomr. boemre.gov/homepg/lsesale/206/206FinalBidRecap.pdf.

162 See id. 163 See id. 164 See Minerals Mgmt. Serv., Dep’t of the Interior, Departmental Manual, at pt.

516, 15.4(C) (2004) available at http://206.131.241.18/app_DM/act_getfiles.cfm?relnum=3625 (establishing categorical exclusion for “[a]pproval of an offshore lease or unit exploration, development/production plan or a Development Operation Coordination Document in the central or western Gulf of Mexico”).

165 Although MMS did invite public comment on its NEPA procedures before finaliz-ing them, it did not offer any explanation for its categorical exclusions. See National Envi-ronmental Policy Act; Proposed Implementing Procedures, 50 Fed. Reg. 9132, 9133 (Mar. 6, 1985).

166 National Environmental Policy (NEPA)—Categorical Exclusion Reviews, Bureau of Ocean En-ergy Mgmt., Regulation & Enforcement, http://www.boemre.gov/eppd/compliance/nepa/ policy/ce/index.htm (last visited Apr. 15, 2011).

167 See generally BP Exploration & Production, Initial Exploration Plan, Missis-sippi Canyon Block 252 (2009), available at http://www.scribd.com/doc/35728155/29977- BP-Initial-Exploration-Plan-Mississippi-Canyon-Block-252-OCS-G-32306.


used.168 MMS did not require that the exploration plan evaluate a blow-out scenario.169 Nonetheless, BP did provide an estimate of the worst-case scenario, a blowout spewing 162,000 barrels of oil per day.170 The company assured MMS that it could handle containment and clean up of that worst case, citing its approved oil spill response plan.171 In April 2009, MMS approved the exploration plan under its Gulf of Mexico categorical exclusion, after minimal review,172 as it has done for hun-dreds of other permits.173 No outside agency reviewed those approvals.

2. ESA Consultation

MMS informally consulted with FWS and NMFS at the planning stage on the impacts of the 2007 to 2012 leasing program on threat-ened and endangered species.174 It took the position that because there was not likely to be any adverse effect on listed species, formal consulta-tion was not required.175 FWS agreed, and therefore conducted no fur-ther analysis.176 Even taking MMS’s rosy oil spill predictions at face value, it is hard to see how that conclusion was reached. The 2007 to 2012 program-matic EIS conceded, for example, that several threatened and endan-gered coastal bird species could be affected by a nearshore oil spill, and that the whooping crane, whose entire population winters on the Texas Gulf Coast, could be wiped out by a spill affecting its habitat.177 FWS

168 See id. at 2-1. 169 See id.; see also Minerals Mgmt. Serv., Dep’t of the Interior, NTL No. 2008-G04, No-

tice to Lessees and Operators of Federal Oil, Gas, and Sulphur Leases in the Outer Cont’l Shelf, Gulf of Mexico OCS Region: Information Requirements for Exploration Plans and Development Operations Coordination Documents 6 (2008) [hereinafter MMS Notice to Operators], available at http://www.gomr.boemre.gov/homepg/regu-late/regs/ntls/2008NTLs/08-g04.pdf.

170 BP Exploration & Production, supra note 167, at 7-1. 171 See id. BP and the other companies drilling in the Gulf routinely issued similar boi-

lerplate assurances. Mike Soraghan, Industry Claims of ‘Proven’ Technology Went Unchallenged at MMS, N.Y. Times ( June 2, 2010), http://www.nytimes.com/gwire/2010/06/02/02green wire-industry-claims-of-proven-technology-went-unch-55514.html?pagewanted=all.

172 Margaret R. Caldwell et al., Ctr. for Ocean Solutions, The National En-vironmental Policy Act and a Review of MMS NEPA Documents 6, 8, 12–13 (2010), available at http://www.oilspillcommission.gov/resources.

173 See id at 6–7; Houck, supra note 16, at 11,036–37. 174 See Press Release, Dep’t of the Interior, Interior to Examine Endangered Species Ques-

tions as Part of BP Oil Spill Reviews (May 14, 2010), available at http://www.doi.gov/news/ pressreleases/Interior-to-Examine-Endangered-Species-Questions-as-Part-of-BP-Oil-Spill-Reviews.cfm.

175 See id. 176 See id. 177 2007−2012 FEIS, supra note 12, at IV-58.


appears to have been completely asleep at the switch, perhaps lulled by the low probabilities projected for any spill to reach shore. NMFS was a bit more awake. It demanded formal consultation, but concluded that the adverse effects on listed species would not reach the jeopardy threshold.178 Like FWS, NMFS accepted MMS’s oil spill pro-jections.179 Assuming, as MMS did, that there would be only three spills of roughly 4600 barrels each over the forty-year lifetime of the facilities authorized by the program, and that each of these spills would quickly disperse and degrade, NMFS determined that the impacts to threat-ened and endangered species would not violate the ESA.180 Like the NEPA analysis, NMFS’s biological opinion did not exam-ine a worst-case scenario. And like the NEPA analysis, it was ultimately far off the mark. Although the full effects are not yet known, they are clearly serious. More than four hundred oiled sea turtles have been col-lected from Gulf waters since the spill.181 Hundreds of endangered sea turtle nests were relocated from the northern Gulf Coast to the east coast of Florida to protect the hatchlings from swimming into oiled wa-ters.182 It will be decades before the hatchlings return to nest them-selves, allowing the success of that effort to be evaluated.183 A satellite study has suggested that the spill hit a key spawning ground of the At-lantic bluefin tuna, which has been declining precipitously in popula-tion—though it is not yet listed as endangered or threatened.184 Dead and dying corals have been found near the blowout site185 and sam-

178 NMFS, Nat’l Oceanic & Atmospheric Admin., SE Reg’l Office, Protected Res.

Div., Endangered Species Act—Section 7 Consultation Biological Opinion 99 (2007), available at http://sero.nmfs.noaa.gov/sf/deepwater_horizon/02611_MMS_Leases_2007–2012. pdf.

179 See id. at 31–32. 180 See id. at 99. 181 FWS, Deepwater Horizon Response Consolidated Fish and Wildlife Collec-

tion Report 1 (2010) available at http://www.restorethegulf.gov/sites/default/files/documents/ pdf/Consolidated%20Wildlife%20Table%20101310_0.pdf.

182 See Press Release, FWS, State and Federal Wildlife Agencies, Other Partners, Move to Safeguard Sea Turtle Nests FedEx providing transportation to Florida’s Space Coast ( July 9, 2010), http://www.fws.gov/southeast/news/2010/r10-048.html.

183 Leslie Kaufman, Gulf Studies Yield More Than Damage, N.Y. Times, Apr. 12, 2011, at D1. 184 See Bluefin Tuna Hit Hard by ‘Deepwater Horizon’ Disaster, Eur. Space Agency (Oct.

18, 2010), http://www.esa.int/esaCP/SEM1K4WO1FG_index_0.html; Atlantic bluefin tuna (Thunnus thynnus), NOAA Fisheries Off. Protected Resources, www.nmfs.noaa.gov/pr/ species/fish/bluefintuna.htm (last visited Apr. 15, 2011); see also Thunnus Thynus, IUCN Red List Threatened Species, http://www.iucnredlist.org/apps/redlist/details/21860/0 (last visited Apr. 15, 2011).

185 John Collins Rudolf, Dead Coral Found in Gulf, with Oil the Main Suspect, N.Y. Times, Nov. 6, 2010, at A10.


pling miles away from the wellhead has revealed dead bottom-dwelling invertebrates.186 Thousands of birds are known to have been oiled;187 because detection rates for oiled birds are low, hundreds of thousands may have died.188 Similar extrapolations for cetaceans suggest that more than 5000 may have been killed.189 The impacts may be continu-ing; scientists are debating whether an unusual rash of dolphin strand-ings in the spring of 2011 is connected to the spill.190

3. CZMA Consistency Determination

Although lease sales have been subject to consistency review since the 1990 CZMA amendments,191 MMS still prefers to focus state review on the exploration and development stages. Both the CZMA and OC-SLA require consistency review before an exploration or development plan is approved.192 Indeed, at those late stages states have greater au-thority to halt offshore drilling than the federal government; states need only find that drilling would be inconsistent with their approved coastal plan, while the federal government must find that drilling would probably cause severe environmental harm.193 States, however, have rarely used this powerful lever.194 In 2006, MMS reported that since 1978 it had approved more than 10,000 ex-

186 Kaufman, supra note 183. 187 FWS, Bird Impact Data from DOI-ERDC Database Download 1 (2010) [hereinaf-

ter FWS Bird Impact Data], available at http://www.fws.gov/home/dhoilspill/pdfs/Bird %20Data%20Species%20Spreadsheet%2011162010.pdf. As of Nov. 16, 2010, FWS reported that a total of 2888 birds had been found either alive or dead with verified oiling, including more than three hundred Brown pelicans, a species listed at the time of the consultation but since removed from the list, and fifty threatened Least terns. Id.

188 Kaufman, supra note 183. 189 Id. 190 See 2010–2011 Cetacean Unusual Mortality Event in Northern Gulf of Mexico, NOAA

Fisheries Off. Protected Resources, http://www.nmfs.noaa.gov/pr/health/mmume/ cetacean_gulfofmexico2010.htm (last visited Apr, 15, 2011) (documenting unusual dol-phin mortality levels after Fall 2010); Ben Raines, Cold Water Influx in Gulf May Have Deliv-ered Fatal Blow to Dead Dolphins, Press-Register (Mobile, Ala.), Mar. 8, 2011, http://blog. al.com/live/2011/03/cold_water_may_have_delivered.html (quoting a leading dolphin researcher as saying that the unusual mortality levels are likely due to a combination of factors including cold waters and the direct and indirect effects of the Deepwater Horizon blowout).

191 H.R. Rep. No. 101-964, at 970 (1990) (Conf. Rep.); Jack H. Archer, Evolution of the Major 1990 CZMA Amendments: Restoring Federal Consistency and Protecting Coastal Water Qual-ity, 1 Territorial Sea J. 191, 192 (1991).

192 See 43 U.S.C. §§ 1340(c)(2), 1351(d) (2006). 193 See id. § 1340. 194 See Coastal Zone Management Act Federal Consistency Regulations, 71 Fed. Reg.

788, 791 ( Jan. 5, 2006) (codified at 15 C.F.R. pt. 390).


ploration plans and 6000 development and production plans.195 States had concurred with nearly all of those approvals.196 There had only been eighteen appeals of state consistency objections.197 Seven of those objections were overridden by the Secretary of Commerce.198 Very occasionally, states have objected at other OCSLA stages.199 Between 1990, when the CZMA was expanded to cover activities indi-rectly affecting the states’ coastal zones, and 2006, there was only one state objection to a lease sale.200 States have objected six times since 1990 to five-year plans.201 One objection was withdrawn, two were over-ridden, and three were allowed to stand.202 Although states have rarely used the CZMA to halt offshore drilling, they have been able to negoti-ate conditions and information provisions. For example, exploration and development plans potentially affecting Florida must include blow-out scenarios, while those expected to affect only Louisiana need not do

.20

ately withdrew the 1991

demand that MMS and BP provide more information, at the explora-

so 3 Louisiana has been especially reluctant to use its CZMA authority against oil and gas operations. It has objected only twice, once in 1991,204 and again in 2006.205 In both cases, MMS refused to back down, and Louisiana filed suit. Louisiana ultimsuit, and settled the 2006 suit on favorable terms.206 Despite those brief showings of backbone, by the time the Ma-condo well was approved Louisiana had returned to passivity. It appears that MMS submitted a consistency determination to Louisiana for its five-year plan and another for Lease Sale 206.207 The state did not ob-ject to either.208 Louisiana had another opportunity to object, or to

195 Id. 196 Id. 197 Id. 198 Id. 199 See id. 200 See Coastal Zone Management Act Federal Consistency Regulations, 71 Fed. Reg. at

791. 201 See id. 202 Id. 203 See MMS Notice to Operators, supra note 169. 204 Langford et al., supra note 91, at 138. 205 Ryan M. Seidemann & James G. Wilkins, Blanco v. Burton: What Did We Learn from

Louisiana’s Recent OCS Challenge?, 25 Pace Envtl. L. Rev. 393, 401 (2008). 206 Langford et al., supra note 91 at 138–43; Seidemann & Wilkins, supra note 205, at

418. 207 See Sam Kalen, The BP Macondo Well Exploration Plan: Whither the Coastal Zone Man-

agement Act?, 40 Envtl. L. Rep. 11,079, 11,082–83 (2010). 208 See id. at 11,082.


tion plan stage, but again it did not.209 As a result, the CZMA process did not act as a check on either MMS’s environmental analysis or its frantic push to facilitate offshore drilling.

III. Filling in the Missing Ingredients

Claims about the likelihood and consequences of a drilling-associated oil spill made by BP and endorsed by MMS throughout the course of multiple rounds of environmental review turned out to be disastrously wrong. Not only were they wrong in hindsight, there was plenty of contemporary evidence that deepwater drilling presented far greater environmental hazards than MMS acknowledged.210 MMS itself had produced some of that evidence. Eight years before Lease Sale 206, MMS issued an EA for deepwater drilling operations (“Deepwater EA”) which contradicted key assumptions of the subse-quent studies.211 The Deepwater EA concluded that: “[d]eepwater op-erations have the potential to result in oil spills on the OCS that are greatly larger than those previously analyzed;”212 that the behavior of underwater oil plumes could not be confidently predicted;213 that blow-outs, although rare, were far from unknown over the previous twenty-five years and would be more difficult to control in deepwater;214 and that technology was changing rapidly enough that reassessment would be needed periodically.215 Yet neither MMS nor any of the environmental agencies invited or required to review the environmental documentation preceding ap-proval of the Macondo well suggested that a catastrophic oil spill might occur, or that one would be difficult to contain or clean up. Not only did MMS fail at its regulatory task, the environmental agencies failed at their oversight task. MMS was thoroughly captured by the industry it was supposed to regulate, and it fell into an analytic routine where it simply repeated one set of analyses over and over again without critical examination, assuming that because there had not been a major disaster in the re-

209 See id. at 11,083. 210 See, e.g., Houck, supra note 16, at 11,033–35. 211 See Minerals Mgmt. Serv., Dep’t of the Interior, MMS 2000-001, Gulf of Mex-

ico Deepwater Operations and Activities: Environmental Assessment, at iv (2000), available at http://www.gomr.boemre.gov/PDFs/2000/2000-001.pdf.

212 Id. 213 Id. at ix. 214 Id. at II-16 to -17. 215 Id. at II-3.


cent past there was no threat of one in the future.216 Those tendencies are endemic to many regulatory agencies and difficult to correct inter-nally. Oversight by agencies with an environmental mission was sup-posed to counteract them, but also failed disastrously. Part of the ineffective oversight story, no doubt, is that many of the key events happened during the Bush administration, when the leader-ship of the wildlife agencies was not committed to environmental pro-tection.217 But oversight mechanisms should be robust in the face of changes in administrations, at least to the extent of making environ-mental trade-offs visible to the political process. The Deepwater Hori-zon experience highlights some systematic shortcomings and suggests reforms that could improve the oversight process in any administration.

A. The Elements of Effective Review

Two things are needed to make outside review effective. First, the attention of the reviewer needs to be captured and focused on the sali-ent issues. Agencies are chronically short of resources and face many demands on their time.218 Unless they understand the importance of their task in the specific context, they may treat the review as a matter of routine. Furthermore, reviewers should not face unnecessary barriers to identifying the most important or questionable elements of the analysis. Second, for activities that pose an uncertain or low-probability risk of dire environmental harm, reviewers need access to the expertise re-quired to review the risk as well as the potential environmental impacts. Getting the oversight agencies’ committed attention is the key to improving the oversight process. Federal agencies produce roughly 250 to 300 draft EISs each year, and close to an equal number of final EISs.219 There are many more EAs220 and untold numbers of categori-

216 See Houck, supra note 16, at 11,034–35. See generally 2007–2012 FEIS, supra note 12, at IV-3 to -4.

217 See Michael Kunzelman, U.S. Fish and Wildlife Service Said Risk from Gulf Drilling Projects Was ‘Low,’ Huffington Post ( July 5, 2010, 6:38 PM), http://www.huffingtonpost.com/2010/ 07/05/gulf-oil-spill-us-fish-wildlife_n_635743.html.

218 See Comm’n on Risk Assessment & Risk Mgmt., Risk Assessment and Risk Man-agement in Regulatory Decision-Making (1996), available at http://www.riskworld.com/ nreports/1996/risk_rpt/html/nr6aa015.htm (“Federal regulatory agencies are confronted with many problems and issues related to health and environmental protection, but have limited time and resources for action.”).

219 See Council on Envtl. Quality (CEQ), Environmental Impact Statements Filed 1973 Through 2007, http://ceq.hss.doe.gov/nepa/EISs_by_Year_1970_2007.pdf.

220 A survey of federal agencies estimated that, by 1993, 50,000 EAs were being pro-duced annually. CEQ, The Twenty-fifth Anniversary Report 51 (1995), available at http://ceq.hss.doe.gov/nepa/reports/1994–95/25th_ann.pdf.


cal exclusions.221 All told, there is plenty to keep the relatively small proportion of EPA staff dedicated to NEPA reviews busy. Similarly, the FWS faces some 35,000 requests for consultation each year, also cover-ing a wide range of projects.222 Although most are dealt with infor-mally,223 the resource demands are still substantial.

The need for something to grab the reviewing agencies’ attention is heightened if effective review requires the agency to go beyond its core expertise, as it typically does where a risk assessment is needed. Evaluat-ing the probability and magnitude of a blowout is a very different task than evaluating the harm that released oil will cause. The former re-quires the skills of an engineer rather than a biologist. In addition, good risk evaluation requires an understanding of where oil will go and how it will degrade in the marine environment—well outside the expertise of species experts. The further afield the necessary analysis drifts from the reviewing agency’s core expertise, the more important it will be to per-suade the agency that it merits an extraordinary effort. The attention of reviewing agencies needs to be directed both generally at the documents that could most benefit from oversight, and specifically on the key portions of those documents. An early criticism of NEPA environmental analyses remains accurate: they are “very bulky documents”224 that tend to spend many pages on matters of limited relevance to the decision, are often organized in ways that are difficult to follow,225 and do not highlight the most important issues.226 CEQ could help on this score by updating its guidelines for implementing NEPA. Those guidelines require that NEPA documents “be written in plain language . . . so that decisionmakers and the public can readily understand them.”227 Anyone who has plowed through an EIS knows that regulation has not produced documents which are either readable or understandable. With the benefit of more than forty years of NEPA experience, CEQ should try to develop broader guidance for organiza-tion and presentation of NEPA analyses to highlight the issues of great-est controversy or importance to the decision. EPA could also use its

221 The categorical exclusion is “the most frequently employed method of complying

with NEPA.” CEQ, 3125-W0, Final Guidance for Federal Departments and Agencies on Establishing, Applying, and Revising Categorical Exclusions Under the Na-tional Environmental Policy Act 17 (2010).

222 FWS Agency Consultations, supra note 73, at 2. 223 See id. 224 Bardach & Pugliaresi, supra note 37, at 25. 225 Id. at 27. 226 Id. 227 40 C.F.R. § 1502.8 (2010).


mandated review of all federal EISs228 to highlight and request im-provement of unnecessarily turgid or confusing documents. Reviewing agencies also need access to appropriate expertise, which may go well beyond their core competence. They might get that expanded expertise by providing current employees with additional training, hiring new employees with the needed skills, or contracting with expert consultants. In some cases that additional expertise may only be needed for a short term, to prepare a primer or guidance document that can be used by non-expert reviewers.229 The reviewing agency must have experts responsive to its environmental mission in order to perform its oversight function effectively. But it also must have experts capable of understanding the engineering challenges of deep-water oil production, the technologies currently in use and on the ho-rizon, and the options for responding to a blowout. Perhaps that exper-tise already exists in the federal government—the United States Geological Survey has considerable experience with oil production.230 Perhaps it exists in academia or in the National Academies—following the Deepwater Horizon disaster, Interior sought review of the blowout by the National Academy of Engineering.231 However it is done, though, invoking that additional expertise will impose resource costs, which must come either from other agency programs or from added appropriations. That is why it is critical to persuade reviewing agencies of the importance of their task.

B. Getting the Attention of Oversight Agencies with Worst-Case Analysis

An effective oversight procedure must provide clear signals to re-viewing agencies of when they should be willing to invest unusual levels of resources. Clear and explicit worst-case analysis, as CEQ once re-

228 See supra notes 55–57 and accompanying text. 229 An example might be guidance prepared by EPA’s Office of Federal Activities with

the technical assistance of outside consultants to help reviewers of EISs for nuclear power plant projects “identify specific aspects of the EIS that have a heightened ability to cause environmental non-compliance.” EPA, § 309 Reviewers Guidance for New Nuclear Power Plant Environmental Impact Statements 1-1 (2008), available at http://www. epa.gov/compliance/resources/policies/nepa/309-reviewers-guidance-for-new-nuclear-power-plant-EISs-pg.pdf.

230 See USGS Energy Resources Program, U.S. Geological Survey, http://energy.usgs. gov/ (last visited Apr. 15, 2010) (showing that the United States Geological Survey has experi-ence with oil and gas assessment).

231 See Nat’l Academy of Engineering & Nat’l Research Council, Interim Report on Causes of the Deepwater Horizon Oil Rig Blowout and Ways to Prevent Such Events 1 (2010), available at http://www.nationalacademies.org/includes/DH_Interim_ Report_final.pdf.


quired under NEPA, can provide that signal. Worst-case analysis need not be required for every project; it is important only when there is an uncertain or low probability risk of a disastrous event, like an oil well blowout or a successful terrorist attack on a nuclear installation.232 Worst-case analysis is especially important where an agency individually approves large numbers of projects, each of which has a low probability of causing large harm, as MMS does in the Gulf of Mexico. Multiplied by hundreds or thousands of deepwater operations, even a very low in-dividual probability of catastrophe becomes significant. By highlighting the importance of technological, engineering, or other assumptions, a worst-case analysis can help reviewing agencies identify the additional expertise they need to effectively fulfill their roles. If they fully understood how crucial MMS’s assumptions about the low probability and limited extent of oil spills were to the environ-mental analysis, EPA and the wildlife agencies might have been more highly motivated to push on the justification for those assumptions. They might have assigned staff to track MMS’s environmental analyses, including the Deepwater EA which seemed to disappear into thin air once it had been completed. They might have contracted with the Na-tional Academy of Engineering, with the United States Geological Sur-vey, or with other outside experts to advise them or to peer review MMS’s assumptions. And they could have made a better case to budget and political authorities for devoting those resources to those purposes. That raises another issue—the mindset of reviewing agencies must be broadened, both from within and from without. Environmental agencies have to internalize the idea that their job requires them to understand key industries as well as the environment. Ideally, they should be encouraged by the administration at the highest level, and by the relevant congressional oversight committees, to see that form of review as an essential aspect of their mission. Again, having a serious, robust worst-case analysis could help both internal and external audi-ences make that connection. A serious, robust worst-case analysis might also help reluctant states see the importance of their own oversight role and commit the re-sources necessary to fulfill that role. The CZMA has been a tool of widely varying utility, in large part because different states have dis-played very different willingness and ability to use it. California and

232 See San Luis Obispo Mothers for Peace v. Nuclear Regulatory Comm’n, 449 F.3d

1016, 1019, 1035 (9th Cir. 2006) (considering whether risk of terrorist attack must be eva-luated in course of nuclear licensing proceedings).


Florida, two states highly conscious of the contribution of their coastal environment to their economies, have wielded the CZMA effectively against offshore drilling and other threats.233 Louisiana has not.234 In part, that is simply a reflection of the states’ different economic goals, or perhaps of the different economic and political power of the poten-tial victims of offshore accidents. But it may also be a reflection of the unwillingness of Louisiana to confront the tension between its com-mitment to the oil and gas industry, its established commercial fishing industry, and its increasing emphasis on tourism. A robust worst-case analysis might have brought home the potential costs, economic and social, of a catastrophe before one happened, helping the state more realistically evaluate the trade-offs it was unknowingly making.235 Furthermore, an accurate worst-case analysis would allow other states a say in the trade-offs which affect them, and would facilitate a clearer view of the extent to which nationally important resources were at stake. Although the bulk of the coastal impacts from the Deepwater Horizon blowout have been felt in Louisiana, oil found its way to beaches in Florida, Alabama, and Mississippi;236 fishing closures and tourism scares affected the regional economy;237 and the spill’s continu-ing effects threaten bird and fish species that are national assets.238 Yet

233 See, e.g., California v. Norton, 311 F.3d 1162, 1165 (9th Cir. 2002); Andrew S. Jessen, Comment, Louisiana and the Coastal Zone Management Act in the Wake of Hurricane Katrina: A Renewed Advocacy for a More Aggressive Use of the Consistency Provision to Protect and Restore Coastal Wetlands, 12 Ocean & Coastal L.J. 133, 134–36 & n.12 (2006).

234 See Langford et al., supra note 91, at 143; see also Jessen, supra note 233, at 136 n.12. 235 It might also help if more data were available concerning the relative economic im-

pact of extractive and environmentally sensitive sectors. According to a recent report, there are more than five times as many Gulf jobs in the tourism and fishing industries as in oil and gas production. Michael Gravitz, Env’t Am. Research & Policy Ctr., Too Much at Stake: Don’t Gamble with Our Coasts 2 (2010), available at http://www.environment america.org/home/reports/report-archives/ocean-conservation/healthy-oceans/too-much-at-stake-dont-gamble-with-our-coasts.

236 Natural Res. Def. Council, Deepwater Horizon Oil Spill: Beach Closures, Advisories, and Notices as of July 27, 2010, at 1, 4 (2010), available at http://www.nrdc. org/water/oceans/ttw/gulf.pdf; Ping Wang & Tiffany M. Roberts, Univ. of S. Fla., Ongoing Beach Cleanup of the BP Oil Spill—A Superficial Job, Literally 1 (2010), available at http://news.usf.edu/article/articlefiles/2566-PW%202nd%20Beach%20report. pdf.

237 See U.S. Gov’t Accountability Office, GAO-10-723, Hurricanes Katrina and Rita: Federally Funded Programs Have Helped to Address the Needs of Gulf Coast Small Businesses, but Agency Data on Subcontracting Are Incomplete 44–48 (2010); Sara K. Clarke & Kevin Spear, Florida Panhandle Hotels Hurt By Oil Spill’s Effects, L.A. Times, Oct. 23, 2010, at B2.

238 See FWS Bird Impact Data, supra note 187; How the Gulf Oil Spill Could Hurt Animals, Nat’l Wildlife Fed’n (May 4, 2010), http://www.nwf.org/News-and-Magazines/National- Wildlife/Animals/Archives/2010/Oil-spill-species.aspx.


MMS has been all too willing in the past to follow the gung-ho, “drill, baby, drill” attitude of pro-drilling states like Louisiana.239 That defer-ence to local preferences can seem justified if Louisiana bears the brunt of both the economic costs of restricting drilling and the environmental costs of any disaster. To the extent that worst-case analysis shows that a significant portion of the environmental costs may be externalized, it would encourage wider engagement in the ultimate decision. A worst-case analysis sufficient to serve this purpose need not be difficult either for the action agency to produce or for a reviewing agency to evaluate. For the Macondo well, for example, a worst-case analysis would have considered the highest expected pressure in the well, the size of the reservoir, the worst time of year for a blowout, and where the oil might go if it did not quickly degrade and hit unfavorable wind or current conditions. The attention-grabbing headline of a worst-case analysis will motivate reviewing agencies—and the interested pub-lic—to question whether the action agency has gotten the nuances right. One might legitimately question what difference more skeptical oversight and a credible worst-case analysis would make to the ultimate decisions. The short answer is that it would force decision makers to ac-tually confront the potential trade-offs. Additionally, federal or state regulators could have demanded more credible assurances in advance that BP knew how to kill a wild deepwater well, required that a relief well be drilled in parallel with the exploratory well, researched the effective-ness and impacts of dispersants applied in deep water, or checked to see if promised response capabilities actually existed.

C. Getting from Here to There

Perhaps the most attractive feature of this analysis is that it suggests a fix which does not need congressional action or even regulatory change. CEQ can explicitly amend its regulations to reinstate the worst-case analysis requirement. But regulatory correction, while desirable, is not necessary. CEQ never firmly renounced worst-case analysis, it sim-ply dropped the explicit reference to it.240 The current regulation con-tinues to require that NEPA documentation analyze even low probabil-

239 Although MMS has been happy to cooperate with pro-drilling states, it has been no-

tably less cooperative on the rare occasions that Louisiana has sought to slow offshore de-velopment. See Seidemann & Wilkins, supra note 205, at 401–04.

240 See 40 C.F.R. § 1502.22 (2010).


ity catastrophic results, provided they lie within the rule of reason.241 In an August report on the Deepwater Horizon NEPA failures, CEQ sug-gested—although its phrasing could have been more explicit—that blowout analysis must be included in future NEPA documentation for offshore drilling approvals.242 EPA, in its NEPA oversight role, should make sure that BOEMRE follows that recommendation,243 that its analysis is a worst-case one rather than a simple reassurance that blow-outs are not usually disastrous,244 and that other agencies whose actions raise risks of catastrophe also include credible worst-case analyses. The wildlife agencies should follow CEQ’s lead. They also need not amend their regulations, although the better practice would be to do so.245 They should require that action agencies seeking either for-mal consultation or concurrence with a no adverse effects determina-tion include a worst-case analysis for any low-probability but high-impact effects.

Where environmental risks result from technological advances, as in the case of offshore oil development, it would also be desirable to have periodic outside review of technological change—such as increas-ing capability to exploit deepwater petroleum reserves—and the extent to which it increases existing environmental risks or adds new ones. Worst-case analysis can highlight contexts in which such review would be helpful. Congress should impose periodic review requirements, but the administration need not wait for legislative action. Worst-case analy-

241 See id. 242 CEQ, Report Regarding the Minerals Management Service’s National Envi-

ronmental Policy Act Policies, Practices, and Procedures as They Relate to Outer Continental Shelf Oil and Gas Exploration and Development 26–29 (2010), available at http://www.whitehouse.gov/sites/default/files/microsites/ceq/20100816-ceq-mms-ocs-nepa.pdf.

243 In a recent draft Supplemental EIS for a lease sale in the western Gulf of Mexico, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) did pre-pare a “Catastrophic Spill Event Analysis,” based on a Deepwater Horizon-sized blowout. BOEMRE, Gulf of Mexico OCS Oil and Gas Lease Sale: 2011, Western Planning Area Lease Sale 218, Draft Supplemental Environmental Impact Statement, at App. B (2011). That analysis provides a much more detailed picture of the potential for serious long-term environmental damage from a blowout than the agency’s pre-Deepwater Horizon NEPA documents. See id. Unfortunately it is buried in an appendix while the text of the draft EIS sunnily proclaims that there is no need to revise earlier estimates of environmental impacts. See id. Still, the appendix should be enough to get the attention of outside reviewers.

244 See Houck, supra note 16, at 11,036–37 (noting that “the ‘no risk’ environmental documents did them in”); see also 2007−2012 FEIS, supra note 12, at IV-18.

245 Eighteen months ago, the Obama administration issued notice that it was consider-ing revising the regulations governing ESA consultations, but nothing has yet come of that declaration. See Interagency Cooperation Under the Endangered Species Act, 74 Fed. Reg. 20,421, 20,421–22 (May 4, 2009) (codified at 50 C.F.R. pt. 402).


sis should help increase the leverage of environmental agencies within the administration and even within cabinet departments. The Secretary of the Interior, alerted by FWS and other environmental bureaus, could seek the advice of the National Academy of Engineering or other out-side experts as part of the periodic OCSLA planning process. If the Department of the Interior declines to institute a commitment to such review on its own, the President could mandate it through executive order, or could make it part of his recently launched marine spatial planning initiative.246

Conclusion

MMS was a rogue agency. Forty years of experience suggests, how-ever, that it was not alone in its cavalier treatment of environmental re-view requirements.247 The availability of citizen suits helps, but lack of resources and expertise make the public an imperfect watchdog. Envi-ronmental agencies can play that role most effectively. But the Deepwa-ter Horizon saga exposes some serious flaws in outside agency oversight. A robust worst-case analysis requirement for risky activities, which could be imposed by administrative fiat or even interpretation, would go a long way toward improving environmental agency oversight. Strength-ening and actually trying to enforce mandates for readability, and re-quiring that environmental analyses focus on issues of importance to the decision would also help. In the long term, of course, it would be better for Congress to impose clearer and stronger environmental protection obligations in development statutes like OCSLA.248 Requiring that the Department of the Interior not only solicit the comments of environ-mental agencies on its five-year plans for offshore development, but also

246 Allison Winter, NOAA Grant Proposal Could Launch Marine Zoning, N.Y. Times, Feb. 5,

2010, http://www.nytimes.com/gwire/2010/02/05/05greenwire-noaa-grant-proposal-could- launch-marine-zoning-54858.html; see also National Ocean Council, White House, http://www. whitehouse.gov/administration/eop/oceans (last visited Apr. 15, 2011).

247 See Bradley C. Karkkainen, Toward a Smarter NEPA: Monitoring and Managing Gov-ernment’s Environmental Performance, 102 Colum. L. Rev. 903, 906–07 (2002) (“Agencies have come to terms with the formal demands of the NEPA Environmental Impact State-ment requirement by routinizing and compartmentalizing their response, effectively mar-ginalizing its operative effect and thereby circumventing NEPA’s core purpose.”).

248 DeShazo and Freeman, for example, conclude that amendments to the Federal Power Act have been more effective than the addition of other environmental mandates like NEPA in convincing the Federal Energy Regulatory Commission to include environmentally protective conditions in hydropower relicensings. DeShazo & Freeman, supra note 27, at 2217, 2293–94.


respond to any objections in writing would greatly improve environ-mental oversight. Of course, the real challenge is to foresee the next problem. No doubt at least in the immediate future both industry and regulators will be well attuned to the kind of failure that occurred on the Deepwater Horizon. Whether they will better anticipate and plan for the next un-expected low-probability environmental disaster is another question. With strong external review as a starting point, the answer is more likely to be yes.

THREE META-LESSONS GOVERNMENT AND INDUSTRY SHOULD LEARN FROM THE BP

DEEPWATER HORIZON DISASTER AND WHY THEY WILL NOT

Alyson C. Flournoy*

Abstract: There are many law and policy lessons to be learned from the BP Deepwater Horizon disaster and its aftermath. Some are lessons spe-cific to the BP oil well blowout. Regrettably, Congress has failed to enact even these critical reforms, although some important regulatory reforms have been adopted. This Article focuses on three broader lessons that this disaster should also teach, but that are very unlikely to be learned; lessons that could help to reduce the risk of future disasters. These meta-lessons suggest the need to: (1) learn from the next disaster—not the last one; (2) learn from the blueprint of the disaster; and (3) learn from the context of the disaster. However, both the limited scope of the reforms undertaken in the year since the disaster and the blueprint of the disaster highlight why government and industry are unlikely to learn these broader lessons.

Introduction

On April 20, 2010, BP and its contractors had drilled the Macondo oil well in the Gulf of Mexico to its final depth of over 18,000 feet, and were cementing the well’s steel casing.1 A dangerous buildup of meth-ane gas in the well rose to the surface, causing an explosion and fire that destroyed the Deepwater Horizon drilling rig, leading it to collapse and sink.2 Eleven workers from the rig were never found.3 The rest were evacuated, with seventeen suffering injuries.4 Oil began to leak into the Gulf. Repeated efforts to trigger the blowout preventer failed,

* © 2011, Alyson C. Flournoy, UF Research Foundation Professor & Alumni Research

Scholar, University of Florida Levin College of Law. I am grateful to Erin Ruff Riggs for her dedicated research assistance.

1 See Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drill-ing, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling 1 (2011) [hereinafter BP Commission Report], available at http://www.oilspillcommission. gov/sites/default/files/documents/DEEPWATER_ReporttothePresident_FINAL.pdf.

2 See id. at vi, 1–18. 3 See id. at vi. 4 Campbell Robertson, Search Continues After Oil Rig Blast, N.Y. Times, Apr. 22, 2010, at

A13.

281


leaving the well to gush oil, uncontrolled.5 Measures to collect some of the flow were ultimately successful.6 However, according to best esti-mates, by the time the well was sealed roughly three months later, close to five million barrels of oil had flowed into the Gulf.7 This Article focuses on this series of events as a disaster. The term disaster is a useful descriptor and lens through which to view the events for several reasons. First, the term seems more apt than the terms “oil spill” and “blowout” that have frequently been used to describe the events and their aftermath.8 Neither of these terms captures the scale of the damage, nor provides any insight into the causes. If anything, both seem to suggest a technical failure and direct us to view the events through a technological lens. In contrast, the ordinary meaning of dis-aster is an occurrence inflicting widespread destruction and distress.9 The term disaster invites consideration of events broadly, through the lens of systems theory and other social science approaches that analyze disasters and the role that organizational learning plays in creating dis-asters and their preconditions.10 This allows us to see that disasters caused by humans result not just from technical problems, but from a significant disruption or collapse of a community’s or organization’s cultural beliefs and norms about hazards.11 Rigid human and organiza-tional beliefs and norms frequently collide with technical systems dur-

5 BP Commission Report, supra note 1, at 114–15. 6 Id. at 159. 7 The Amount and Fate of the Oil 18 (Nat’l Comm’n on the BP Deepwater Horizon Oil Spill

& Offshore Drilling, Working Paper No. 3, 2011), available at http://www. oilspillcommission.gov/sites/default/files/documents/Updated%20Amount%20and%20Fate%20of%20the%20Oil%20Working%20Paper.pdf.

8 See, e.g., William J. Broad, Taking Lessons from What Went Wrong, N.Y. Times, July 20, 2010, at D1 (calling the incident the “worst offshore oil spill in United States history”); John M. Broder, Panel Points to Errors in Gulf Spill: Fatal Oil Well Explosion Was Avoidable, Report Says, N.Y. Times, Jan. 6, 2011, at A14 (referring to the event as a “blowout and oil spill”).

9 See Webster’s Third New International Dictionary 643 (1986) (defining disas-ter as “a sudden calamitous event producing great material damage, loss, or distress”).

10 See Louise K. Comfort, Risk, Security, and Disaster Management, 8 Ann. Rev. Pol. Sci. 335, 338 (2005); N. Pidgeon & M. O’Leary, Man-made Disasters: Why Technology and Organi-zations (Sometimes) Fail, 34 Safety Sci. 15, 15–16 (2000). Of course, the meaning of the term disaster is contested among social scientists. See G.A. Kreps, Sociological Inquiry and Disaster Research, 10 Ann. Rev. Soc. 309, 311 (1984). Kreps suggests that even when disas-ters are defined by their harm to people and the physical environment, both the causes and consequences must be viewed as related to the social structures and processes of socie-ties or communities involved in the disasters. Id. at 312.

11 Pidgeon & O’Leary, supra note 10, at 16, 18; Brian Toft & Simon Reynolds, Learning from Disasters: A Management Approach 24–25 (3d ed. 2005).

2011] Meta-Lessons from the BP Disaster 283

ing unfolding disasters.12 Additionally, as one historian of engineering grimly noted, “‘[n]obody wants failures. But you also don’t want to let a good crisis go to waste.’”13 In that spirit, this Article sketches how we might learn from this disaster, and suggests some of the obstacles to this process. There are many law and policy lessons to be learned from the BP Deepwater Horizon disaster and its aftermath.14 Part I briefly summa-rizes the most specific law and policy lessons from the disaster, and sug-gests that these are the lessons we are most likely to identify.15 However, the extent to which this learning will affect regulatory decision making is still not certain. Part II focuses on three meta-lessons that are perhaps even more important than narrow, specific lessons from the BP disas-ter.16 Meta-lessons are lessons about how to learn: in this case, how to learn from any disaster. They require a look beyond the confines of the facts unique to a specific event to identify pervasive patterns in the law and policy framework that increase the risk of disaster. The Article identifies some major obstacles to learning these broader lessons, and concludes that despite their importance, it is unlikely such lessons will inform future decisions.17 These meta-lessons can be summarized as follows. First, it is crucial to anticipate the next possible disaster, not merely seek to avoid repeat-ing the most recent one. This Article suggests how such an approach would differ from the current path of reactive reform, the value of a new approach, and why the United States is unlikely to pursue this path.18 Second, it is necessary to identify not just specific types of disas-ters that may occur in the future, but the blueprint or architecture for this and other similar disasters—the economic, political, and regulatory context that facilitated the cascading errors that produced the disaster. I draw on a concept that Professor Rena Steinzor has elaborated in her work—the idea of hollow government—to describe the blueprint for

12 See Pidgeon & O’Leary, supra note 10, at 16. 13 See Broad, supra note 8 (quoting Duke University Professor Henry Petroski, a histo-

rian of engineering and author of the 2006 book Success Through Failure). 14 This Article focuses on the events leading up to the blowout and the efforts to con-

tain the gushing well, but not on the other failures that occurred in the spill response and clean up effort. Thus, I use the term disaster to refer to the causes and consequences of the blowout and the inability to staunch the gushing oil for three months.

15 See infra Part I. 16 See infra Part II.A–.C. 17 See infra Parts II.A–.C, Conclusion. 18 See infra Part II.A.


these disasters and the remedy.19 Although hollow government repre-sents a pervasive and fundamental source of risk to health, safety, and the environment, Part II.B describes powerful forces that make it unlikely that the government will address this fundamental problem.20 Finally, the Article suggests that the broader policy context of the na-tional energy policy is a third important focus for learning. 21 The Arti-cle concludes with some suggestions why it is unlikely that this disaster will serve as an impetus for government and industry to learn these meta-lessons.

I. Narrow Lessons from the BP Disaster

Many of the lessons specific to the BP oil well blowout are lessons about technological and regulatory failures that contributed directly to the BP disaster and are largely uncontested. In the wake of the blowout, certain technical failures became rapidly apparent: the blowout pre-venter (BOP), a critical safety component designed to shut off the well in the event of an imminent blowout, failed to operate properly.22 The numerous investigations undertaken in the wake of the spill23 have con-firmed this and have provided ever greater detail on the inadequacies in the design of the specific BOP used, the possible causes of its failure,24

19 Rena I. Steinzor, Mother Earth and Uncle Sam: How Pollution and Hollow Government Hurt Our Kids 44 (2008).

20 See infra Part II.B. 21 See infra Part II.C. 22 See BP Commission Report, supra note 1, at 114–15. 23 Numerous hearings were held by congressional committees throughout the summer

of 2010. See Energy and Commerce Committee Investigates Deepwater Horizon Rig Oil Spill, Comm. on Energy & Commerce Democrats ( July 15, 2010), http://democrats.energycommerce. house.gov/index.php?q=news/energy-commerce-committee-investigates-deepwater-horizon-rig-oil-spill. In addition, the executive branch initiated several investigations. See, e.g., BP Commission Report, supra note 1, at vi; Outer Cont’l Shelf Safety Oversight Bd., U.S. Dep’t of the Interior, Report to Secretary of the Interior Ken Salazar 1 (2010) [hereinafter Interior OCS Safety Report], available at http://www.doi.gov/news/press releases/loader.cfm?csModule=security/getfile&PageID=43677. A report of the Minerals Management Service (MMS) and Coast Guard joint investigation is also anticipated in 2011. Deepwater Horizon Joint Investigation Official Site FAQ, Deepwater Horizon Joint Investiga-tion, http://www.deepwaterinvestigation.com/go/page/3043/47459/ (last visited Apr. 15, 2011). In addition to these investigations, ongoing tort litigation will likely reveal additional facts regarding the specific causes of the blowout. See John Schwartz, First the Spill, Then the Law Suits, N.Y. Times, June 11, 2010, at A14.

24 For example, the BOP lacked a second blind shear ram as a backup, something that could have been installed on the Deepwater Horizon’s BOP, but was not. David Barstow et. al., Regulators Failed to Address Risk in Oil Rig Fail-Safe Device, N.Y. Times, June 21, 2010, at A1. The BOP also did not have a remote or acoustic trigger—devices that would have per-mitted the crew to trigger the device even after the explosion and evacuation of the rig.


and the role of the casing and cementing practices in the failure.25 In addition, a series of operational decisions by BP and its contractors that compromised safety have come under increasing scrutiny.26 Although this Article’s primary focus is on law and policy lessons, it is important to note that these highly visible and concrete failures will likely lead industry to respond voluntarily by adopting some practices and procedures to avoid similar failures.27 From a law and governance perspective, however, simply allowing industry to learn voluntarily and police itself is widely viewed as inadequate for several reasons.28 Indeed, the regulatory environment that existed at the time of the blowout re- These acoustic triggers are required in Brazil and Norway and used by some oil companies even when not required by state authorities. See Russell Gold, Ben Casselman & Guy Chazan, Leaking Oil Well Lacked Safeguard Device, Wall St. J., Apr. 29, 2010, at A1. When U.S. regulators considered requiring acoustic triggers, industry opposed them citing their unreliability. Id. Officials in Norway suggest they have been effective. Id. Ultimately MMS declined to require them, citing their expense. Id.

25 See Ben Casselman & Russell Gold, Unusual Decisions Set Stage for BP Disaster, Wall St. J., May 27, 2010, at A1; Letter from Fred H. Bartlit, Jr. et al., to Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling (Oct. 28, 2010), available at http:// graphics8.nytimes.com/packages/pdf/science/spilldoc.PDF; Letter from Henry A. Wax-man & Bart Stupak, House of Representatives Comm. on Energy & Commerce, to Tony Hay-ward, CEO, BP 1–2 (June 14, 2010), available at http://democrats.energycommerce.house.gov/ documents/20100614/Hayward.BP.2010.6.14.pdf.

26 The National Commission on the BP Deepwater Oil Spill and Offshore Drilling’s (“the Oil Spill Commission”) preliminary discussion of whether BP cut corners to save time and money sparked debate on that issue. Compare John M. Broder, Investigator Finds No Evidence That BP Took Shortcuts to Save Money, N.Y. Times, Nov. 9, 2010, at A16 (noting conclusions of Commission investigator Fred H. Bartlit, Jr.), with Ayesha Rascoe, Serious Errors, Complacency Preceded U.S. Spill—Panel, Reuters, Nov. 9, 2010, available at http://www.reuters.com/article/idUSN0928572720101109 (noting comments by the Oil Spill Commission’s co-chairs that “the panel’s investigators did not find evidence that indi-vidual workers sacrificed safety over monetary concerns, but that does not mean that the companies involved placed enough emphasis on safety”). The Oil Spill Commission’s Final Report notes that many decisions made by BP and its contractors that saved the companies significant time and money also increased the risk of a blowout. BP Commission Report, supra note 1, at 125.

27 See Clifford Krauss, Shell Presses for Drilling in Arctic, N.Y. Times, Nov. 6, 2010, at B1. Shell’s vice president for Alaska, in explaining why Shell believes it should be allowed to drill in the Arctic and that its response plan is adequate, said, “[w]e’re not a tone-deaf company . . . . We’ve really got to be compelling in what we are doing.” Id. Shell’s response includes an upgrade of its rig’s blowout preventer, a subsea containment system, and a rig at the ready to drill a relief well. Id.; see also Press Release, Chevron, New Oil Spill Con-tainment System to Protect Gulf of Mexico Planned by Major Oil Companies ( July 21, 2010), available at http://www.chevron.com/chevron/pressreleases/article/07212010_new oil spillcontainmentsystemtoprotectgulfofmexicoplannedbymajoroilcompanies.news.

28 See BP Commission Report, supra note 1, at 234–35; Alyson Flournoy et al., Ctr. for Progressive Reform, White Paper No. 1007, Regulatory Blowout: How Regula-tory Failures Made the BP Disaster Possible, and How the System Can be Fixed to Avoid a Recurrence 1–3, 13 (2010).


lied heavily on industry self-regulation.29 Investigation in the wake of the blowout has revealed that the Outer Continental Shelf Lands Act (OCSLA)—the law governing development of federally owned oil and gas resources on the Outer Continental Shelf—included few standards to assure protection of health, safety, and the environment.30 Addition-ally, the Minerals Management Service’s (MMS) approach to regulation under the OCSLA relied heavily on standards developed by and volun-tarily agreed to by industry.31 Of course, even with this weak regulatory regime, the threat of tort liability should have provided industry with an incentive to take steps to avoid catastrophic risk.32 However, it seems clear from most accounts that BP and its contractors failed to accurately assess the severity of the risks they faced.33 Thus, relying on industry, market forces, and the tort liability system to deter similar conduct seems unwarranted and an abdication of government’s role in protect-ing health, safety, and the environment. Both Congress and the Obama Administration showed initial in-terest in and took action to promote relevant reforms. Congress held extensive hearings and considered reforms to the OCSLA that would have: imposed more rigorous standards for BOPs; tightened standards for review of the risks associated with exploration plans and drilling permits; improved technical capacity for the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), the successor agency to MMS; enabled better monitoring and enforcement of exist-ing law; and provided greater consideration of environmental im-

29 Flournoy et al., supra note 28, at 1–3, 13. 30 Id. 31 Id. at 12–20. 32 See generally Alyson Flournoy, et. al., Ctr. for Progressive Reform, White Pa-

per No. 1101, The BP Catastrophe: When Hobbled Law and Hollow Regulation Leave Americans Unprotected (2011), available at http://www.progressivereform.org/ articles/BP_Catastrophe_1101.pdf (pointing to other factors that have blunted the effects of tort law and regulatory disincentives for risky or reckless behavior). Moreover, the use of dispersants may literally and figuratively dilute the force of potential tort and statutory liability by making natural resource damages extremely difficult, if not impossible, to as-sess. See generally Mark Schleifstein, Dispersant Was in Deepwater Oil Plume for 2 Months After BP’s Gulf Well Was Capped, Study Shows, Times-Picyaune, Jan. 27, 2011, http://www.nola.com/ news/gulf-oil-spill/index.ssf/2011/01/study_shows_dispersant_in_deep.html.

33 See Broder, supra note 26 (noting the numerous flaws and errors that contributed to the disaster). “‘The interesting question is why these experienced men out on that rig talked themselves into believing that this was a good test that indicated well integrity,’ said Sean Grimsley, one of Mr. Bartlit’s deputies. ‘None of them wanted to die or jeopardize their safety. The question is why.’” Id. Possible explanations for this type of misperception of risk are discussed at infra Part II.A.


pacts.34 A bill known as the Consolidated Land Energy and Aquatic Re-sources (CLEAR) Act that incorporated these reforms passed the House of Representatives; however, it stalled in the Senate and will cer-tainly not be revived in the current Congress.35 Within the executive branch, BOEMRE has undertaken regulatory reform initiatives.36 The agency has promulgated regulations, including one designed to address drilling safety, and a workplace safety rule re-quiring development of a Safety and Environmental Management Sys-tem, and has created an Ocean Energy Safety Advisory Committee.37 These regulatory reforms, like the proposed legislative reforms, are closely connected to the events that led to the blowout, and rather nar-rowly focused.38 They illustrate that the executive branch, at least, is attempting to actively learn some of the obvious lessons that emerge from the specific facts leading up to the disaster.39 In addition to reforms to regulatory standards, early administrative and legislative proposals also focused on institutional flaws in the struc-ture and culture of MMS that produced lax agency oversight of BP. A series of reports and accounts has documented a relationship in which MMS was dependent on industry, invested in promotion of drilling, and a reluctant regulator.40 In response, the Department of the Interior

34 Consolidated Land, Energy, and Aquatic Resources Act of 2010, H.R. 3534, 111th Cong. §§ 102(e)(4)–(5), 205(a)(8), 208(b)–(e), 212 (2010).

35 Id.; Bill Summary & Status 111th Congress (2009–2010) H.R. 3534, Libr. of Congress, Thomas, http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.03534: (last visited Apr. 15, 2011) (noting last major action was placement on Senate Legislative Calendar on August 4, 2010); Matthew Jaffe and John R. Parkinson, BP Gulf Oil Spill 1-Year Anniversary; Congress Yet to Pass Any Major Laws on Oil and Gas Drilling, ABC News, April 20, 2011, http://abcnews. go.com/Politics/bp-gulf-oil-spill-year-anniversary-congressional-inaction/story?id=13419389.

36 See Interior OCS Safety Report, supra note 23, at 1–2. 37 See Bureau of Ocean Energy Mgmt., Regulation & Enforcement (BOEMRE),

Fact Sheet: The Drilling Safety Rule 1–2 [hereinafter Drilling Safety], available at http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&PageID=45792; BOEMRE, Fact Sheet: Workplace Safety Rule 1–2 [hereinafter Workplace Safety], available at http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/ getfile&PageID=45791; BOEMRE, Regulation & Enforcement, Ocean Energy Safety Advisory Committee Charter 1, available at http://www.boemre.gov/mmab/PDF/Com- mitteeCharter.pdf.

38 See Drilling Safety, supra note 37, at 2; Workplace Safety, supra note 37, at 1. 39 See Drilling Safety, supra note 37, at 1; Workplace Safety, supra note 37, at 1. I

use the term active learning as it is employed by Brian Toft and Simon Reynolds in Learn-ing from Disasters: A Management Approach, to refer to learning where lessons are put into practice, as distinguished from passive learning, where knowledge is gained but no reme-dial action occurs. Toft & Reynolds, supra note 11, at 66.

40 See Interior OCS Safety Report, supra note 23, at 11, 68; Office of the Inspector Gen., U.S. Dep’t of Interior, Investigative Report: Island Operating Company et al. 3 (2010), available at http://www.doioig.gov/images/stories/reports/pdf/IslandOper-


has changed the leadership, structure, and name of MMS, and rein-forced ethical standards for its employees.41 These steps were designed to change the culture within the agency and to eliminate conflicts of interest that had permeated MMS. The conflicts were the inevitable result of the agency’s role in promoting oil and gas leasing and collect-ing revenues on the one hand, while acting as regulator and enforcer, on the other. By separating these functions, assigning new leadership, and re-branding the agency, Secretary Salazar has clearly sought to change the agency’s relationship with industry.42 Interior has the power, and appears to have the will, to address the most basic conflicts and ethical lapses, making it likely these narrow lessons will be learned.

All of these lessons are important and the Administration’s re-sponses are a positive sign. However, they are specific lessons of the Deepwater Horizon disaster, just as double hulls and the need for statu-tory liability were lessons specific to the Exxon Valdez.43 Reforms based on these lessons made a repeat of the Exxon Valdez disaster less likely, but did little to avoid the BP disaster. Moreover, in light of Congress’s inaction and its apparent loss of interest in reform, it is not certain that even the specific lessons of the BP disaster will be learned. The CLEAR Act languished in the Senate after criticism by the oil industry and its supporters in Congress that it was overly broad.44 And the National Commission on the BP Deepwater Oil Spill and Offshore Drilling’s (the “Oil Spill Commission”) detailed recommendations in its final re-

atingCo.pdf; U.S. Gov’t Accountability Office, GAO-10-313, Oil and Gas Manage-ment: Interior’s Oil and Gas Production Verification Efforts Do Not Provide Reasonable Assurance of Accurate Measurement of Production Volumes 1–3 (2010), available at http://www.gao.gov/new.items/d10313.pdf.

41 Interior OCS Safety Report, supra note 23, at 1–2. 42 See U.S. Sec’y of the Interior, Order No. 3299, Establishment of the Bureau of Ocean

Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue (May 19, 2010), available at http://www.eenews.net/public/25/ 15769/features/documents/2010/05/19/document_pm_03.pdf; Noelle Straub, Interior Unveils Plans to Split MMS into 3 Agencies, N.Y. Times, May 20, 2010, http://www.nytimes. com/gwire/2010/05/20/20greenwire-interior-unveils-plan-to-split-mms-into-3-agen-72654. html.

43 Gail Counsell, Heading for Rougher Water: Unlimited Liability for Accidents in the US Will Worsen the Plight of the World’s Tanker Operators, Writes Gail Counsell, Independent (London), Jan. 10, 1993, http://www.independent.co.uk/arts-entertainment/heading-for-rougher-water-unlimited-liability-for-accidents-in-the-us-will-worsen-the-plight-of-the-worlds-tanker-operators-writes-gail-counsell-1477738.html; John H. Chusman Jr., Oil Spill Compromise Calls for Double Hulls, N.Y. Times, July 13, 1990, available at http://query.nytimes.com/gst/fullpage.html? res=9C0CE7DC1338F930A25754C0A966958260&scp=1&sq=double%20hulls&st=cse.

44 See e.g., Press Release, Cathy Landry, American Petroleum Institute, House Re-sources Bill Threatens American Jobs, Economy ( July 15, 2010), available at http://new. api.org/Newsroom/hrbilljobseconomy.cfm.


port have failed to generate any significant response by Congress or industry.

II. Meta-Lessons: Lessons to Learn Beyond the BP Disaster

Even if government and industry were to learn all they could from the specifics of this disaster, this Article suggests three important broader lessons that this disaster should teach that are likely to remain unlearned. I call these meta-lessons because they are lessons about how we need to learn from this and other disasters, not just what we need to learn. This learning would require a look beyond the specific facts that proximately caused the disaster. The three meta-lessons are to endeavor to: (1) learn from the next disaster; (2) learn from the blueprint of the disaster; and (3) learn from the context of the disaster.

A. How to Learn from the Next Disaster: Law and Regulatory Reform to Prevent a Future Disaster

The first lesson is not simply to react to the current disaster, but to think about the next one. Legislative reform in the wake of disaster in-evitably and appropriately must begin from the contours of the imme-diate problem. Indeed, it is hard enough to determine how to prevent identical mistakes from happening in the future, and virtually impossi-ble to predict the precise contours of the next tragedy that may occur. Yet, reactive reform that focuses only on the facts of the BP disaster leaves us vulnerable to future incidents that result from similar cracks, foundational and otherwise, in the U.S. law and policy structure. This Article suggests that adaptive learning can help spot relevant patterns and more likely avoid a series of painful and costly mistakes.45 As noted above, in the wake of the BP disaster, it took little time for officials, industry, and the public to conclude that the risks inherent in the lax regulation of BOPs created an obvious and unacceptable catas-trophic risk.46 However, an exclusive focus on the specific facts and technical dimensions of the BP disaster may overlook underlying pre-

45 There is debate among social scientists on the value of organizational learning. Those who adopt High Reliability Theory believe that organizations can contribute signifi-cantly to preventing accidents, whereas those who propound Normal Accident Theory—which posits that accidents are inevitable in complex, tightly coupled systems—see less value in learning. See Jos A. Rijpma, Complexity, Tight-Coupling and Reliability: Connecting Normal Accidents Theory and High Reliability Theory, 5 J. Contingencies & Crisis Mgmt. 15, 15 (1997) (suggesting the two theories are not always in conflict and both posit some role for learning).

46 See BP Commission Report, supra note 1, at 114–15.


conditions that made the series of errors, bad judgments, and technical failures more likely. Social scientists who study human-caused disasters emphasize that disasters cannot be understood purely in technical terms.47 Rather, disasters arise from an interaction between technologi-cal and organizational system failings.48 There is much to learn about preventing disasters from the work of social scientists who study the causes of disaster and how organizations can learn from disasters. There are various theoretical approaches and lessons, but many common threads. Much of this work builds on Barry Turner’s “man-made disasters” model, which posits that disasters result from “an interaction between the human and organizational arrange-ments of the socio-technical systems set up to manage complex and ill-structured risk problems.”49 This disaster model highlights the role played by “a discrepancy between some deteriorating but ill-structured state of affairs and the culturally ‘taken for granted’: or more specifically the cultural norms, assumptions and beliefs adopted by an organization or industry for dealing with hazard and danger.”50 In the aftermath of the BP disaster, this suggests a line of inquiry well beyond reforms to mandate better BOPs and offers lessons both for industry and governance learning. The facts revealed to date suggest that both MMS and industry routinely underestimated risks and failed to heed warning signals.51 Turner and his successors emphasize this as a common feature of disasters. Turner coined the term disaster “incuba-tion period” to describe “the accumulation of an unnoticed set of events which are at odds with the accepted beliefs about hazards and the norms for their avoidance.”52 During this period, a “build-up of latent errors and events, at odds with the culturally taken for granted, is ac-companied by a collective failure of organizational cognition and ‘intel-ligence.’”53 This account seems consistent with the conclusions of the Oil Spill Commission and suggests the value of understanding how these failures occur.54

47 See Pidgeon & O’Leary, supra note 10, at 16. 48 See id.; see also Diane Vaughan, Autonomy, Interdependence, and Social Control: NASA and

the Space Shuttle Challenger, 35 Admin. Sci. Q. 225, 225–26 (1990) (analyzing the role of organizational failures in the Challenger disaster).

49 Pidgeon & O’Leary, supra note 10, at 16. 50 Id. at 18 (describing Turner’s model). 51 See BP Commission Report, supra note 1, at 89–127. 52 Barry Turner, Man-Made Disasters, 85 tbl.5.1 (1978). 53 Pidgeon & O’Leary, supra note 10, at 17; see Broder, supra note 26. 54 See BP Commission Report, supra note 1, at 115–27, 223–24.


In their book, Learning from Disasters, Brian Toft and Simon Rey-nolds describe a variety of “socio-psychological pathologies that can af-fect one’s ability to perceive the world appropriately.”55 First, contrary to popular assumptions, risk is a subjective and not an objective concept.56 It is defined by social and individual reference schemes.57 Therefore, judgment and values affect individual perception of risk.58 Decision makers may also be overconfident because they expunge potentially dangerous events from their minds and thus fail to anticipate them ac-curately.59 Socio-psychological phenomena can similarly prevent learning from mistakes after a disaster. There is some evidence that people pre-fer to learn from the potential confirmation of their own hypothesis, rather than by eliminating hypotheses.60 The desire to seek out evi-dence confirming one’s own hypothesis, while failing to accept chal-lenges to it, can make it difficult for people and organizations to learn from their mistakes.61 Additionally, the concept of hindsight bias may incline those seeking to learn from others’ mistakes to be overly confi-dent that they could have avoided the same error.62 And the group-think phenomenon, described by Professor Irving Janis, leads to the “development of group norms that bolster morale at the expense of critical thinking.”63 This can impair the ability of individuals within an organization to make sound judgments by creating a sense of compul-sion to avoid questioning the view of the majority.64 Foresight is inevitably limited. Hence, to address some of these human and organizational patterns, Pidgeon and O’Leary suggest that organizations should engage in “safety imagination.”65 Safety imagina-tion is essential to ensure that “understanding and analysis of events . . . not become overly fixed within prescribed patterns of thinking . . . .”66 To develop a critical and self-reflective process, these authors suggest that organizations must: extend the scope of potential scenarios that

55 Toft & Reynolds, supra note 11, 1–9. 56 See id. at 2. 57 Id. 58 See id. 59 Id. at 4. 60 Id. at 4–5. 61 Toft & Reynolds, supra note 11, at 4. 62 Id. at 5–6. 63 Id. at 6. 64 Id. at 7–8. 65 Pidgeon & O’Leary, supra note 10, at 22. 66 Id.


are considered relevant; counter complacency; recognize that ill-structured hazards are, by definition, accompanied by uncertainty; and step beyond institutional or cultural assumptions about hazards and their consequences.67 A common recommendation for organizational reform is to en-hance institutional resilience.68 Building resilience demands that an organization develop a process of continual inquiry and adaptive learn-ing,69 and a culture of effective communications.70 A number of schol-ars emphasize the importance of a safety culture and point to organiza-tional learning as a key to developing a safety culture, themes also developed in the Oil Spill Commission’s final report.71 The report of the Outer Continental Shelf Safety Oversight Board shows signs of recognizing the importance of an agency “culture of safety in which protecting human life and preventing environmental disasters are the highest priority, with the goal of making leasing and production safer and more sustainable.”72 However, this description of a “culture of safety” suggests a more limited undertaking than does the term safety culture. A “culture of safety” may simply mean prioritizing safety, rather than a more fundamental transformation of agency cul-ture and procedures to incorporate adaptive learning. Scholars caution against trying to create administrative control as the sole response to disaster.73 In other words, while better standards and enforcement for BOPs and cement casings are needed,74 relying on improved standards alone will not help prevent future disasters most effectively. A culture that promotes imaginative thinking and adaptive responses is also needed. Whether BOEMRE will create this type of safety culture re-mains to be seen. The challenge of developing policies to promote such

67 Id. at 23; see also Toft & Reynolds, supra note 11, at 9. 68 See Pidgeon & O’Leary, supra note 10, at 17; Nick Pidgeon, The Limits to Safety? Cul-

ture, Politics, Learning and Man-Made Disasters, 5 J. Contingencies & Crisis Mgmt. 1, 1 (1997).

69 See Comfort, supra note 10, at 344–47; Pidgeon & O’Leary, supra note 10, at 18. 70 See Pidgeon & O’Leary, supra note 10, at 18. 71 See Toft & Reynolds, supra note 11, at 25–26; Barry A. Turner, The Development of A

Safety Culture, 7 Chemistry & Industry 241, 241–44 (1991); Pidgeon & O’Leary, supra note 10, at 27; BP Commission Report, supra note 1, at 224–29.

72 Interior OCS Safety Report, supra note 23, at 7 (describing the purpose of a broad safety culture program: “to create and maintain industry, worker, and regulator awareness of, and commitment to, measures that will achieve human safety and environmental pro-tection, and to make sure that where industry fails, BOEMRE will respond with strong enforcement authorities”).

73 See Comfort, supra note 10, at 344. 74 See BP Commission Report, supra note 1, at 152.


a culture within industry is significant. Creating such a culture requires a commitment to a long-term process of organizational learning.75 Another important dimension of learning from disasters is the need for learning to extend beyond the organizations directly involved. Toft and Reynolds emphasize that organizations need to engage not just in organization-specific learning, but also in isomorphic learning— that is, learning from “occasions on which organizations or their sub-units, whether engaged in disparate enterprises or not, exhibit similar patterns of behavior.”76 Building networks of organizations and paying careful attention to the flow of information among them is also important.77 Because the ability to learn from mistakes depends on organizational ability to en-gage in meaningful critique of past performance, eliminating disincen-tives to sharing key information is a central focus for improving organi-zations’ response to disasters.78 Pidgeon and O’Leary suggest strategies for overcoming these barriers, drawing on the experience of aviation incident and event monitoring in Great Britain. Their analysis high-lights the importance of identifying “how a reporting or monitoring system can be successfully embedded within the local social and politi-cal contexts.”79 Designing these systems to create strong incentives for reporting, while still providing for accountability and responsibility, is a critical goal. Key decisions include: who has access to the information, whether reporting will be anonymous or confidential, what categories of errors are covered, the standards of error that may trigger discipli-nary or other sanctions, when confidentiality can be overridden, and

75 Toft & Reynolds, supra note 11, at 29. The Commission called for “the oil and gas

industry’s internal reinvention: sweeping reforms that accomplish no less than a funda-mental transformation of its safety culture.” BP Commission Report, supra note 1, at 217. The Commission provided valuable information to enable such a transformation, drawing on the experiences of the nuclear energy and aviation industries and the Navy’s nuclear submarine program. Id. at 229–39. However, there is no sign to date that industry has taken meaningful action in this direction.

76 See Toft & Reynolds, supra note 11, at 68, 72–75. 77 See BP Commission Report, supra note 1, at 123–24; Comfort, supra note 10, at 344,

348–49. 78 See Pidgeon & O’Leary, supra note 10, at 19–24; see also Mary Jane Angelo, Stumbling

Toward Success: A Story of Adaptive Law and Ecological Resilience, 87 Neb. L. Rev. 950 (2009). Angelo’s case study of the massive pesticide release caused by an agency’s restoration pro-ject at Lake Apopka, Florida, provides a positive example where various factors led the agency to admit mistakes and pursue an adaptive strategy. Id. at 966–70, 994–96. However, the case study also highlights challenges, and the pressures on agencies not to admit fail-ure. Id.

79 See BP Commission Report, supra note 1, at 254; Pidgeon & O’Leary, supra note 10, at 24.


what steps will be taken to correct deficiencies that are identified.80 Pidgeon and O’Leary emphasize the importance of trust relationships in designing information sharing and reporting systems.81 Secretary Salazar has suggested creating an Ocean Energy Safety Institute in the Department of the Interior, drawing on expertise from the Department of Energy and the Coast Guard, as well as academic experts.82 Additionally, the Commission and Outer Continental Shelf Safety Oversight Board have conducted wide-ranging interviews with experts and agency personnel. These efforts could help to identify the existing structures, patterns, and norms in federal oversight agencies and industry, and help to inform a more systematic effort to create a safety culture. Unfortunately, all the reform efforts to date appear to remain fairly tightly focused on the BP disaster itself. The Oil Spill Commission makes important broader recommendations to promote ongoing learning, including creation of an independent industry-wide safety organization to supplement government regulation and broader administrative and legislative reforms.83 However, as noted above, nei-ther Congress nor industry seems engaged by these overtures. Reform that is focused on how to learn better from disasters in the future is needed. This task is in many ways more challenging than thinking about specific reforms, and lacks the urgency and salience of the narrower responses. Such learning demands more nuanced study and analysis of how communication occurs among the relevant agen-cies and industry, the incentives for individuals to report accidents and near misses, and how decisions are made through the chain of com-mand. Acting on this broader challenge also requires more fundamen-tal changes in agency behavior and procedures than do narrower re-forms. Its benefits are more diffuse and less likely to attract public notice and reinforcement, not to mention funding from Congress. Thus, it seems very possible that this disaster will pass without learning of this sort. However, as the country reels from a sequence of events including 9/11, Hurricane Katrina, the financial crisis, and the BP dis-

80 Pidgeon & O’Leary, supra note 10, at 25. The authors note that when the Federal

Aviation Administration gave pilots immunity from prosecution for voluntary reporting of air-miss reports in 1968, the number of reports almost tripled. Id. When the immunity guarantee was subsequently revoked in 1971, reportings dropped back below pre-1968 levels. Id.

81 Id. at 24–25. 82 Press Release, U.S. Dep’t of the Interior, Salazar Proposes Ocean Energy Safety Insti-

tute (Nov. 2, 2010), http://www.doi.gov/news/pressreleases/Salazar-Proposes-Ocean-Energy-Safety-Institute.cfm.

83 BP Commission Report, supra note 1, at 215–65.


aster in the space of a decade, we would be wise to develop better ca-pacity within agencies to reduce the risk of disasters by learning about how to learn from them.

B. How To Learn from the Blueprint of the Disaster: Hollow Government

Beyond building agency and industry capacity to avoid and learn from disasters, a second way to learn from the BP disaster is to step back and look at its political, regulatory, and economic context. With a step back, one can see a blueprint not only for this disaster, but other crises as well. This blueprint for disaster is what Professor Rena Steinzor has called “hollow government” —government that has been stripped of the resources, authority, and respect it needs in order to effectively pro-tect public health, safety, and the environment.84 Think of a pumpkin that has been hollowed out, the flesh and seeds cut out, leaving only an empty shell. Too many of the agencies that the public relies on to pro-tect it have been similarly gutted—the result of two decades of deregu-latory policies and an ideology that prizes small government over good government.85 This ideology has held sway only by maintaining the illu-sion that the country can always cut taxes more and still have adequate services.86 The 2010 elections and extension of the Bush tax cuts sug-gest that this ideology and illusion continue to dominate, perhaps with greater force than ever.87 In their paper, Regulatory Dysfunction: How Insufficient Resources, Outdated Laws, and Political Interference Cripple the Protector Agencies, the authors identify the causes of hollow government and the steps needed to remedy it.88 Their analysis highlights outdated authorizing statutes, severe shortfalls in funding, and political interference as three major factors in hollow government;89 all conditions that characterized the regulation of oil drilling on the Outer Continental Shelf (OCS).

84 See Steinzor, supra note 19, at 21–23, 44; see also Sidney Shapiro, Rena Steinzor &

Matthew Shudtz, Ctr. for Progressive Reform, White Paper No. 906, Regulatory Dysfunction: How Insufficient Resources, Outdated Laws, and Political Inter-ference Cripple the ‘Protector Agencies’ 5 (2009).

85 See Shapiro, Steinzor & Shudz, supra note 84, at 3–5 (documenting this phe-nomenon in numerous federal agencies, including FDA and EPA, among others); BP Commission Report, supra note 1, at 72–76.

86 See Shapiro et al., supra note 84, at 5–7. 87 See Peter Baker, With New Tax Bill, a Turning Point for the President, N.Y. Times, Dec.

18, 2010, at A13. 88 See Shapiro, Steinzor & Shudz, supra note 84, at 5, 17–19. 89 Id. at 6, 9, 12.


1. Outdated Authorizing Statutes

Following the Macondo well blowout, the OCSLA came under close public scrutiny for the first time in decades. The lack of meaning-ful mandates to protect human health, safety, and the environment were glaringly apparent in the wake of the disaster. The OCSLA was enacted to promote and provide a framework for exploitation of the federal oil and gas resources on the OCS.90 Although its section on policies mentions environment and safety,91 the statute contains few mandates for meaningful protection of these values.92 Similarly, the procedures for environmental review fail to provide an effective frame-work for analyzing the risks of OCS oil exploration and drilling.93 The statute’s penalty provisions are extremely modest and, despite statuto-rily mandated adjustments for inflation, remain at a level unlikely to deter risky conduct.94 In 1995, Congress passed amendments to the OCSLA to provide greater incentives for deepwater drilling.95 Yet, it failed at that time to revisit the safety and environmental protections of the OCSLA to take account of the dramatic shift from shallow to deep-water drilling, and the ongoing move towards ultra-deepwater drill-ing.96 The result is an agency whose mandate is out of date and fails to take adequate account of public safety, health, and the environment.

90 Outer Continental Shelf Lands Act, ch. 345, 67 Stat. 462 (1953) (codified as amended at 43 U.S.C. §§ 1331–1356a (2006)) (stating that the purpose of the Act is “to provide for the jurisdiction of the United States over the submerged lands of the outer Continental Shelf, and to authorize the Secretary of the Interior to lease such lands for certain purposes.”)

91 See 43 U.S.C. § 1332(5)–(6). 92 See Flournoy et al., supra note 28, at 12–20 (discussing the provisions in the OCSLA,

their shortcomings, and recommendations for reform). 93 See id. at 16–19. 94 See Interior OCS Safety Report, supra note 23, at 18. The current maximum pen-

alty for violations is $35,000 per day. See 43 U.S.C. § 1350; 30 CFR § 250.1403 (2010). Forty-one percent of BOEMRE employees responding to a survey by the Outer Continental Shelf Safety Oversight Board believed these sanctions were not an effective deterrent in an environment where operators pay between $500,000 and $1,000,000 per day to operate a facility. Interior OCS Safety Report, supra note 23, at 18.

95 Outer Continental Shelf Lands Act, Pub. L. No. 104-58, §§ 301–306, 109 Stat. 557 (1995) (enacted as amended 43 U.S.C. § 1337).

96 See A Brief History of Offshore Oil Drilling 7–12 (Nat’l Comm’n. on the BP Deepwater Ho-rizon Oil Spill & Offshore Drilling, Working Paper No. 1, 2010), available at http://www. oilspillcommission.gov/document/brief-history-offshore-oil-drilling (documenting the rapid and ongoing shift towards deeper water); Edmund L. Andrews, U.S. Royalty Plan to Give Wind-fall to Oil Companies, N.Y. Times, Feb. 14, 2006, at A1. Between 1985 and 2009, the number of deepwater wells increased from sixty-five to more than 600. The Role of the Interior Department in the Deepwater Horizon Disaster: Before the Subcomm. on Oversight and Investigations of the H. Comm. on Energy and Commerce, 111th Cong. (2010) (opening statement of Rep. Bart Stupak), avail-


2. Inadequate Funding

Repeated reports have documented how inadequate resources prevented MMS from effectively regulating offshore oil exploration and drilling. First, MMS, and now BOEMRE, have lacked adequate staff to perform meaningful inspections. Although OCS leasing increased by 200% between 1982 and 2007, during the same time MMS staffing re-sources decreased by 36%.97 Inspections are infrequent, rarely unan-nounced, and can consist almost entirely of verifying paperwork.98 In-spectors are hampered in issuing citations by the lack of such basic equipment as laptops.99 The Department of the Interior Inspector General and the Outer Continental Shelf Safety Oversight Board documented how lack of funding prevented MMS, and now BOEMRE, from hiring, training, and retaining staff.100 In addition, reports have consistently found that MMS lacked the technical expertise and capac-ity to develop regulations adequate to protect public health and safety and the environment. Reports by the Government Accountability Of-fice and the Department of the Interior’s Acting Inspector General characterized MMS as dependent on industry’s greater expertise with the technology of deepwater and ultra-deepwater drilling, and thus re-liant on industry’s judgment of appropriate safeguards to incorporate in regulations.101 Although MMS was charged with regulating an ex-tremely sophisticated industry, in which technology has increased the level and complexity of the monitoring and knowledge needed for ef-fective regulation, its budget remained relatively flat.102

able at http://democrats.energycommerce.house.gov/documents/20100720/Stupak.State- ment.07.20.2010.pdf.

97 Interior OCS Safety Report, supra note 23, at 13. 98 See id. at 8–9 (reporting that BOEMRE lacks a comprehensive handbook on inspec-

tions, inspectors were not required to witness operations, unannounced inspections were lacking, and some operators closed down parts of operations when inspectors arrive).

99 Id. at 15. 100 U.S. Gov’t Accountability Office, GAO-10-852T, Oil and Gas Management:

Key Elements to Consider for Providing Assurance of Effective Independent Oversight 3 (2010) [hereinafter GAO Key Elements], available at http://www.gao.gov/ new. items/d10852t.pdf; Hearing on The Deepwater Horizon Incident: Are the Minerals Manage-ment Service Regulations Doing The Job?, Before the Subcomm. on Energy and Mineral Resources of the H. Comm. on Natural Resources 111th Cong. 3 (2010) [hereinafter Kendall Statement] (Statement of Mary L. Kendall, Acting Inspector General, U.S. Dep’t of the Interior), available at http://resourcescommittee.house.gov/images/Documents/20100617/2010_06_17 _ energy/testimony_kendall.pdf.

101 GAO Key Elements, supra note 100; Kendall Statement, supra note 100 (indicating that MMS relied on industry to self report violations).

102 See Flournoy, supra note 28, at 21–23; Role of the Interior Department in the Deepwater Ho-rizon Disaster, Panel I of a Joint Hearing of the Subcomm. on Oversight and Investigations and the


Adequate funding for research and investigation is essential to permit the agency to stay ahead of changing technology—instead of relying on industry representations regarding whether technology is safe or reliable. Although critically important, the odds are low that this long-term investment will emerge from the current budget process.103

3. Political Interference

Political interference is both the third hallmark of hollow govern-ment and the force that makes it unlikely that political leaders will fo-cus on the hollow government blueprint. The wealth of the large oil companies is almost impossible to conceive. The big five oil compa-nies—BP, Chevron, Conoco Phillips, ExxonMobil, and Shell—made a combined profit of $100 billion in 2008, despite the collapse of oil prices in the fourth quarter at the onset of the global financial crisis.104 Even with the recent estimates that BP’s liability from the disaster will reach $40 billion, BP reported a $1.785 billion profit for the third quar-ter of 2010.105 This wealth is a powerful force that industry deploys to influence both the composition of the legislature and the legislation that emerges from Congress. Campaign contributions from the oil and gas industry in 2010 were reported by the Center for Responsive Politics as exceed-ing $23 million, down from the 2008 levels of over $35 million.106 The Center’s website also reports that the big five oil companies spent over $92 million on lobbying efforts in 2009, and the industry as a whole

Subcomm. on Energy and Env’t of the H. Energy and Commerce Comm. 111th Cong. (2010) (state-ment of Rep. Bart Stupak, Chairman, H. Energy and Commerce Comm.) (discussing MMS’s failure to increase the number inspectors to correspond with the increase in the number of wells).

103 Jaffe & Parkinson, supra note 35. 104 Daniel J. Weiss & Alexandra Kougentakis, Big Oil Misers, Ctr. for Am. Progress (Mar.

31, 2009), http://www.americanprogress.org/issues/2009/03/big_oil_misers.html/#2. 105 BP, Group Results: Third Quarter and Nine Months 2010, at 1, available at

http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/B/bp_third_quarter_2010_results.pdf; Julia Werdigier, BP Forms Partnership to Explore in Rus-sia, N.Y. Times, Jan. 14, 2011, at B1.

106 Ctr. for Responsive Politics, Oil & Gas: Top Contributors to Federal Candidates, Parties, and Out-side Groups, OpenSecrets, http://www.opensecrets.org/industries/contrib.php?cycle=2010&ind=E01 (last visited Apr. 15, 2011) (showing total contributions for various election cycles, including 2008 and 2010); see also Weiss & Kougentakis, supra note 104. The Center for Responsive Politics is a non-partisan, non-profit research group dedicated to tracking the influence of money in Washing-ton. See Ctr. for Responsive Politics, Mission, OpenSecrets, http://www.opensecrets.org/about/ index.php (last visited Apr. 15, 2011).


spent over $175 million.107 According to the Center, there were a total of 781 lobbyists employed by the oil and gas industry in 2009, and 744 in 2010.108 Almost two-thirds of these lobbyists had previously worked for the federal government.109 Both the oil and gas industries have op-posed, and will continue to oppose, efforts at meaningful reform, in-cluding attempts to strengthen statutes, agency rules, or the regulating agencies themselves.110 Absent meaningful campaign finance reform, it is unlikely that Congress or agencies will do more than respond to the most direct and concrete causes of the disaster. The Supreme Court’s decision in Citizens United v. Federal Election Commission, which held that corporations are entitled to the same po-litical speech rights as individuals, and invalidated campaign contribu-tion restrictions in the Bipartisan Campaign Reform Act of 2002, has increased the power of corporate interests.111 The huge increase in groups with anonymous contributors funding political advertisements in the most recent election cycle is likely a harbinger of the future.112 An incessant drumbeat for less regulation and smaller government has dominated political discourse for the last thirty years and remains stronger than ever with the push for drastic federal spending cuts.113 Regulation and government are denigrated; deregulation, small gov-ernment, and the market are praised. Hollow government is a result of this ideology, and the BP oil spill can be seen as a fruit of that anti-

107 Ctr. for Responsive Politics, Lobbying: Oil & Gas Industry Profile 2010, OpenSecrets,

http://www.opensecrets.org/lobby/indusclient.php?lname=E01&year=2010 (last visited Apr. 15, 2011).

108 Id.; Ctr. for Responsive Politics, Lobbying: Oil & Gas Industry Profile 2009, Open Secrets, http://www.opensecrets.org/lobby/indusclient.php?year=2009&lname=E01&id (last visited Apr. 15, 2011).

109 Id. The Center refers to these lobbyists as “revolvers.” See id. 110 Mike Soraghan, BP, Other Oil Companies Opposed Effort to Stiffen Environmental, Safety

Rules for Offshore Drilling, NY Times, April 27, 2010, http://www.nytimes.com/gwire/2010/ 04/27/27greenwire-bp-other-oil-companies-opposed-effort-to-stiff-38887.html.

111 See 130 S.Ct. 876, 886 (2010). 112 See Alex Kingsbury & Danielle Kurtzleben, Outside Spending Makes 2010 Elections Look

Like Presidential Races, U.S. News & World Rep. (Oct. 29, 2010), http://politics.usnews.com/ news/articles/2010/10/29/outside-spending-makes-2010-elections-look-like-presidential- races.html?PageNr=1 (noting that new rules make it more difficult to track who is contribut-ing).

113 See Carl Hulse, House Approves Republican Budget Plan to Cut Trillions, N.Y. Times, Apr. 16, 2011, at A1 (reporting that Republicans “muscled through a budget plan that pares federal spending by an estimated $5.8 trillion over the next decade” with an overall plan to “aggressively rein in spending and shrink government,” while one Democrat complained that “’[t]he House Republicans have let Tea Party zeal get the better of them, and this vote will reverberate for a long time’” (quoting Sen. Charles Shumer)).


government ideology.114 This ideology conveniently focuses on gov-ernment as the threat to the public, and ignores the power and politi-cal influence that economic interests wield, often to the detriment of public health and safety, and the environment. This in turn shields the tremendous power of corporate interests from public view and makes it unlikely that the public will uncover the reality of and threat posed by hollow government.

C. How to Learn from the Context of the Disaster: United States’ Energy Policy

A third meta-lesson from the BP Deepwater Horizon disaster is that the drilling of that particular offshore well is the result not just of private choice, but of a broader national policy on energy. MMS’s oil leasing and permitting decisions reflect executive branch decisions about the disposition of publicly owned oil and gas resources.115 BP’s decisions about exploration in that area were not made in a vacuum, but in the context of a set of laws and appropriations that create a vari-ety of incentives that affect industry’s behavior. Thus, to understand why the disaster occurred, it would be wise to look at the policy context that has produced the increasing rush to develop oil resources in deepwater, and increasingly in ultra-deepwater—areas that increase the complexity, risks, and uncertainty of drilling operations and potential accidents.116 The most visible leadership on this issue comes from statements of the Oil Spill Commission and its Co-Chair Bob Graham, who has repeatedly noted that the lack of an energy policy is an impor-tant issue related to the work of the Oil Spill Commission and one that must be addressed by the legislative and executive branches.117

114 See Greg Hitt & Stephen Power, The Gulf Oil Spill: Lawmakers Eager to Take Action,

Wall St. J., June 5, 2010, at A4; Frank Rich, Editorial, Clean the Gulf, Clean House, Clean Their Clock, N.Y. Times, June 19, 2010, at WK8.

115 See Frequently Asked Questions, Bureau Ocean Energy Mgmt., Reg. & Enforcement, http://www.boemre.gov/ooc/newweb/frequentlyaskedquestions/frequentlyaskedquestions. htm (last visited Apr. 15, 2011) (indicating that BOEMRE manages leases with regard to the Department of the Interior’s wishes).

116 See Jad Mouawad & Barry Meier, Risk-taking Rises as Oil Rigs in Gulf Drill Deeper, N.Y. Times, Aug. 30, 2010, at A1.

117 See William K. Reilly & Sen. Bob Graham, Co-Chairmen, Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling, Opening Remarks: Dec. 3 Deliberative Meet-ing (Dec. 3, 2010), available at http://www.oilspillcommission.gov/page/opening-remarks-co- chairmen-william-k-reilly-and-senator-bob-graham-dec-3-deliberative-meeting; William K. Reilly & Sen. Bob Graham, Co-Chairmen, Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling, Opening Remarks: Dec. 2 Deliberative Meeting (Dec. 2, 2010), available at http://www.oilspillcommission.gov/page/opening-remarks-co-chairmen-william-k-reilly-and-sen ator-bob-graham-dec-2-deliberative-meeting.


The current energy policy provides hefty subsidies for the highly profitable oil and gas industries to continue with their unwavering fo-cus on producing more oil and gas.118 Although some say that the United States lacks an energy policy, it is more accurate to say that our leaders don’t clearly articulate the operative energy policy. Perhaps this is because it is not a coherent one or because on close inspection it is difficult to justify in light of other stated priorities. A primary and often overlooked component of energy policy is the national policy on the privatization of public natural resources. U.S. policy is to give away its natural resources at bargain prices presumably to promote exploitation and development.119 A 2008 report by the Gov-ernment Accountability Office compared U.S. royalty rates to those of 103 other jurisdictions, and only eleven had royalty rates lower than those of the United States.120 Moreover, the Government Accountabil-ity Office has made repeated reports of problems with uncollected roy-alties and with MMS’s royalty-in-kind program that has led to underes-timation of the royalties owed.121

Another significant component of the national energy policy is tax policy that directly affects investment in oil extraction. A 2005 Congres-sional Budget Office Report showed that many capital investments for oil extraction are taxed at a rate of nine percent, which ranks among

118 See Anne C. Mulkern, Oil Industry, Green Groups Launch Dueling Ad Campaigns, N.Y.

Times, July 9, 2010, http://www.nytimes.com/gwire/2010/07/09/09greenwire-oil-industry- green-groups-launch-dueling-ad-ca-68425.html. The investments in renewable energy by the big five oil companies ranged from as little as 1% of 2008 profits for ExxonMobil a high of 7.1% of 2008 profits for BP. Weiss & Kougentakis, supra note 104.

119 See, e.g., Debra L. Donahue, Trampling the Public Trust, 37 B.C. Envtl. Aff. L. Rev. 257, 296 (2010). Not all resources are made available for development. Some resources are protected to preserve the environment that surrounds them, but these decisions are the subject of frequent challenge and reconsideration, as illustrated by the repeated debates in Congress over protection of the Arctic National Wildlife Refuge. See Bonnie Docherty, Challenging Boundaries: The Arctic National Wildlife Refuge and International Environmental Law Protection, 10 N.Y.U. Envtl. L.J. 70, 70 (2001).

120 U.S. Gov’t Accountability Office, GAO-08-691, Oil and Gas Royalties: The Federal System for Collecting Oil and Gas Revenues Needs Comprehensive Reas-sessment 11 (2008), available at http://www.gao.gov/new.items/d08691.pdf.

121 U.S. Gov’t Accountability Office, GAO-09-556T, Oil and Gas Management: Federal Oil and Gas Resource Management and Revenue Collection in Need of Stronger Oversight and Comprehensive Reassessment 2 (2009), available at http:// www.gao.gov/new.items/d09556t.pdf; U.S. Gov’t Accountability Office, GAO-09-744, Royalty-In-Kind-Program: MMS Does Not Provide Reasonable Assurance It Receives Its Share of Gas, Resulting in Millions in Forgone Revenue 6 (2009), available at http://www.gao.gov/new.items/d09744.pdf.


the lowest rates for any industry.122 Tax deductions and credits for the oil extraction industry amount to roughly $4 billion per year.123 Looked at as a whole, the current energy policy strongly encour-ages all-out exploitation of remaining domestic fossil fuel resources, and deepwater oil reserves in particular. If the public and elected offi-cials believe that the risks that produced the Macondo Well blowout are unacceptable, an energy policy that will move us towards a clean energy path is a logical response. This could include increased government support for lower carbon, lower-risk energy paths. Despite the clear political opportunity provided by the Deepwater Horizon disaster for the President and Congress to focus attention on a broad clean energy policy, there have been few signs of any significant movement in that direction.124 The CLEAR Act included provisions that would eliminate some of the royalty relief for deepwater drilling, eliminate the disastrous royalty-in-kind program, and require BOEMRE to study global royalty payments to inform U.S. royalty policy.125 These are very positive steps that would reduce the mindless incentives for deepwater drilling and the unintended windfalls to oil companies. However, that Act has languished in the Senate. Moreover, even those proposed changes fail to address the broader question of whether pol-icy should create incentives towards a cleaner energy path. In the wake of the November 2010 election, it seems highly unlikely that the Ad-ministration or Congress will have interest in this topic.126

Conclusion

There is much that can be learned from the BP Deepwater Hori-zon disaster. Unfortunately, even learning the most specific lessons has proved a contentious and uncertain process. This Article suggests first that both industry and government must fundamentally rethink their approaches to safety and develop a culture that encourages and facili-tates learning from mistakes. Second, it identifies the phenomenon of

122 Cong. Budget Office, Taxing Capital Income: Effective Rates and Approaches to Reform 7–8, 11 tbl.2 (2005), available at http://www. cbo.gov/ftpdocs/67xx/doc6792/ 10–18-Tax.pdf.

123 Mulkern, supra note 118. 124 See Hitt & Power, supra note 114; see also BP Commission Report, supra note 1, at

305 (recommending a national oil policy that will “direct the nation toward a . . . more sustainable environment”).

125 See Consolidated Land, Energy, and Aquatic Resources Act of 2010, H.R. 3534, 111th Cong. §§ 217, 206, 219 (2010).

126 See John M. Broder, Tougher Rules Urged for Offshore Drilling, N.Y. Times, Jan. 12, 2011, A12.


hollow government, characterized by government lacking the resources and authority to protect the public interest and a policy process domi-nated by powerful economic interests, as a root cause of the BP disaster and a contributing factor to other recent national disasters, including the financial crisis. Hollow government also makes it unlikely that we will learn the third meta-lesson and address the longstanding need for a coherent energy policy. These lessons could help to avert future disas-ters and better enable government to protect public health, safety, and the environment. However, absent changes to address the underlying obstacles to learning, there seems little likelihood that the lessons will be learned.

INSERTED BLANK PAGE

OIL AND FRESHWATER DON’T MIX: TRANSNATIONAL REGULATION OF

DRILLING IN THE GREAT LAKES

Noah D. Hall*

Abstract: In the wake of the Gulf oil blowout disaster, there is renewed in-terest in protecting the freshwater of the Great Lakes from the risks of oil drilling. The region has significant oil resources that would be economi-cally and technologically accessible through drilling in the Great Lakes. The Great Lakes bottomlands and shorelines are subject to the regulatory jurisdiction of two countries—the United States and Canada—and eight American states. While the existing legal regime lacks uniformity, and is characterized by jurisdictional inconsistency and potential for trans-boundary pollution externalities, oil drilling is mostly prohibited. With strong public support for protecting the Great Lakes, there is an oppor-tunity to further strengthen oil drilling regulation in the Great Lakes through international and domestic law.

Introduction: Great Lakes Freshwater and Oil Resources

The Great Lakes are the world’s largest surface freshwater system.1 With 5440 cubic miles of fresh surface water, the five Great Lakes— Lake Superior, Lake Michigan, Lake Huron, Lake Erie, and Lake On-tario, along with the St. Lawrence River and connecting channels— comprise ninety-five percent of the fresh surface water in the United States and twenty percent of the world’s supply.2 The Great Lakes pro-vide drinking water to tens of millions of Americans and Canadians3

* © 2011, Noah D. Hall, Associate Professor, Wayne State University Law School; J.D.,

University of Michigan Law School, 1998; B.S., University of Michigan School of Natural Resources & Environment, 1995. Thanks to Benjamin Houston ( J.D., University of Michi-gan Law School, expected 2011) for his research assistance, and to Alana Van der Mude and the staff of the Boston College Environmental Affairs Law Review for their superb editorial work.

1 Noah D. Hall, Toward a New Horizontal Federalism: Interstate Water Management in the Great Lakes Region, 77 U. Colo. L. Rev. 405, 414 (2006).

2 Id. (citing N.G. Grannemann et al., U.S. Geological Survey, The Importance of Ground Water in the Great Lakes Region 1 (2000)).

3 Id. at 414--15 (citing Int’l Joint Comm’n, Protection of the Waters of the Great Lakes: Final Report to the Governments of Canada and the United States 6 (2000), available at http://www.ijc.org/php/publications/html/finalreport.html.

305


and the quality of freshwater in the Great Lakes is essential to the health and economy of the Midwest. The foundational challenge in protecting and managing the water of the Great Lakes lies in the shared jurisdiction of the waters. The Great Lakes system is shared by two countries—the United States and Canada—and eight American states—Minnesota, Wisconsin, Michigan, Illinois, Indiana, Ohio, Pennsylvania, and New York.4 How one country or state manages its use of Great Lakes water and bottomlands will likely have spillover consequences for its neighbors in the form of trans-boundary pollution and environmental impacts. Thus, the legal regime for environmental protection of Great Lakes freshwater from oil drill-ing is only as strong as the weakest link in the system. The Great Lakes have significant oil and gas resources that are economically and technologically accessible with modern drilling tech-niques. In a 2006 study, the United States Geological Survey (USGS) estimated that the United States portion of the Great Lakes contains 312 million barrels of undiscovered, technically recoverable oil, as well as 5.2 trillion cubic feet of natural gas.5 Most of the oil is beneath Lake Huron and Lake Michigan (141 and 125 million barrels, respectively), while most of the gas is beneath Lake Erie (over three trillion cubic feet).6 Michigan has over 90% of the oil resources (282 million barrels of oil) and over 40% of the natural gas (over two trillion cubic feet).7 Ohio is the only other state with significant holdings, with about 8% of the oil resources (twenty-six million barrels of oil) and a little under 40% of the natural gas ( just under two trillion cubic feet).8 There are no comprehensive studies or estimates of Great Lakes oil and gas resources under Canadian jurisdiction. The best informa-tion available is from the Ontario Ministry of Natural Resources, which estimates that the province’s portion of the Great Lakes contains ap-proximately 153 million barrels of recoverable oil and 1.5 trillion cubic feet of natural gas.9 Oil and gas production on the Canadian side of the

4 Id. at 415. 5 James L. Coleman et al., U.S. Geological Survey, Undiscovered Oil and Gas Re-

sources Underlying the U.S. Portions of the Great Lakes, 2005, at 1 (2006), available at http://pubs.usgs.gov/fs/2006/3049/fs2006-3049_8.5x11.pdf. These are mean estimates with a range of uncertainty. Id.

6 Id. 7 Id. 8 Id. 9 Crude Oil and Natural Gas Resources, Ont. Ministry Nat. Resources, http://www.mnr.

gov.on.ca/en/Business/OGSR/2ColumnSubPage/STEL02_167105.html (last modified June 5, 2009). The Ontario Ministry of Natural Resources estimates reserves from Crown land

2011] Transnational Regulation of Drilling in the Great Lakes 307

Great Lakes dates back almost a century, with commercial production of natural gas from under the bed of Lake Erie as early as 1913.10 Drilling for these oil and gas resources would create risks and po-tential impacts for the freshwater of the Great Lakes. In 2005, the United States Army Corps of Engineers released a report to Congress titled Known and Potential Environmental Effects of Oil and Gas Drilling Ac-tivity in the Great Lakes.11 The report summarized that oil drilling and infrastructure would potentially “directly impact fish and wildlife habi-tats by clearing land areas or disturbing lake bottoms,” and “the visual intrusion of oil and gas developments could reduce the desirability of these areas for tourism and other recreational uses.”12 The report fur-ther summarized the risks of a spill:

Accidental releases of oil and drilling waste could incur con-sumption bans on fish and game, impact fish and wildlife habitats, disrupt recreation and tourism, and, depending on the proximity of water intakes, contaminate public drinking water supplies. These effects could be short or long-term in nature, depending on the location and magnitude of the re-lease and the quality of the resource that was affected.13

In the aftermath of the BP blowout disaster in the Gulf of Mexico, this statement of the potential impacts of a major oil spill to an aquatic eco-system and economic region has proven accurate.

I. Federal and State Regulation of Great Lakes Oil Drilling

A. The Patchwork of State Regulation

Prior to 2001, oil and gas drilling in the United States waters of the Great Lakes was left to the individual states, which have title to the Great Lakes bottomlands pursuant to the federal Submerged Lands Act.14 In 1985, the governors of all eight Great Lakes states signed a

below the Great Lakes at 24,300,000 cubic meters of oil and 42,500,000,000 cubic meters of natural gas. Id. One cubic meter converts to approximately 6.3 barrels of oil and 35.3 cubic feet of natural gas. Id.

10 Id. 11 U.S. Army Corps of Eng’rs, Chi. Dist., Known and Potential Environmental Ef-

fects of Oil and Gas Drilling Activity in the Great Lakes, at E-1 (2005), available at http://www.lrc.usace.army.mil/GrtLakes/OilGas/FinalReport.pdf.

12 Id. at E-2. 13 Id. 14 43 U.S.C. § 1311(a) (2006). In addition to the federal Submerged Lands Act, the

Supreme Court has made clear that the states have title to submerged lands beneath navi-


non-binding statement of principle opposing oil drilling in the Great Lakes.15 In A Statement of Principle Against Oil Drilling in the Great Lakes, the governors declared: “We collectively state our opposition to oil drill-ing in the waters of the Great Lakes or their connecting channels.”16 Despite this hortatory collective statement, the legislative action from the Great Lakes states was inconsistent. As a result, a patchwork of different regulations and state bans are on the books. Some states ex-pressly ban Great Lakes oil and gas drilling, others only ban oil drilling, and some states have no laws specific to Great Lakes drilling. Michigan, the most significant state in terms of total bottomlands and oil and gas reserves, has a ban on new oil and gas drilling in the Great Lakes.17 Directional drilling from onshore facilities with wells below the Great Lakes was allowed until 2002, and pre-existing opera-tions were allowed to continue.18 In 2010, in the wake of the BP Gulf oil blowout, the Michigan legislature considered putting a constitutional amendment on the ballot to permanently ban oil and gas drilling in the Great Lakes, essentially taking the current statutory ban and put-ting it in the Michigan Constitution.19 The legislature ultimately did not approve putting the constitutional amendment on the ballot.20

Ohio, the next most significant state in terms of Great Lakes oil and gas reserves, historically left oil and gas drilling decisions to the discre-tion of the Director of the Ohio Department of Natural Resources, sub-ject to the approval of the Attorney General and Governor.21 In 2003,

gable waters within their boundaries, such as the Great Lakes and connecting channels. See Shively v. Bowlby, 152 U.S. 1, 43 (1894) (declaring that the Great Lakes belong to “the states by their inherent sovereignty”); see also infra note 32 and accompanying text (declar-ing 2001 federal moratorium on drilling in the Great Lakes).

15 See U.S. Army Corps of Eng’rs, Chi. Dist., supra note 11, at 42 (citing A Statement of Principle Against Oil Drilling in the Great Lakes, signed by the governors of Michigan ( James J. Blanchard), Wisconsin (Anthony S. Earl), Pennsylvania (Dick Thornburgh), Minnesota (Rudy Perpich), Indiana (Robert D. Orr), Ohio (Richard F. Celeste), Illinois ( James R. Thompson), and New York (Mario M. Cuomo)).

16 Id. at 42, n.13. 17 See Mich. Comp. Laws Ann. § 324.32503(3) (West 2009) (“The department shall not

enter into a lease or deed that allows drilling operations beneath unpatented lands for the exploration or production of oil or gas.”).

18 See 2002 Mich. Pub. Acts 148. 19 See H.R.J. Res. GGG, 95th Leg., Reg. Sess. (Mich. 2010). 20 See House Joint Resolution GGG (2010), Mich. Legislature, http://legislature.mi.

gov/doc.aspx?2010-HJR-GGG (last visited Apr. 15, 2011) (summarizing the legislative his-tory of House Joint Resolution GGG (2010) and indicating that it was not passed by both chambers).

21 See Ohio Rev. Code Ann. § 1505.07 (West 1996).


Ohio Governor Bob Taft issued an executive order banning oil and gas drilling in the Great Lakes.22 While the executive order expired with the Taft Administration, Ohio’s new Governor, John Kasich, has pledged to issue a new Executive Order banning oil and gas drilling in the Great Lakes.23 New York, which has portions of Lake Ontario and Lake Erie, has different restrictions for oil and gas drilling in each lake. Both oil and gas leases are prohibited for Lake Ontario bottomlands and shorelines, while oil leases are prohibited but gas leases are allowed for Lake Erie.24 This difference may be due to an historic interest in Lake Erie gas production in the mid-twentieth century,25 but there is no evidence of any active leases granted by New York.26

Wisconsin prohibits oil and gas drilling operations on Great Lakes bottomlands and adjacent bays and harbors.27 Pennsylvania allows drill-ing in its small portion of Lake Erie at the discretion of its state natural

[T]he director of natural resources, with the approval of the director of envi-ronmental protection, the attorney general, and the governor, may issue permits and make leases to parties making application for permission to take and remove sand, gravel, stone, and other minerals or substances from and under the bed of Lake Erie, either upon a royalty or rental basis, as he de-termines to be best for the state.

Id. 22 See Ohio Exec. Order No. 2003-17T ( July 14, 2003). 23 See Jim Provance, Kasich Expresses Support for Ban on Oil and Gas Drilling in Lake Erie,

Toledo Blade, Oct. 27 2010, at A3. 24 See N.Y. Envtl. Conserv. Law § 23-1101 (McKinney 2007).

The department may make leases on behalf of this state, upon such terms and conditions including consideration as to the department seem just and proper for: a. The exploration, development and production of gas in state-owned lands, except state park lands and the lands under the waters of Lake Ontario or along its shoreline; b. The exploration, development and produc-tion of oil in state-owned lands, except state park lands and the lands under the waters of Lake Erie and Lake Ontario or along their shorelines.

Id; see also id. § 23-0305 (giving the Department of Environmental Conservation additional powers to regulate oil extraction).

25 See Pervaze A. Sheikh et al., Cong. Research Serv., RL 34741, Drilling in the Great Lakes: Background and Issues 4–5 (2008).

26 See generally N.Y. State Energy Research & Dev. Auth., New York’s Natural Gas and Oil Resource Endowment: Past, Present and Potential (n.d.), available at http://www.tiogagaslease.org/images/NYSERDAReport.pdf (giving an overview of gas drilling in New York State without mentioning the importance of the Lake Erie stores).

27 See Wis. Stat. Ann. § 295.33(4) (West 2004) (“No person may conduct drilling op-erations for the exploration for or production of oil or gas if the drilling extends beneath the beds of the Great Lakes or bays or harbors that are adjacent to the Great Lakes . . . .”).


resource agency, pursuant to a general “best interests of this Common-wealth” standard and several specific restrictions and requirements.28 Illinois and Indiana, which have a relatively small portion of Lake Michigan, and Minnesota, which covers portions of Lake Superior, do not specifically address Great Lakes oil and gas drilling in their statutes. Illinois’ statewide statutory provisions for permitting and leasing of state owned bottomlands make drilling highly unlikely and subject to numerous restrictions.29 Indiana gives its state agency the authority and discretion to permit and lease the beds of lakes for oil and gas devel-opment, subject to numerous standards and restrictions.30 Minnesota authorizes leases of lands below state waters for mining and other pur-

28 See 58 Pa. Stat. Ann. § 601.205(c) (West 1996).

The department shall, on making a determination on a well permit, consider the impact of the proposed well on public resources to include, but not be limited to, the following: (1) Publicly owned parks, forests, gamelands and wildlife areas. (2) National or State scenic rivers. (3) National natural land-marks. (4) Habitats of rare and endangered flora and fauna and other critical communities. (5) Historical and archaeological sites listed on the Federal or State list of historic places.

Id.; 71 Pa. Stat. Ann. § 1340.302(a)(6) (West 1996) (“The department is hereby empow-ered to make and execute contracts or leases in the name of the Commonwealth for the mining or removal of any valuable minerals that may be found in State forests, or of oil and gas beneath those waters of Lake Erie owned by the Commonwealth . . . .”).

29 See 5 Ill. Comp. Stat. Ann. 615/2 (West 2005).

No leasing may occur on “(1) lands where threatened or endangered species occur, as determined pursuant to the federal Endangered Species Act or the Illinois Endangered Species Protection Act, (2) Illinois Natural Area Inven-tory sites, (3) nature preserves dedicated under the Illinois Natural Areas Preservation Act, (4) lands containing a wild and scenic river as designated under the Wild and Scenic River Area Act, (5) lands registered under the Register of Land and Water Reserves under Part 4010 of Title 17 of the Illi-nois Administrative Code, and (6) lands on which federal or State laws or regulations prohibit the surface extraction or production facility activity.

Id. 30 See Ind. Code Ann. § 14-38-1-6(a) (West 2003).

The commission may enter into written contracts designating a person as the permittee of the state with the exclusive right to prospect and explore not to exceed three (3) sections, or an equivalent area, of the public land for the occurrence of petroleum. A contract must contain the conditions prescribed by the rules adopted by the commission under this chapter. A permit must be for a period of not more than one (1) year in the discretion of the commis-sion.

Id; see also id. § 14-38-1-11 (limit on land allocation); id. § 14-38-1-12 (royalties require-ment); id. § 14-38-1-24 (time limitation).


poses, but with no specific provisions allowing, banning, or in any way regulating Great Lakes oil and gas drilling.31

B. The Federal Ban on Great Lakes Oil Drilling

The inconsistent and fragmented patchwork of state laws de-scribed above would be more troubling, and worthy of further detailed analysis and reform, if not for the intervention of the federal govern-ment, beginning in 2001. In 2001, Congress enacted a two-year morato-rium on federal and state permits for drilling in the Great Lakes.32 The moratorium was extended in 2003,33 and again in 2005.34 While the moratorium was in place, Congress directed the United States Army Corps of Engineers to study the environmental effects of oil and gas drilling in the Great Lakes.35 The resulting report, titled Known and Potential Environmental Effects of Oil and Gas Drilling Activity in the Great Lakes, gave Congress a sound basis for a permanent ban on drilling in the Great Lakes.36 With knowledge of the environmental, economic, and navigational impacts of oil and gas drilling, including the risks of a spill or blowout, Congress permanently banned Great Lakes drilling in 2005. Section 386 of the Energy Policy Act of 2005 provides, “[n]o Federal or State permit or lease shall be issued for new oil and gas slant, directional, or offshore drilling in or under one or more of the Great Lakes.”37 The federal drilling ban is an important backstop to inconsistent state regulation, especially because fiscally strapped state governments could view new oil and gas drilling as a potential solution to budget shortfalls. For example, in Michigan, oil and gas drilling leases would

31 See Minn. Stat. Ann. § 93.25 (West 2004).

The commissioner may issue leases to prospect for, mine, and remove miner-als other than iron ore upon any lands owned by the state, including trust fund lands, lands forfeited for nonpayment of taxes whether held in trust or otherwise, and lands otherwise acquired, and the beds of any waters belong-ing to the state.

Id. 32 Energy and Water Development Appropriations Act, 2002, Pub. L. No. 107-66,

§ 503, 115 Stat. 486, 512 (2001). 33 Consolidated Appropriations Resolution, 2003, Pub. L. No. 108-7, § 505, 117 Stat.

11, 158 (2003). 34 Consolidated Appropriations Act, 2005, Pub L. No. 108-447, § 504, 118 Stat. 2809,

2963 (2004). 35 Energy and Water Development Appropriations Act, 2002, § 503. 36 See generally U.S. Army Corps of Eng’rs, Chi. Dist., supra note 11. 37 42 U.S.C. § 15941(2006).


provide much needed revenue for the Michigan Natural Resources Trust Fund, which is used to purchase and improve park land.38 With the federal ban in place, the issue of Great Lakes oil and gas drilling in the United States has been effectively addressed. However, the Canadian side of the Great Lakes is still open to drilling, making an international agreement a necessary and logical policy reform to ade-quately protect the world’s most significant freshwater ecosystem.

C. Canadian Regulation of Great Lakes Oil Drilling

Unlike the United States federal government and several key Great Lakes states, Canada has not banned oil and gas drilling in the Great Lakes. Specifically, Ontario—the only province with Great Lakes juris-diction—allows offshore gas wells and directional drilling of oil wells in the Great Lakes.39 Despite allowing Great Lakes drilling, oil and gas from the Great Lakes are a relatively minor source of energy for Ontario. According to the Ontario Ministry of Natural Resources, the province’s crude oil and natural gas production provides only one percent of the province’s consumption of crude oil and two percent of the province’s consump-tion of natural gas.40 In 2006, the most recent year for which data is available, Ontario’s crude oil production had a wellhead value of only $57 million,41 a relatively minor figure in the context of the regional Great Lakes economy.42 So while Ontario continues to allow offshore gas wells and direc-tional drilling of oil wells in the Great Lakes, it is a very small industry with minimal economic and energy supply value. Given the importance of protecting the freshwater of the Great Lakes—in Canada as well as in the United States—and the relatively small economic and energy value of Great Lakes drilling, there is an opportunity to work with Canada and the province of Ontario to phase out oil and gas drilling or at least restrict the practice to better protect the Great Lakes.

38 See Mich. Const. art. 9, § 35. 39 See Ont. Ministry Nat. Resources, supra note 9. Directional wells are drilled verti-

cally from shore, then angled to reach the oil or gas deposit beneath the floor of the Great Lakes. U.S. Army Corps of Eng’rs, Chi. Dist., supra note 11, at 11.

40 Ont. Ministry Nat. Resources, supra note 9. All of Ontario’s crude oil and natural gas production is consumed within the province. Id.

41 Id. 42 See U.S. Policy Comm. for the Great Lakes, Great Lakes Strategy 2002, at 2

(2002) (stating economic activity of over $200 billion per year).


II. Addressing Oil and Gas Drilling Through the U.S.-Canadian Transboundary Agreements and Institutions

The United States and Canada have a long history of binational cooperation in managing and protecting their shared freshwater re-sources.43 A full history and analysis of the U.S.-Canadian transbound-ary water regime is beyond the scope of this Article and is provided elsewhere,44 but a short review demonstrates that the two countries have ideal institutions and agreements to address potential transbound-ary risks of Great Lakes oil drilling. Canada and the United States have a strong history of trans-boundary international water protection and management. For over a century, the Boundary Waters Treaty of 190945 has provided a substan-tive governance foundation to protect the Great Lakes and other shared freshwater bodies. The Boundary Waters Treaty requires coop-erative management between the United States and Canada to ensure free navigation and freshwater protection for the two countries’ shared boundary waters, including the Great Lakes.46 Article IV of the Bound-ary Waters Treaty provides: “It is further agreed that the waters herein defined as boundary waters and waters flowing across the boundary shall not be polluted on either side to the injury of health or property on the other.”47 The Boundary Waters Treaty established the International Joint Commission with numerous functions to further the treaty’s objectives and duties.48 This investigative and adjudicative body is comprised of six political appointees, and the United States and Canada appoint three each.49 The International Joint Commission is well-respected by both countries and enjoys a deserved reputation for objectivity and

43 See Noah D. Hall, The Centennial of the Boundary Waters Treaty: A Century of United

States-Canadian Transboundary Water Management, 54 Wayne L. Rev. 1417, 1418 (2008). 44 See id. at 1420; see also Noah Hall, Bilateral Breakdown: U.S.-Canada Pollution Disputes,

21 Nat. Resources & Env’t 18, 18 (2006) (giving a brief history of Boundary Waters Treaty); Noah D. Hall, The Evolving Role of Citizens in United States-Canadian International Environmental Law Compliance, 24 Pace Envtl. L. Rev. 131, 133, 138 (2007) (discussing legal origins of the Boundary Waters Treaty).

45 Treaty between United States and Great Britain Relating to Boundary Waters Be-tween the United States and Canada, U.S.-Gr. Brit., Jan. 11, 1909, 36 Stat. 2448 [hereinaf-ter Boundary Waters Treaty] (Great Britain on behalf of Canada).

46 See id. art. I. Lake Michigan, which is entirely within U.S. territory, is not considered a “boundary water” under the treaty. See id. However, the Boundary Waters Treaty does extend its guarantees of the mutual right of free navigation to the waters of Lake Michigan. See id.

47 Id. art. IV. 48 Id. art. III. 49 Id. art. VII.


technical expertise on environmental issues.50 Pursuant to Article IX of the Boundary Waters Treaty, either country can send a reference to the International Joint Commission for non-binding investigative reports and studies.51 The International Joint Commission’s reports are known for utilizing the best available science, produced by technical experts free of political bias.52 As a first step, the United States and Canada should make a refer-ence to the International Joint Commission to study the potential im-pact of oil and gas drilling in the Great Lakes. The reference should di-rect the International Joint Commission to consider impacts that could potentially impede and harm navigation and water quality in violation of the Boundary Waters Treaty. Given that Canada currently allows Great Lakes drilling while the United States bans it, the countries may have different views on the risk and potential for harm of the practice.53 In-stead of opening a contentious political fight that could undermine bi-national relations, the countries should use the Boundary Water Treaty’s reference process54 and have the International Joint Commission pro-vide an objective, scientifically sound risk analysis. The reference should further direct the International Joint Commission to recommend policy reforms to ensure that drilling on either side of the border would not harm navigation and water quality in the Great Lakes.55 To initiate the formal process of a Boundary Waters Treaty refer-ence, on July 30, 2010, over twenty members of the United States House of Representatives from the Great Lakes states sent a letter to United States President Barack Obama, Canadian Prime Minister Stephen Harper, and the International Joint Commission.56 The letter urged the federal governments, in coordination with the International Joint Com-mission, to “undertake a review of oil and gas drilling by Canada in the

50 See Noah D. Hall, Transboundary Pollution: Harmonizing International and Domestic Law,

40 U. Mich. J.L. Reform 681, 707 (2007). 51 Boundary Waters Treaty, supra note 45, art. IX. While an Article IX reference need

only be made by one country, as a matter of custom the references have been made jointly to ensure cooperation and good faith. See Hall, supra note 50, at 706–07.

52 See Hall, supra note 50, at 707. 53 Compare 42 U.S.C. § 15941(2006) (indicating that the United States bans drilling in

the Great Lakes), with Ont. Ministry Nat. Resources, supra note 9 (discussing Canada’s drilling operations in the Great Lakes).

54 Boundary Waters Treaty, supra note 45, art. IX. 55 Id. 56 Letter from members of Congress to President Obama ( July 30, 2010), available at

http://www.greatlakeslaw.org/files/Congressional_letter_re_GL_drilling.pdf.


Great Lakes, particularly in regard to safety, environmental impact and oil spill response plans.”57 If the International Joint Commission identifies risks of trans-boundary harm from Canadian drilling, there is an ideal international agreement already in place to institute policy reforms to protect the Great Lakes. The Great Lakes Water Quality Agreement, first signed in 1972 by Prime Minister Pierre Trudeau and President Richard Nixon, is an executive agreement entered into pursuant to the Boundary Wa-ters Treaty that addresses specific water quality threats and issues in the Great Lakes.58 It was subsequently amended and resigned in 197859 and again in 198760 to expand its coverage and address new water qual-ity issues.61 The Great Lakes Water Quality Agreement has not been revised since 1987, but recently the United States and Canada, with the assistance of the International Joint Commission, have begun a com-prehensive review of the Agreement and have sought public input on potential revisions to address emerging threats to the Great Lakes.62 In the wake of the Gulf oil disaster, there is substantial public and gov-ernmental support for taking a hard look at Great Lakes drilling,63 and perhaps addressing this issue in a revision to the Great Lakes Water Quality Agreement.

Conclusion

After witnessing the destruction of the Gulf of Mexico ecosystem, there is significant interest and concern among the public and policy makers in protecting the freshwater of the Great Lakes from the risks of oil and gas drilling.64 While the demand for energy—including fossil fuels—cannot be brushed aside, there is consensus in the Great Lakes region that the benefits of Great Lakes drilling are not worth the risks to the freshwater that tens of millions of Americans and Canadians rely on for their drinking water.65 The key states—Michigan and Ohio—ban

57 Id. 58 Great Lakes Water Quality Agreement, U.S.-Can., Apr. 15, 1972, 23.1 U.S.T. 301. 59 Great Lakes Water Quality Agreement, U.S.-Can., Nov. 22, 1978, 30.2 U.S.T. 1384. 60 Protocol on Great Lakes Water Quality, as amended on October 16, 1987, Amending

the 1978 Agreement Between the United States of America and Canada, U.S.-Can., Nov. 18, 1987, T.I.A.S. No. 11551.

61 See Hall, supra note 43, at 1431–33. 62 See id. at 1432–33. 63 See Brian Cox, Lake Michigan “Oil Spill,” Chi. Trib., July 1, 2010, at I3; Midwest Oil

Mess, Chi. Trib., July 30, 2010, at I24. 64 See Cox, supra note 63; Midwest Oil Mess, supra note 63. 65 See Hall, supra note 1, at 414–15.


oil and gas drilling,66 and since 2005, the United States federal gov-ernment has permanently banned new leases and permits. However, Ontario continues to allow offshore gas wells and directional drilling of oil wells in the Great Lakes, despite the minimal economic and energy supply benefits.67 To address the risk to Great Lakes water from Canadian oil and gas drilling, existing U.S.-Canadian transboundary institutions and agree-ments can be effectively and pragmatically utilized. The Boundary Wa-ters Treaty provides a foundation for binational governance of the Great Lakes to protect water quantity, water quality, and navigation.68 The International Joint Commission, the binational body created by the Boundary Waters Treaty, is an ideal institution for objectively ana-lyzing the risks of drilling and recommending appropriate regula-tions.69 The International Joint Commission’s recommendations can be implemented through revisions to the Great Lakes Water Quality Agreement during the ongoing public process and negotiation initi-ated by the two countries last year.70

66 See Mich. Comp. Laws Ann. § 324.32503(3) (West 2009); Ohio Rev. Code Ann.

§ 1505.07 (West 1996). 67 Ont. Ministry Nat. Resources, supra note 9. 68 See Boundary Waters Treaty, supra note 45; Hall, supra note 43, at 1418–19. 69 See Hall, supra note 50, at 707. 70 See id.

OF DEAD PELICANS, TURTLES, AND MARSHES: NATURAL RESOURCES

DAMAGES IN THE WAKE OF THE BP DEEPWATER HORIZON SPILL

Itzchak E. Kornfeld*

Abstract: This Article posits that in its role as the lead agency among the United States’ natural resources trustees, the National Oceanic & Atmos-pheric Administration’s piecemeal assessment of natural resources dam-ages, i.e., valuing one dead bird at a time or the death of just a tract of marsh, fails to consider the inherent worth or the value of the entire eco-system. Valuing the destruction of the entire ecosystem as a result of the BP Deepwater Horizon well blowout is the best way to assess the damage in the Gulf Coast, particularly in south Louisiana. That crude oil spill re-sulted in an estimated 53,000 barrels released per day, and a total volume of 4.9 million barrels that despoiled the waters of the Gulf of Mexico and the surrounding shorelines. As a consequence of the spill, thousands of birds, turtles, fish, and marshlands were left to die.

* © 2011, Itzchak E. Kornfeld, Faculty of Law, The Hebrew University of Jerusalem

and Visiting Professor, Widener Law School, Delaware. B.Sc., M.A., J.D. (Tulane), LL.M. (Georgetown), LL.D. (Hebrew University of Jerusalem, expected 2011). Thanks to Zyg Plater. Thanks also to the editors of the Review, particularly Alana Van der Mude, for their assistance in the editing process. Any errors are of course to be attributed solely to the author.

317


Introduction

I don’t like to call it a disaster, because there has been no loss of human life. I am amazed at the publicity for the loss of a few birds.”

—Fred L. Hartley, President of Union Oil Company, following the 1969 Santa Barbara Channel Oil Spill1

The BP Macondo well’s2 blowout, and the subsequent oil spill in the Gulf of Mexico,3 was one of the worst man-made environmental disasters that the United States has experienced to date. Beginning on April 20, 2010, and continuing for nearly ninety days thereafter, mil-lions of barrels of oil gushed into the Gulf of Mexico,4 producing one of the most devastating eco-disasters since the Exxon Valdez’s ground-ing in Prince William Sound, Alaska.5 In this Article, I focus upon the restoration of the Gulf Coast’s natural resources. This leads to the fol-lowing question: how much is, for example, Louisiana’s state bird, the Brown pelican worth?6 What are people across the United States willing

1 1969 Oil Spill, U. Cal. Santa Barbara Dep’t of Geography, http://www.geog.

ucsb.edu/~jeff/sb_69oilspill/69oilspill_articles2.html (last updated Dec. 2004) (quoting Fred L. Hartley) (internal quotation marks omitted).

2 BP’s prospect, located within Mississippi Canyon Block 252 (MC 252), was called Ma-condo and that is why I refer to it as the Macondo well. Art Berman, What Caused the Deep-water Horizon Disaster?, TheOilDrum.com (May 21, 2010, 10:28 AM), http://www. theoildrum.com/node/6493. Concomitantly, the rig—the semi-submersible platform owned by Transocean from which the well was drilled—was named the Deepwater Horizon. See, e.g., David Hammer, 5 Key Human Errors, Colossal Mechanical Failure Led to Fatal Gulf Oil Rig Blowout, Times-Picayune, (Sept. 5, 2010, 3:08 PM), http://www.nola.com/news/gulf-oil- spill/index.ssf/2010/09/5_key_human_errors_colossal_me.html.

3 See Berman, supra note 2. 4 Alice-Azania Jarvis, BP Oil Spill: Disaster by Numbers, Independent (London), Sept. 14,

2010, http://www.independent.co.uk/environment/bp-oil-spill-disaster-by-numbers-2078396. html.

5 See generally Riki Ott, Sound Truth and Corporate Myth$: The Legacy of the Exxon Valdez Oil Spill (2005) (discussing the aftermath of the 1989 oil spill in Prince William Sound); Zygmunt J.B. Plater, Exxon Valdez Re-Surfaces in the Gulf of Mexico and the Hazards of “Megasystem Centripetal Di-Polarity,” 38 B.C. Envtl. Aff. L. Rev. 389 (2011) (dis-cussing the Exxon Valdez oil spill).

6 The Brown pelican (Pelecanus occidentalis) was first listed as an endangered species on June 2, 1970, and it was delisted on November 17, 2009. See Endangered Species Act, 16 U.S.C. §§ 1531–1544 (2006); Endangered and Threatened Wildlife and Plants; Removal of the Brown Pelican (Pelecanus occidentalis) from the Federal List of Endangered and Threatened Wildlife; Final Rule, 74 Fed. Reg. 59,443, 59,444 (Nov. 17, 2009) (codified at 50 C.F.R. pt. 17); Species Profile for Brown pelican (Pelecanus occidentalis), U.S. Fish & Wildlife Serv., http://ecos.fws.gov/speciesProfile/profile/speciesProfile.action?spcode=B02L (last visited Apr. 15, 2011) (discussing the history of the Brown pelican’s listing and delisting).

2011] Natural Resources Damages from the BP Disaster 319

to pay, in dollars and cents, for the survival of that bird species?7 $5.00? $100.00? $1,000.00? Or possibly $1,000,000.00? When contemplating what that price ought to be, it is important to recall that until quite recently the Brown pelican was:

Hounded by hunters and fishermen [for over a hundred years], driven to near-extinction by chemical pollution . . . [it], has survived a century of human abuse. . . . The odd-looking seabird with a distinctive pouch beneath its foot-long bill was removed from the federal endangered species list only last November. Now its recovery could be un-dermined by millions of gallons of oil polluting the Gulf since . . . [the] April 20 [Horizon] rig explosion.8

Similarly, what price is the average American willing to pay for the ex-tremely endangered Kemp’s ridley turtle?9 And how much for an acre of south Louisiana marsh? $2.00? $50.00? $10,000.00? More? Less? In-deed, what is the value of the entire ecosystem?10 Finally, how much is the “national treasure” that is America’s Gulf Coast worth?11 What is the value of its natural resources, not only as an essential “economic engine for the entire United States,” but its waters, which “sustain a diverse and vibrant ecosystem?”12 Indeed, what is the Gulf’s “natural beauty” worth?13 What about its “historic” and cultural riches?14

7 See discussion infra Parts II–III (discussing natural resource damage valuation methods). 8 John Flescher, Brown Pelican, Louisiana’s State Bird, Imperiled by Gulf of Mexico Oil Spill,

Times-Picayune (May 19, 2010, 7:20 AM), http://www.nola.com/news/gulf-oil-spill/index. ssf/2010/05/louisianas_state_bird_brown_pe.html.

9 The Kemp’s ridley turtle was listed as an endangered species in 1970. See List of En-dangered Foreign Fish and Wildlife, 35 Fed. Reg. 18,319, 18,322 (Dec. 2, 1970) (codified at 50 C.F.R. pt. 17 app. A). Kemp’s Ridley Turtle (Lepidochelys kempii), Nat’l Oceanic & At-mospheric Admin., Fisheries Office of Protected Res., http://www.nmfs.noaa.gov/pr/ species/turtles/kempsridley.htm (last visited Apr. 15, 2011). (“[M]ale Kemp’s ridleys ap-pear to occupy many different areas within the Gulf of Mexico. Some males migrate annu-ally between feeding and breeding grounds, yet others may not migrate at all. . . . Kemp’s ridleys face threats on both nesting beaches and in the marine environment.”).

10 See discussion infra Parts II–III. 11 See Exec. Order No. 13,554, 75 Fed. Reg. 62,313, 62,313 (Oct. 8, 2010) (“The Gulf

Coast is a national treasure. Its natural resources are an important economic engine for the entire United States; its waters sustain a diverse and vibrant ecosystem; and the Gulf’s culture, natural beauty, and historic significance are unique.”).

12 See id. 13 See id. 14 See id.


The critical issue of the value of the Gulf’s natural resources will have to be confronted by the designated natural resources trustees.15 Trustees include the National Oceanic and Atmospheric Administra-tion, the lead agency, the Department of the Interior, and their co-equal state partners.16 Indeed, the restoration of the Gulf Coast’s natu-ral resources is one of the chief environmental tasks facing federal and state government agencies. Nevertheless, restoring the Gulf’s natural resources cannot be done in a vacuum.17 Clearly, any restoration plan must consider the environment.18 However, it must also include the people who live in the area and their history.19 Since south Louisiana took the brunt of the BP oil spill,20 this Article will focus on that geo-graphic area. Part I discusses the people of Louisiana and the culture that binds them to the marshes and the sea.21 Part II.A discusses examples of eco-system services.22 Part II.B addresses the Oil Pollution Act of 1990 and the fact that Congress is failing to develop a contemporary legal regime for this new type of ecological calamity.23 Part II.C explores the assess-

15 Multiple sources of law designate natural resource trustees. See, e.g., Exec. Order No. 12,580, 3 C.F.R. 193, 194 (1988) (designating certain cabinet officers as the federal trus-tees for natural resources damages); 15 C.F.R. § 990.11 (2011) (“The Oil Pollution Act of 1990 (OPA), 33 U.S.C. 2701 et seq., provides for the designation of federal, state, and . . . local officials to act on behalf of the public as trustees for natural resources . . . .”); 40 C.F.R. § 300.600 (2010) (“The President is required to designate in the NCP [CERCLA’s National Contingency Plan] those federal officials who are to act on behalf of the public as trustees for natural resources. Federal officials so designated will act pursuant to section 107(f) of CERCLA, section 311(f)(5) of the CWA, and section 1006 of the OPA. . . . (1) Secretary of Commerce. The Secretary of Commerce shall act as trustee for natural resources managed or controlled by DOC [Department of Commerce] and for natural resources managed or controlled by other federal agencies and that are found in, under, or using waters navigable by deep draft vessels, tidally influenced waters, or waters of the contigu-ous zone, the exclusive economic zone, and the outer continental shelf.”)

16 See Discharge of Oil From Deepwater Horizon/Macondo Well, Gulf of Mexico; In-tent to Conduct Restoration Planning, 75 Fed. Reg. 60,800, 60,801 (Oct. 1, 2010); Deepwa-ter Horizon/BP Oil Spill Response, Nat’l Oceanic & Atmospheric Admin., Off. Response & Restoration, http://response.restoration.noaa.gov/dwh.php?entry_id=809 (last updated Oct. 28, 2010).

17 See infra Part II (discussing possible valuation techniques and the effects of natural resource damage on an entire ecosystem).

18 See infra Part II.C. 19 See infra Part I. 20 See, e.g., Anna Driver, On Louisiana Coast, Residents Bemoan a Lost Summer, Reuters,

Aug. 27, 2010, available at http://www.reuters.com/article/2010/08/27/us-oil-spill-louisiana-idUSTRE67Q5F420100827 (explaining that Louisiana has experienced the most damage from the oil spill).

21 See infra Part I. 22 See infra Part II.A. 23 See infra Part II.B.


ment of the value of natural resources and five methods of valuing nat-ural resources, including: (1) Contingent Valuation Methodology; (2) Market Valuation Approach; (3) Restoration and Replacement Cost; (4) Use Value Methodology; and (5) Habitat Equivalency Analysis.24 Part III deals with the natural resources trustees’ current methodology for valuing natural resources damages.25 Part IV analyzes the Natural Resource Damage Assessment Process (NRDA), the Deepwater Hori-zon spill, and cost-benefit analysis.26 Finally, Part V discusses the failure of cost-benefit analysis and suggests that Congress’s reference to “natu-ral resources” is to valuing the sum of those resources or the entire eco-system collectively, not to valuing each resource individually.27

I. Louisiana, Louisiana

A. The People: Les Acadiens

Citizen participation is the hallmark of the NRDA process.28 More-over, regulations promulgated under the Oil Pollution Act of 199029— one of the operative statutes under which the cleanup and restoration of south Louisiana has and will take place—also require that the respon-sible parties (RPs), such as BP and Transocean in the Gulf disaster, be invited to participate in the NRDA activity.30 Due to the RPs’ expertise and agency capture,31 it is likely that commenting members of the pub-lic who have been personally injured will be at a distinct technological and scientific disadvantage, relative to the relevant industry groups.

24 See infra Part II.C. 25 See infra Part III. 26 See infra Part IV. 27 See infra Part V. 28 See, e.g., 43 C.F.R. § 11.30(c)(1)(iii), 11.32(c) (2010) (stating that the costs of public

participation can be assessed, and mandating public involvement in the NRDA process). 29 See Oil Pollution Act of 1990 (OPA), 33 U.S.C. §§ 2701–2762 (2006); OPA Guidance

About DARRP, Nat’l Oceanic & Atmospheric Admin., http://www.darrp.noaa.gov/library/ 1_d.html (last updated July 19, 2010).

30 15 C.F.R. § 990.14(c)(1)–(2) (2011) (“Trustees must invite the responsible parties to participate in the natural resource damage assessment described in this part.”); see Dis-charge of Oil From Deepwater Horizon/Macondo Well, Gulf of Mexico; Intent To Con-duct Restoration Planning, 75 Fed. Reg. 60,800, 60,801 (Oct. 1, 2010) (identifying respon-sible parties from the Gulf); Stephen Gidiere et al., The Coming Wave of Gulf Coast Oil Spill Litigation, 71 Ala. Law. 374, 376 (2010).

31 See Detlof von Winterfeldt, Setting Standards for Offshore Oil Discharges: A Regulatory Deci-sion Analysis, 30 Operations Res. 867, 868–69 (1982). See generally Protecting the Public Interest: Understanding the Threat of Agency Capture: Hearing Before the Subcomm. on Admin. Oversight & the Courts, S. Judiciary Comm., 111th Cong. 50–51 (2010) (statement of Sen. Russell D. Feingold) (discussing agency capture).


In order to fully understand how the injured and aggrieved public in south Louisiana will react to any remedy, one must understand these people’s present needs, past activities, and their sensibilities and atti-tudes vis-à-vis the Gulf of Mexico’s environment.32 For those unfamiliar with the culture of the peoples of south Louisiana, it is critical to ap-preciate fully that the spill’s destruction of the Gulf’s natural re-sources,33 including the wildlife, will not begin to fade from memory for at least a few generations.34 Why? Because of the Cajuns’35 and the local native tribes’36 close relationship with the land and water of south Louisiana,37 where for some ten generations they have worked, lived, and gathered their families for outings and Fais do-dos—Cajun dance

32 See Barry Yeoman, Saving Louisiana: What Can We Do?, OnEarth ( Jan. 7, 2011),

http://www.onearth.org/article/saving-louisiana-what-can-we-do. 33 33 U.S.C. § 2701(20) (2006) (defining natural resources as “land, fish, wildlife, biota,

air, water, ground water, drinking water supplies, and other such resources belonging to . . . the United States (including the resources of the exclusive economic zone), any State or local government or Indian tribe, or any foreign government”); see Ray Mabus, America’s Gulf Coast: A Long Term Recovery Plan After the Deepwater Horizon Oil Spill 1 (2010) (discussing the impact of the oil spill on Gulf Coast residents), available at http:// www.restorethegulf.gov/sites/default/files/documents/pdf/gulf-recovery-sep-2010.pdf.

34 See, e.g., Mabus, supra note 33, at 39. Having lived and worked as a petroleum geolo-gist in south Louisiana for over a decade, the author can personally attest to the impact that the Deepwater Horizon/BP Macondo spill has had, not only upon the natural re-sources, but on the region’s people.

35 Cajun is slang for les Cadiens or les Acadiens, who are a cultural or ethnic group that lives in south Louisiana and whose “capital” is Lafayette. See Jacques Henry, From Acadian to Cajun to Cadien: Ethnic Labelization and Construction of Identity, J. Am. Ethnic Hist., Summer 1998, at 29, 29–47. They are the descendants of French Acadian refugees, who escaped per-secution by English forces during the eighteenth century and traveled from Acadia, in the Canadian Maritime provinces, to south Louisiana. See Bruce J. Bourque, Ethnicity on the Mari-time Peninsula, 1600–1759, 36 Ethnohistory 257, 260–63 (1989); Henry, supra, 29–47. These French-speaking refugees moved from life in the Acadian cities of Dalhousie, Shelbourne, Argyle, and as far west as Quebec, favoring a rural mode of life, fishing, and farming along the bayous. See Bourque, supra, 260–63; Henry, supra, 29–47.

36 See Welcome to the United Houma Nation, United Houma Nation (Aug. 12, 2008), http://www.unitedhoumanation.org/node/3 (“The United Houma Nation (UHN) is a state recognized tribe of approximately 17,000 tribal citizens residing within a six-parish (county) service area encompassing 4,570 square miles. The six parishes, Terrebonne, Lafourche, Jefferson, St. Mary, St. Bernard and Plaquemines parishes are located along the southeastern coast of Louisiana. Within this area, distinct tribal communities are situated among the interwoven bayous and canals where Houmas traditionally earned a living. Although by land and road these communities are distant, they were historically very close by water. However, boat travel is no longer a viable option due to the effects of coastal ero-sion, which has left these waterways either nonexistent or impassable and often treacher-ous.”)

37 See id. (describing the tribe’s relationship with the land and waters of Louisiana); see also Bourque, supra note 35, at 260–63; Henry, supra note 35, at 29–47.


parties.38 That is also why few in the southern reaches of the Bayou State can turn away from the hard and depressing facts of the spill, in-cluding the horrific deaths of eleven of the oil platform’s workers who were taken away from this extremely close-knit community and the ex-termination of the region’s fauna and flora.39 Indeed, as the millions of barrels of oil gushed from the wellbore, streamed into the Gulf, and made their way landward, they destroyed oyster beds, fisheries, and the livelihoods of fishermen, shrimpers, and crab processors.40 The oil additionally impacted ancillary businesses from Terrebonne Bay, in Louisiana’s LaFourche Parish, east to Bayou La Battre in Alabama’s Mobile County.41 A paradigm of the power of the Cajuns’ and native peoples’ intimate bond with south Louisiana’s resources is demonstrated by the following statement expressed by a participant at a Houma, Louisiana, post-spill town meeting: “We need to understand that the environment and our lifestyle and our commu-nities and the businesses that flourish down here must work together.”42

B. The Darker Side

Notwithstanding the foregoing, there is also a glaring inconsis-tency to this love affair with the Coast and its “resources”: a concomi-tant love of, and reliance upon, the oil and gas industry.43 As was re-cently pointed out by Professor Oliver Houck,44

No state in the union has been more firmly wedded to the oil and gas industry than Louisiana. No more zealous preachers of the clean oil gospel can be found than the state’s politicians, who

38 A Glossary of Terms Used in New Orleans, ExperienceNewOrleans.com, http://www.

experienceneworleans.com/glossary.html (last visited Apr. 15, 2011) (defining fais do-do). 39 See Jarvis, supra note 4 (describing death of platform workers and the extent of

damage to the Gulf Coast’s land and environment); Yeoman, supra note 32 (discussing marine life’s importance to the Louisiana community).

40 See Notice of Intent, Discharge of Oil from Deepwater Horizon/Macondo Well, Gulf of Mexico; Intent to Conduct Restoration Planning, 75 Fed. Reg. 60,800, 60,801–02 (Oct. 1, 2010); Nat’l Oceanic & Atmospheric Admin. (NOAA), NOAA’s Oil Spill Response: Assessment and Restoration 1 (2010); NOAA, NOAA’s Oil Spill Response: Effects of Oil on Marine Mammals and Sea Turtles 1 (2010); NOAA, NOAA’s Oil Spill Re-sponse: Fishing Industry in the Gulf of Mexico 1 (2010).

41 See Nat’l Oceanic & Atmospheric Admin., Nearshore Surface Oil Forecast Deepwater Horizion MC 252, at 1 (2010).

42 See, e.g., Mabus, supra note 33, at i. 43 See, e.g., Oliver Houck, Who Will Pay to Fix Louisiana?, Nation, July 12, 2010, at 11

(describing Louisiana’s reliance on the oil and gas industry). 44 Oliver A. Houck, Tulane U. L. Sch., http://www.law.tulane.edu/tlsfaculty/profiles.

aspx?id=430 (last visited Apr. 15, 2011).


were elected by oil money (at the high end of industry cam-paign funding) and have defended the industry from regula-tion (including wetland protections), reduced its royalties with tax breaks and “royalty holidays” (thereby depriving the US Treasury of some $53 billion in revenues from existing off-shore leases) . . . . 45

With this brief geographic and cultural sojourn now over, one of the main enterprises of this Article is to highlight the fact that the nec-essary repair and restoration efforts in the Gulf will take decades.46 In-deed, Americans cannot be allowed to forget this disaster, as they have countless others, including the aftermath of Hurricanes Katrina and Rita.47 Lawyers, scientists, and lay people must keep this tragedy’s long-term effects in the public’s eye, lest politicians are allowed to drop the ball on this issue in their haste to move on to what they deem to be more expedient political concerns.48

45 Houck, supra note 43, at 11 (emphasis added). 46 See, e.g., id. (“It is bad, particularly for local communities, and the long term is any-

one’s guess. We still do not know the full Exxon Valdez story, and that was in a more con-fined space, twenty-one years ago.”). See generally Ott, supra note 5 (discussing the legacy of the Exxon Valdez disaster).

47 See, e.g., Henry J. Kaiser Family Found., New Orleans Five Years After the Storm: A New Disaster Amid Recovery 1, 5, 7 (2010), available at http://www.kff.org/ kaiserpolls/upload/8089.pdf (finding that seven out of ten of Orleans Parish residents feel the nation has forgotten the challenges they face).

48 See, e.g., Houck, supra note 43, at 11 (describing political ties of government to in-dustry and the need not to deny environmental damage).


II. Natural Resources Valuation

A. Examples of Ecosystem Services49

As the great Mississippi River Delta disappears, so do the ecosystems, econo-mies and people that it holds. The Mississippi River is the solution. It has the water, sediment and energy to rebuild land, defend against hurricanes and again provide habitat, safety, livelihood, and prosperity. We must look to the natural functioning of the delta to guide us in restoration.

—John Day, 200750

Ecosystems as a whole provide value beyond the individual natural resources that are their building blocks. Ecosystem functions or services are “‘the conditions and processes through which natural ecosystems and the species that make them up sustain and fulfill human life.’ Eco-systems provide a variety of services that individuals and communities use and rely on, not only for their quality of life but also for economic production.”51 Ecosystems encompass structural constituents like marsh flora, as well as dynamic procedures like nutrient cycling, water streams, and the life cycles of organisms like fish, oysters, and shrimp.52 These structural constituents and dynamic procedures include “soil accumulation, habitat creation, reduced fetch, [and] obstructions to hurricane storm surges,” which engender ecological commodities such as oxygen, water, fauna, and services such as “hurricane and flood pro-tection, water filtration, recreation, [and] aesthetic value.”53

Ecological commodities are a broad category and include both ser-vices and products obtained from ecosystems. They include: (1) purifi-cation of the air and water; (2) mitigation of hurricanes and floods; (3) recreation; (4) generation and renewal of soil and soil fertility; (5)

49 For excellent discussions of ecosystem services, see Gretchen C. Daily, Introduction:

What Are Ecosystem Services?, in Nature’s Services: Societal Dependence on Natural Ecosystems 1, 3–6 (Gretchen C. Daily ed., 1997). Seventeen ecosystem services were re-cently identified and economically evaluated, with an estimated worldwide valuation of $33 trillion per year, considerably in excess of total global gross national product of $18 trillion per year. See Robert Costanza et al., The Value of the World’s Ecosystem Services and Natural Capital, Nature, 15 May 1997, at 253, 253.

50 David Batker et al., Earth Econ., Gaining Ground: Wetlands, Hurricanes and the Economy: The Value of Restoring the Mississippi River Delta 7 (2010), available at http://www.eartheconomics.org/FileLibrary/file/Reports/Louisiana/Earth_Economics_Re- port_on_the_Mississippi_River_Delta_compressed.pdf.

51 Id. at 22 (quoting Daily, supra note 49, at 3). 52 See id. at 21. 53 Id.


maintenance of biodiversity; (6) partial stabilization of climate; and (7) fishing, crabbing, and shrimping activities, among many others.54 Damages provisions in certain federal statutes have begun to take note of, and try to estimate, the value of lost natural resources and eco-system services after disasters such as the Deepwater Horizon spill.

B. Natural Resources Damages Under the Oil Pollution Act of 1990

The Oil Pollution Act of 1990 (OPA) “addresses oil pollution and establishes liability for the discharge and substantial threat of a dis-charge of oil to navigable U.S. waters and shorelines.”55 The statute aims, among other goals, to restore natural resources and lost services resulting from oil spills.56 OPA incorporates the natural resources dam-ages provision of the Clean Water Act’s section 311, and the natural resources damages provision of the Comprehensive Environmental Re-sponse, Compensation, and Liability Act (CERCLA).57 Until recently, holding parties liable for damages to natural re-sources was inconceivable. That changed with the prescient passage of natural resources provisions in section 311 of the Federal Water Pollu-tion Control Act—now commonly referred to as the Clean Water Act58—and in the subsequent enactment of CERCLA.59 Even following the passage of the latter two statutes, little effort was made to calculate

54 See id. at 22 tbl.1, 34. 55 OPA Guidance About DARRP, supra note 29. 56 Id. 57 See Clean Water Act § 311, 33 U.S.C. § 1321 (2006)(explaining liability for and assess-

ment of natural resources damages under the Clean Water Act); Oil Pollution Act of 1990 § 1006, 33 U.S.C. § 2706 (2006) (explaining liability for and assessment of natural resources damages under OPA); Comprehensive Environmental Response, Compensation, and Liabil-ity Act § 107(a)(4)(C), 42 U.S.C. § 9607(a)(4)(C) (2006) (defining the scope of natural re-source liability under CERCLA as “damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss result-ing from such a [hazardous] release”); Kristina Alexander, Cong. Research Serv., R41396, The 2010 Oil Spill: Natural Resource Damage Assessment Under the Oil Pollution Act 4–5 (2010); see also 42 U.S.C. § 9607(f)(1) (providing for liability for natural resources damages, and stating that where natural resources damages are established pursu-ant to CERCLA’s § 107(a)(4)(C), liability shall be to the United States, any State, or an In-dian Tribe).

58 See 33 U.S.C. § 1321(f)(4) (“The costs of removal . . . shall include any costs or ex-penses incurred . . . in the restoration or replacement of natural resources damaged or destroyed as a result of a discharge of oil or a hazardous substance in violation of subsec-tion (b) of this section.”).

59 See 42 U.S.C. § 9607; Eric Hecox, Oil Spills, Clean Water Act § 311, and the Oil Pollution Act, Bureau of Land Mgmt., http://www.blm.gov/nstc/WaterLaws/pdf/Chapter8.pdf (last visited Apr. 15, 2011).


the value of various natural resources, for example, fish, raptors, or drinking water.60 All that changed following the grounding of the Exx-on Valdez in Prince William Sound, Alaska.61 In response to the Valdez spill, Congress passed the OPA, and in the process incorporated CER-CLA’s natural resources damages provisions.62 However, a question remained regarding the appropriate method for calculating natural resources damages. The Department of Interior promulgated regulations pursuant to CERCLA that assessed natural resources damages as the lesser of either lost use value, calculated as market value, or replacement value.63 Those regulations were subse-quently challenged, and the calculation of damages based only on market value was found to be in violation of CERCLA’s clear statutory command.64 Nonetheless, there remain a number of different ways to assess the value of natural resources.65 Five such valuation methodologies are de-scribed below.

C. Methods of Valuing Natural Resources66

1. Contingent Valuation Methodology

Contingent Valuation Methodology (CVM) is an empirical tech-nique in which a survey or questionnaire is developed and used to value a given natural resource and its ecological services.67 The survey or poll is used to sample a segment of the population.68 Its results are then em-

60 See James Peck, Comment, Measuring Justice for Nature: Issues in Evaluating and Litigat-ing Natural Resources Damages, 14 J. Land Use & Envtl. L. 275, 277–78 (1999).

61 See id. at 275, 277–78. 62 33 U.S.C. § 2706; see Natural Resource Damages: A Primer, Envtl. Prot. Agency, http://

www.epa.gov/superfund/programs/nrd/primer.htm (last visited Apr. 15, 2011). 63 See Ohio v. U.S. Dep’t of Interior, 880 F.2d 432, 438 (D.C. Cir. 1989). This opinion

was handed down approximately four months following the Exxon Valdez. See id. 64 See id. at 442. 65 See Peck, supra note 60, at 277 (describing various methods of natural resources as-

sessment). 66 A full discussion of valuation methodologies is beyond the scope of this Article. See

generally Peck, supra note 60 (an excellent discussion of this topic); Kathryn Chelina Mac-Donald, Comment, The Recovery of Restoration Costs: Analytical Synthesis of Common-Law Prop-erty Damages, Restitution, and Natural Resource Damages Under CERCLA, 5 Tul. Envtl. L.J. 255 (1991).

67 See Peck, supra note 60, at 284 (citing William D. Schulze, Use of Direct Methods for Valuing Natural Resource Damages, in Valuing Natural Assets, The Economics of Natu-ral Resource Damage Assessment 204, 207 (Raymond J. Kopp & V. Kerry Smith eds., 1993)).

68 Id.


ployed to furnish the price that the members of that population are will-ing to pay to sustain or reestablish that resource.69 Thus, CVM does not measure value directly.70 Rather, it is an experiential economic proce-dure, which is employed to support a perceived measure of damages, based on the costs of restoration.71 CVM is also utilized in evaluating the soundness of calculating nonuse values.72 The validity of this technique as a measure of the value of a natural resource was upheld by the Dis-trict of Columbia Circuit in Ohio v. United States Department of the Inte-rior.73 In Ohio, the Court recognized two broad standards for utilizing contingent valuation.74 They are: (1) restoration of the resource;75 and (2) payment of damages for “nonuse value.”76 Accordingly, damages must be assessed by measuring the “restoration costs” of a natural re-source rather than by only measuring its “use values.”77

2. The Market Valuation Approach

The Market Valuation Approach (MVA) to natural resources valua-tion “provides a relatively certain measure of resource value, as market value is reflected in the price for resources as traded in a definable mar-ket.”78 However, “‘most government resources, particularly resources for which natural resource damages would be sought[,] may often have no market.’”79 Due to the limited number of definable markets for natural resources, market valuation has limited applicability.

3. Restoration and Replacement Cost

The Restoration and Replacement Cost (RRC) approach directly measures the cost of restoring of a damaged natural resource and ad-dresses the injury to a natural resource.80 “Restoration cost is the only valuation method that accounts for the uniqueness of each particular

69 Id. 70 See id. at 284–85 (discussing criticisms of CVM). 71 See id. 72 See Ohio v. U.S. Dep’t of Interior, 880 F.2d 432, 474–75 (D.C. Cir. 1989). 73 Id. at 478. 74 See id. at 474–78. 75 See id. at 478. 76 See id. at 474–76. 77 See id. at 474–78. 78 Peck, supra note 60, at 282. 79 Ohio v. Dep’t of Interior, 880 F.2d at 463 (quoting the Department of Interior’s CER-

CLA 301 Project Team). 80 Peck, supra note 60, at 283–84.


resource and the finite supply of natural resources . . . .”81 Indeed, the costs of restoration encompass the entire value of a given resource and are therefore an “intrinsic” measure of the extent of the damage to the resource.82 Nevertheless, restoration costs do “not directly measure the value of the damaged resource and can result in costs greatly exceeding the value of the damaged natural resources as measured by other meth-ods.”83

. U

etical example to illustrate this measure.85 Imag-ine, t

value to that on which the spoiled bird habitat

Neve

ve values that are not fully

and looking at a blue whale, a seal, or a seabird and their habitats.

4 se Value Methodology

Use Value Methodology (UVM) estimates the lost value of using a given resource after damage or destruction.84 In Ohio, the court posed the following hypoth

he court asked,

a hazardous substance spill that kills a rookery of fur seals and destroys a habitat for seabirds at a sealife reserve. The lost use value of the seals and seabird habitat would be measured by the market value of the fur seals’ pelts (which would be ap-proximately $15 each) plus the selling price per acre of land comparable inwas located.86

rtheless, the court held that,

[w]hile it is not irrational to look to market price as one factor in determining the use value of a resource, it is unreasonable to view market price as the exclusive factor, or even the pre-dominant one. From the bald eagle to the blue whale and snail darter, natural resources hacaptured by the market system.87

Some of the non-market values include the enjoyment of sitting along the shoreline, in a boat in a marsh, or a boat in the Gulf,

81 Id. at 283. 82 Id. 83 Id. (emphasis added). 84 Ohio v. Dep’t of Interior, 880 F.2d at 438. 85 See id. at 442. 86 Id. (citation omitted). 87 Id. at 462–63 (first emphasis added).


5. Habitat Equivalency Analysis

Habitat Equivalency Analysis (HEA) is a methodology used to de-termine compensation for resource injuries.88 “The principal concept underlying the method is that the public can be compensated for past losses of habitat resources through habitat replacement projects provid-ing additional resources of the same type.”89 Trustees have previously used HEA for oil spills, including the 1997 Lake Barre, Louisiana pipe-line spill.90 “Habitats involved in these analyses include seagrasses, coral reefs, tidal wetlands, salmon streams, and estuarine soft-bottom sedi-ments.”91 “Man is inextricably linked to the ecosystem and can, there-fore, be considered one of the benefactors of the services provided; however, human uses are not the focus of HEA.”92

6. Difficulties in Calculating Natural Resources Damages

The take-away from the foregoing methodologies is that even the generous restoration cost method does not, and cannot, measure the exact value of the impaired resource.93 Moreover, restoration costs can result in costs which some have posited “greatly . . . exceed[] the value of the damaged natural resources as measured by other methods. It is generally accepted that a measure of damages that is disproportionate to value is contrary to the policy of promoting economic efficiency.”94 Additionally, calculating restoration costs can raise a host of technical issues.95 For example, where does one set the baseline condition? What restoration techniques are suitable? What level of restoration will be deemed sufficient?96 Finally, there may be some situations where habi-

88 La. Oil Spill Coordinators Office et al., Damage Assessment and Restora-

tion Plan: Texaco Pipeline Inc. Crude Oil Discharge 36 (1999) [hereinafter Damage Assessment Report], available at http://www.gc.noaa.gov/gc-rp/lakebarredarpfinal.pdf.

89 Nat’l Oceanic & Atmospheric Admin., Habitat Equivalency Analysis: An Over-view 1 (2006) [hereinafter Habitat Equivalency Analysis], available at http://www. darrp.noaa.gov/library/pdf/heaoverv.pdf.

90 See Damage Assessment Report, supra note 88, at 5, 36 (“This Damage Assessment and Restoration Plan (DARP) has been prepared by state and federal natural resource Trustees to address the restoration of natural resources and resource services injured by the Texaco Pipeline Company Lake Barre oil spill on May 16, 1997 . . . .”).

91 Habitat Equivalency Analysis, supra note 89, at 1. 92 Restoration Economics: Habitat Equivalency Analysis, Nat’l Oceanic & Atmospheric

Admin., http://www.csc.noaa.gov/coastal/economics/habitatequ.htm (last visited Apr. 15, 2011).

93 Peck, supra note 60, at 283. 94 Id. 95 Id. 96 Id.


tats have suffered so much damage that restoring “various ecosystem functions may not be possible.”97

III. The Federal Natural Resources Trustees’ Current Methodology for Valuing Natural Resources Damages

In both CERCLA and OPA, Congress authorized the President to designate natural resources trustees (“Trustees”)98 to act on the pub-lic’s behalf.99 In turn, the President designated the Secretary of the Department of Commerce to

act as trustee for natural resources managed or controlled by DOC [the Department of Commerce] and for natural re-sources managed or controlled by other federal agencies and that are found in, under, or using waters navigable by deep draft vessels, tidally influenced waters, or waters of the con-tiguous zone, the exclusive economic zone, and the outer continental shelf.100

The Secretary then delegated the trusteeship to the Department’s Na-tional Oceanic and Atmospheric Administration (NOAA).101 “As the primary Federal natural resource trustee for coastal re-sources, NOAA has responsibility for ensuring the restoration of coastal resources injured by releases of hazardous materials and of national

97 Id. 98 The President’s power to act derives from the public trust doctrine, pursuant to

parens patriae power. See Deborah G. Musiker et al., The Public Trust and Parens Patriae Doc-trines: Protecting Wildlife in Uncertain Political Times, 16 Pub. Land & Resources L. Rev. 87, 89 (1995). The public trust doctrine refers to the sovereign’s duty—whether federal or state—to maintain and preserve natural resources for the public’s benefit, and thus the doctrine specifies that natural resources belong to the public as a whole. See, e.g., Darren K. Cottriel, The Right to Hunt in the Twenty-First Century: Can the Public Trust Doctrine Save an American Tradition?, 27 Pac. L.J. 1235, 1261 (1996). Alternatively, the term parens patriae signifies the government’s role as the guardian of its citizens’ natural resources, such as rivers, bayous, and wildlife. See Musiker, supra at 101–02. See generally Maine v. M/V Tamano, 357 F. Supp. 1097 (D. Me. 1973) (injury caused to coastal waters and marine life by an oil spill can be the basis for damages in parens patriae suit).

99 OPA, 33 U.S.C. § 2706(b)(2) (2006) (“The President shall designate the Federal of-ficials who shall act on behalf of the public as trustees for natural resources . . . .”); CER-CLA, 42 U.S.C. § 9607(f)(2)(A) (2006) (“The President shall designate . . . the Federal officials who shall act on behalf of the public as trustees for natural resources . . . .”).

100 40 C.F.R. § 300.600(b)(1) (2010). 101 Trust Resources, U.S. Envtl. Prot. Agency, http://www.epa.gov/superfund/pro-

grams/nrd/trust_r.htm#doc (last updated Mar. 25, 2011) (“The DOC Secretary delegated Trustee responsibility to the Administrator of the National Oceanic and Atmospheric Ad-ministration.”).


marine sanctuary resources injured by physical impacts.”102 NOAA has rejected the use of CVM, preferring two other appraisal approaches: “resource-to-resource or service-to-service” and “valuation.”103 When employing the “resource-to-resource or service-to-service” methodol-ogy, the Trustees establish the design of the restoration project in order to provide new services that are comparable to those that were de-stroyed due to resource damage.104 Thus, the new resources or services simply replace those that were lost.105 Accordingly, assume the follow-ing scenario: an oil spill damages five acres of wetlands. The restorative remedy will encompass the responsible party’s payment for, or in the alternative, the creation of, an equivalent five-acre wetland parcel. However, in order for this approach to be applicable, the new services must be “of the same type and quality” as the services that were lost.106 When replacement services are not analogous to lost services, Trustees are required to use a “valuation methodology” for scaling re-storative plans.107 Here the Trustees have two choices: a “value-to-value” procedure, or a “value-to-cost” method.108 NOAA’s “preferred version of the valuation approach . . . [is the] ‘value-to-value,’ [because it] scales a project by adjusting the size of a restoration action to ensure that the present discounted value of project gains equals the present discounted value of the interim losses.”109 This methodology assesses the value of both ecological services lost and services supplied under the restoration plan when calculating total value.110 “Trustees achieve the correct scale when the value of services lost equals the value of new services provided under the restoration plan.”111 In the BP Horizon case, NOAA, the Department of Interior, and the State of Louisiana will therefore have to ask how much a Louisiana

102 See About Relevant Laws: NOAA’s Legal Authorities for Restoring Coastal Resources, Nat’l

Oceanic & Atmospheric Admin., http://www.darrp.noaa.gov/about/laws.html (last up-dated July 19, 2010).

103 See 15 C.F.R. § 990.53(d)(2)–(3) (2011). 104 See id. 105 See id. 106 See id. 107 See Nat’l Oceanic & Atmospheric Admin., Scaling Compensatory Restora-

tion Actions: Guidance Document for Natural Resource Damage Assessment Un-der the Oil Pollution Act of 1990, at xii (1997) [hereinafter NOAA Guidance Docu-ment], available at http://www.darrp.noaa.gov/library/pdf/scaling.pdf.

108 Id. 109 Id. 110 Dale B. Thompson, Valuing the Environment: Courts’ Struggles with Natural Resource

Damages, 32 Envtl. L. 57, 67 (2002). 111 See id.


Brown pelican is worth. Or, what is the value of an acre of wetlands? Or for that matter a turtle? However, these types of “value” assessments are wrong because they look at the “damage” in isolation from the ecosys-tem.112 Indeed, when an ecosystem is damaged or destroyed as is the case in the Gulf Coast, especially in the south Louisiana portion of the Gulf, the entire system must be assessed.113 Otherwise, the piecemeal technique of valuing each natural resource is akin to a medical doctor discovering that a patient has cancer, and focusing on only on an initial tumor—that is, missing the forest for the trees.

IV. The Natural Resource Damage Assessment Process

Under OPA’s Natural Resource Damage Assessment (NRDA) pro-cess, the Trustees have the authority to identify potential restoration projects and solicit public comment on such projects before finalizing the restoration plan.114 The NRDA “is the process of quantifying mone-tary damages for injuries to wildlife, habitat, and the services they pro-vide, in the event of an oil spill or other pollution event.”115 Since the Valdez oil spill and OPA’s passage, NRDA has ripened into a distinct and well-developed field, with its own legal precedents, economic lit-erature, and case histories.116 These are discussed below. The trustees must follow specific mechanics to carry out their NRDA responsibilities. They must: (1) assess the damages to natural resources; (2) develop and implement a plan to restore, rehabilitate, or replace damaged natural resources; and (3) request the Attorney Gen-eral of the United States to commence civil or criminal litigation against the responsible parties.117 According to the Trustees, the full extent of potential injuries from the Gulf disaster is currently unknown, and may not be known for some

112 James L. Nicoll, The Irrationality of Economic Rationality in the Restoration of Natural Re-

sources, 42 Ariz. L. Rev. 463, 470–71 (2000). 113 See generally Steve Hampton & Matthew Zafonte, Calculating Compensatory Restoration

in Natural Resource Damage Assessments: Recent Experience in California (2002) (unpub-lished manuscript prepared for the Proceedings of 2002 California World Oceans Conference, Santa Barbara, CA), available at nrm.dfg.ca.gov/FileHandler.ashx?DocumentID=22112.

114 See, e.g., Gen. Electric Co. v. U.S. Dep’t of Commerce, 128 F.3d 767, 770–71 (D.C. Cir. 1997).

115 See Hampton & Zafonte, supra note 113, at 1. 116 See generally Gen. Electric Co., 128 F.3d 767 (discussing the legal steps of the NRDA);

Charles B. Anderson, Damage to Natural Resources and the Costs of Restoration, 72 Tul. L. Rev. 417 (1997) (detailing the legal process for creating the NRDA); Nicoll, supra note 112 (arguing that restoration should not take into account economic values).

117 40 C.F.R. § 300.615 (2010).


time.118 However, pursuant to the “Notice of Intent to Conduct Resto-ration Planning,’’ as of August 19, 2010, the Trustees had documented oil on more than 950 miles of shoreline, including “salt marshes, sandy beaches, and mangroves.”119 Furthermore, as of June 29, 2010, the Trustees identified over 1900 live oiled birds and 400 live oiled sea tur-tles.120 They had also collected more than 1850 visibly oiled dead birds, seventeen visibly oiled dead sea turtles, and five visibly oiled dead ma-rine mammals.121 As could be expected, in the first few months following the spill, these numbers increased.122 Therefore, in contrast, on August 13, 2010, it was reported that there were 4768 dead animals, “4,080 of these were birds and 525 sea turtles.”123 Over 8332 species lived within the vicinity of the oil spill, including “the endangered Kemp’s Ridley turtle, as well as more than 1,200 fish, 200 birds, 1,400 molluscs, 1,500 crustaceans, and 29 marine mammals and three other sea turtle specimens.”124 Dis-hearteningly, in October 2010, federal on-scene Coordinator Admiral Paul Zukunft observed: “We did have you know certainly a loss of wild-life, but in comparison we had about 2300 dead oil birds and Exxon Val-dez, that number was nearly 225,000.”125 These numbers represent only a portion of the wildlife that have been impacted by the spill, and the restoration planning process will further refine the total impact of this spill on the habitats and animals in the Gulf.126

118 Discharge of Oil From Deepwater Horizon/Macondo Well, Gulf of Mexico; Intent

To Conduct Restoration Planning, 75 Fed. Reg. 60,800, 60,801–02 (Oct. 1, 2010). 119 Id. at 60,802. 120 Id. 121 Id. 122 Paul Rioux, Oil Spill Plugged, but More Oiled Birds than Ever are Being Found, Times-

Picayune (Aug. 8, 2010, 10:00 AM), http://www.nola.com/news/gulf-oil-spill/index.ssf/ 2010/08/oil_spill_plugged_but_more_oil.html.

123 Jarvis, supra note 4. 124 Id. 125 Melanie Driscoll, How Many Birds Died in the BP Oil Spill?, Audubon Mag. Blog

(Oct. 28, 2010), http://magblog.audubon.org/how-many-birds-died-bp-oil-spill. 126 See Discharge of Oil From Deepwater Horizon/Macondo Well, Gulf of Mexico; In-

tent To Conduct Restoration Planning, 75 Fed. Reg. at 60,802. (“The full nature and ex-tent of injuries will be determined during the injury assessment phase of restoration plan-ning.”).


A. Wrong Again! The Downside of the Natural Resources Restoration Process

Initially, environmentalism was built on a simple but radical principle: let nature be. The hope was that science could point the way to measures that would let nature co-exist with human exploitation.127

The process that the national Trustees currently employ to assess natural resources damages barks up the wrong tree. What is more, the system is beset with biological faults. First and foremost, it simply ig-nores the reality of ecosystems as “dynamic, interacting complexes of living organisms and their nonliving environment within a defined ar-ea.”128 Rather its focus is on individual natural resources like fish, air, and water.129 This is particularly true of the UVM, RRC, and MVA methodologies.130 Similarly, the resource-to-resource methodology strikes one as a puerile and impractical way to measure the value of a natural resource. For example, in the restoration following a 1997 pipeline spill in Lake Barre, also in south Louisiana, where marsh grasses were destroyed, the Trustees’ remedy was to plant marsh grass on East Timbalier Island some fifteen miles to the southeast.131 Lake Barre is located in Terre-bonne Parish, while East Timbalier Island is located in LaFourche Par-ish. “Several [local] commenters objected to the project based on its location in Lafourche Parish. They wanted a project to be done in Ter-rebonne Parish. . . . [and] more local participation in the process, and suggested that the Trustees should have specifically requested restora-tion ideas from the parish.”132 However, this option was rejected as un-workable.133

127 Holly Doremus & A. Dan Tarlock, Science, Judgment, and Controversy in Natural Re-

source Regulation, 26 Pub. Land & Resources L. Rev. 1, 1 (2005). 128 The H. John Heinz III Ctr. for Sci., Econ. and the Env’t, The State of the

Nation’s Ecosystems 2008: Measuring the Lands, Waters, and Living Resources of the United States 3 fig.2 (2008), available at http://www.heinzctr.org/ecosystems/ 2008report/pdf_files/Highlights_Final_low_res.pdf.

129 See, e.g., 33 U.S.C. § 2701(20) (2006). 130 See supra Part II.C. 131 Damage Assessment Report, supra note 88, at 5, 52 (“Based on the ranking, the

Trustees determined that marsh enhancement (planting) on East Timbalier Island was the preferred marsh restoration alternative to compensate for injuries from the Lake Barre incident . . . .”).

132 Id. at 14 (“T]he Trustees considered the proximity of restoration alternatives to the location of the spill. The preferred project was considered to be within a reasonable dis-tance (< 18 miles) from the site of the spill, and was located within the same watershed.”).

133 See id.


What benefits accrue to the local ecology and the people who use that ecosystem by planting marsh grass some fifteen miles away, in an-other county? Is this type of remedy a common sense one as a substitute for the marsh grass destroyed? Why would the Trustees not make every effort to include “local participation in the effort”?134 Additionally, the Trustees did not, and in fact could not, argue that the Lake Barre res-toration project could not have restored an area adjacent to the de-spoiled marsh grass because it could not be brought back to life for a decade. Why? Because, in their Restoration Plan, they in fact assert that the marsh grass in the spill area was growing back naturally.135

B. Valuation and Scaling: When You Want to Reject Everything Else, Fall Back on Economics

A similar argument can be made against the valuation approach. The choice of a restoration project employs an economic formula called cost-benefit analysis (CBA).136 While the definition of the term “cost-benefit analysis” varies,137 Black’s Law Dictionary defines it as “[a]n analytical technique that weighs the costs of a proposed decision, hold-ing, or project against the expected advantages, economic or other-wise.”138 A cost-benefit analysis requires one to assign a monetary value to the benefits and costs being weighed.139 Often, “future costs and benefits are discounted, or treated as equivalent to smaller amounts of money in today’s dollars.”140 The history and current use of CBA in environmental decision-making, including “whether regulators should use cost-benefit analysis

134 See id. 135 See id. at 6 (“Approximately 4,327 acres of marsh were exposed to oil resulting from

the incident. Most of the exposed marsh was determined to be fully functioning or recov-ering to full functioning within four months after the release. Marsh function in approxi-mately 162 acres was affected for a longer period but was expected to be fully recovered two years following the incident, except for a total of 0.28 acres that lost virtually all above-ground biomass.”).

136 Nicoll, supra note 112, at 479. 137 Richard A. Posner, Cost-Benefit Analysis: Definition, Justification, and Comment on Con-

ference Papers, in Cost-Benefit Analysis: Legal, Economic, and Philosophical Per-spectives 317, 317 (Matthew D. Adler & Eric A. Posner eds., 2001).

138 Black’s Law Dictionary 399 (9th ed. 2009). 139 See Frank Ackerman & Lisa Heinzerling, Pricing the Priceless: Cost-Benefit Analysis of

Environmental Protection, 150 U. Pa. L. Rev. 1553, 1557–58 (2002). 140 Id. at 1559.


in evaluating their decisions” has been quite “contentious.”141 This is because CBA

requires that the costs and benefits of a proposed course of action (including benefits such as saving human lives and pro-tecting human health) be quantified and then translated into dollar terms. Cost-benefit analysis of proposed regulations is said to be necessary in order to avoid adopting inefficient rules that would impose ruinous economic costs.142

The basis for the use of economic techniques such as CBA, and the field of law and economics generally, is rooted in the University of Chi-cago Law School of the 1960s.143 It began with Ronald Coase144 who was followed by others at Chicago, including now Judge Richard Pos-ner145 and Cass Sunstein.146 Each in his own way pushed CBA into both the legal and public marketplace of ideas. However, the crossover from academic theory to use in government made its way into the regulatory framework only after President Ronald Reagan’s director of the Office of Management and Budget (OMB), David Stockman,147 pushed CBA as part of President Reagan’s regulatory revolution.148 Soon after entering office in 1981, President Reagan issued Execu-tive Order 12,291, which set in motion the cost-benefit analysis of envi-ronmental regulations.149 For example, section 2 of the order provides:

[] Regulatory action shall not be undertaken unless the po-tential benefits to society for the regulation outweigh the po-tential costs to society; [] Regulatory objectives shall be cho-

141 See Frank Ackerman et al., Applying Cost-Benefit to Past Decisions: Was Environmental

Protection Ever a Good Idea?, 57 Admin. L. Rev. 155, 155 (2005). 142 Id. 143 The John M. Olin Program in Law and Economics, U. Chi. L. Sch., http://www.law.

uchicago.edu/Lawecon (last visited Apr. 15, 2011). 144 Ronald H. Coase, U. Chi. L. Sch., http://www.law.uchicago.edu/faculty/coase (last vis-

ited Apr. 15, 2011); see, e.g., R. H. Coase, The Problem of Social Cost, 3 J.L. & Econ. 1 (1960). 145 Richard A. Posner, U. Chi. L. Sch., http://www.law.uchicago.edu/faculty/posner-r

(last visited Apr. 15, 2011); see, e.g., Posner, supra note 137, at 317. 146 Cass R. Sunstein, U. Chi. L. Sch., http://www.law.uchicago.edu/faculty/sunstein/

(last visited Apr. 15, 2011); see, e.g., Cass R. Sunstein, Cost-Benefit Analysis and the Separation of Powers, 23 Ariz. L. Rev. 1267 (1981).

147Former Directors of OMB and BOB, Off. Mgmt. & Budget, http://www.whitehouse.gov/ omb/organization_former_directors/ (last visited Apr. 15, 2011).

148 See Robert W. Hahn & Cass R. Sunstein, A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis, 150 U. Pa. L. Rev. 1489, 1505–06 (2002).

149 See Exec. Order No. 12,291, 3 C.F.R. 127 (1982), reprinted as amended in 5 U.S.C. § 601 app. at 431 (1982).


sen to maximize the net benefits to society; [and] Among al-ternative approaches to any given regulatory objective, the al-ternative involving the least net cost to society shall be chosen.150

These vacuous standards—after all, what standard should one use to decide “the alternative involving the least net cost to society” —were then imposed as part of President Reagan’s attempt to dismantle the envi-ronmental regulatory scheme that Congress had labored to establish for the previous eleven years.151 As Rena Steinzor has observed, cost-benefit analysis has failed.152

V. Cost-Benefit Analysis Has Failed

Cost-benefit analysis has been the primary means of “assess[ing] the costs and benefits of regulation” for the past twenty years.153

But its use has come under sharp criticism from those who point out that it has been used as a tool to stymie health, safe-ty and environmental regulation. That was never truer than during the [George W.] Bush years, but in fact cost-benefit was a significant barrier to progress even during the more regulation-friendly Clinton Administration. The idea of quantifying costs and benefits, and then weigh-ing them against each other sounds logical in theory, but it works terribly in the realm of regulating health and environ-mental protections.154

Indeed, a recent study found that the use of CBA would have resulted in the wrong outcome in three environmental regulatory decisions: “the removal of lead from gasoline in the 1970s and 1980s, the decision not to dam the Grand Canyon for hydroelectric power in the 1960s, and the strict regulation of workplace exposure to vinyl chloride in 1974.”155 Thus, from an environmental policy-making perspective, the purpose of an agency’s data gathering and application of the scientific method is to “support regulatory and management decisions . . . [which] must

150 Id. (emphasis added). 151 Id. (emphasis added); see Philip Shabecoff, Reagan Order on Cost-Benefit Analysis Stirs

Economic and Political Debate, N.Y. Times, Nov. 7, 1981, at 28. 152 Memorandum from Rena Steinzor, President, Ctr. for Progressive Reform, to Editorial

Page Editors and Writers, at 1 (May 7, 2009), available at http://www.progressivereform.org/ articles/Sunstein_CBA_EdMemo_050709.pdf.

153 See Hahn & Sunstein, supra note 148, at 1489–90. 154 Memorandum from Rena Steinzor, supra note 152, at 1. 155 Ackerman et al., supra note 141, at 156.


be insulated to the extent feasible against the vagaries of the political world.”156 The CBA process—rooted in economics—is a political tool, not a scientific one.157 CBA is a methodology that looks solely at costs and benefits.158 But for whose cost and for whose benefit? Will it be used for the benefit of the wildlife that will need to remake its home in south Louisiana? Will it be for the destroyed marshes or for the Cajun and native tribes of south Louisiana? Alternatively, will the benefit be for that nebulous mass referred to by politicians as the “American People”? If the cost has to be borne by the people of Portland, Oregon or Portland, Maine, will they be willing to pick up the costs for the benefit of people who live thousands of miles away from them? Will they be ready to pony up the funds necessary to restore one of the great treas-ures of the lower forty-eight? And what if they are not? Will the federal government still be willing to step up and do what is right for south Louisiana, despite the political ramifications? Remember to keep your eye on that enterprise, as the future rolls around. What is more, if these are the questions that are still being asked, America has made little progress since the last large-scale well blowout in the lower forty-eight occurred: the 1969 Union Oil Santa Barbara Channel spill, which, in part, heralded the beginning of the environmental age.159

A. Habitat Equivalency Analysis: Ecological Isolationism

No less flawed is the HEA technique, whereby the Trustees seek to resuscitate habitats—defined as “the specific areas within the geo-graphical area occupied by the species . . . on which are found those physical or biological features . . . essential to the conservation of the species.”160 In HEA, the Trustees analyze habitats in isolation from the entire ecological framework.161 Moreover, one perspective of the NRDA process is via the “services provided” to people and not to the species, ecology, or the environment.162 In other words, the process is anthro-

156 See Holly Doremus, Using Science in a Political World: The Importance of Transparency in Natural Resource Regulation, in Rescuing Science from Politics: Regulation and the Distortion of Scientific Research 143 (Wendy Wagner & Rena Steinzor eds., 2006).

157 See Frank Ackerman & Lisa Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing 9 (2004).

158 See Ackerman et al., supra note 141, at 155. 159 See Elizabeth Kolbert, Oil Shocks, New Yorker, May 31, 2010, http://www.new

yorker.com/talk/comment/2010/05/31/100531taco_talk_kolbert. 160 See Endangered Species Act of 1973, 16 U.S.C. § 1532(5)(A) (2006). 161 See supra Part II.C.5. 162 See NOAA Guidance Document, supra note 107, at xii.


pomorphic.163 The HEA procedure therefore veers away from the ethos that the natural resources are valuable or even “holy” in and of themselves.164

This assessment or perception by the Trustees wholly ignores the value of species that the drafters of the Endangered Species Act under-stood at the time of its passage in 1973.165 Thus, HEA not only ignores the realities of ecosystems, but it looks backwards to an archaic age where nature and “natural resources” existed solely to serve man. This outdated view is obvious from the first definition of “natural resources” in Black’s Law Dictionary: “Any material in its native state which when extracted has economic value . . . .”166

B. Congressional Intent: “Natural Resources” Indicative of the Whole Ecosystem

Finally, using a statutory interpretation analysis, the methodologies employed by the Trustees appear to be ultra vires, because CERCLA’s legislative history refers solely to “natural resources,” referring to the eco-system as a whole, not “natural resource,” referring to each individual component of the ecosystem.167 For example, in the House of Repre-sentatives, Representative Jones asserted the following in unequivocal terms: “[t]he purpose of the regime, rather, is to make whole the natu-ral resources that suffer injury from releases of hazardous substances.”168 Similarly, on the Senate side, Senator Mitchell, who shepherded the natural resources section of CERCLA through the Senate, emphasized that “we do not want damage to natural resources to await the workings of that [common-law tort litigation] process.”169 Likewise, Senator Williams declared “[t]he legislation will provide for the restoration of natural re-sources which have been damaged.”170 and Senator Chaffee said “[t]he provision . . . for restoration of damaged natural resources remains in the legislation we are considering today.”171 Thus, I posit that the reference

163 See id. 164 See Steven S. Kimball, Forest Fire Damages in Transition, Fed. Law., Aug. 2009, at 38,

43 (“HEA is a mathematical model . . . [t]he analysis is complex and formula-driven in application.”).

165 See 16 U.S.C. §1531(b) (2006). 166 Black’s Law Dictionary 1027 (6th ed. 1990). 167 See 132 Cong. Rec. H9612–13 (daily ed. Oct. 8, 1986) (statement of Rep. Jones).

OPA adopted the same approach as CERCLA towards natural resources damages. See supra Part II.B.

168 132 Cong. Rec. H9612–13 (emphasis added). 169 126 Cong. Rec. 30,941–42 (1980) (emphasis added). 170 Id. at 30,970 (emphasis added). 171 Id. at 30,971–72 (emphasis added).


to “natural resources” is to the sum of those resources or the entire ecosystem. Otherwise, why would these legislators have referred to natural resource in the plural? Had they meant to refer to individual resources, I believe that they would have indicated “each natural resource.”

Conclusion

Agencies may be subject to focused political pressures that drive their preferences in directions that reflect special interests rather than the public interest. Even if agency personnel are firmly dedicated to pursu-ing the public interest, intense and focused political pressures may cause them to misinterpret that interest. The result is a high potential that regulatory decisions will reflect the goals and political sensitivities of bureaucrats and legislators rather than those of the electorate.172

The BP Horizon oil spill is just the latest environmental and eco-logical assault visited upon south Louisiana that resulted from Amer-ica’s insatiable thirst for oil. Of course, the adherents of cost-benefit analysis may argue that the benefits of drilling for oil at “home” far outweigh the benefits that some coastline, marshes, and a few thousand birds, mammals, turtles, and other fauna may offer to the people and tourists of south Louisiana.173 They may also argue, according to their own version of prophecy, that in the long run, things will get back to normal. Nevertheless, as experiences from other locales like Prince Wil-liam Sound in Alaska demonstrate, it takes nature a long, long time to heal itself.174 One example of this train of thought was pronounced by Repre-sentative Don Young of Alaska, who is currently the senior Republican on the House Natural Resources Committee.175 When referring to the BP Deepwater Horizon spill in early June 2010, Congressman Young asserted:

This is not an environmental disaster, and I will say that again and again because it is a natural phenomena [sic]. Oil has

172 Doremus, supra note 156, at 145. 173 See G. Kevin Jones, Understanding the Debate over Congressionally Imposed Moratoria on

Outer Continental Shelf Oil and Gas Leasing, 9 Temp. Envtl. L. & Tech. J. 117, 152 (1990) (“The contribution of OCS [outer continental shelf] exploration and production activities to total oil spilled in United States waters has been insignificant and grossly exaggerated.”).

174 See Ott, supra note 5, at 378 (“15+ Years, Recovering . . . Reasons for the delayed recovery include persistent oil effects from oiled habitat and oiled food . . . .”).

175 Biography—Congressman Don Young, House of Representatives, http://donyoung. house.gov/Biography/ (last visited Apr. 15, 2011).


seeped into this ocean for centuries, will continue to do it. During World War II there was over 10 million barrels of oil spilt [sic] from ships, and no natural catastrophe. . . . We will lose some birds, we will lose some fixed sealife, but overall it will recover.176

Mr. Young was assailed for these views.177 But why should he care? He won his seat for a twentieth term in the November 2010 midterm elec-tion.178 Moreover, “[i]n the aftermath of Hurricane Katrina, when Sen. John McCain proposed that Young redirect his prized pork money to help rebuild New Orleans, Young accused his detractors of ‘ignorance and stupidity.’”179 He said the victims of Katrina “can kiss my ear!”180 The long and arduous task, then, is for each of us to pick a small part in reviving the south Louisiana coast and other areas despoiled by humankind. Changing the minds of the “Don Youngs” in the country, or working to have others elected in their place, is one manageable part of this task. If we all work together, we will be able to conquer the greatest of apathies and ignorance. We can return the beauty of south Louisiana that our generation and previous generations have toiled to destroy, while allowing the people of the region to fashion a natural resources remedy that will be a hallmark of things to come. And, whether we believe in God or not, we can—each of us—declare at the end of the day that we worked to fulfill the Jewish concept of tikkun olam: “repair [of] the earth.”181

176 Don Young: Gulf Spill ‘Not an Environmental Disaster’, Anchorage Daily News ( June 2,

2010, 9:01 AM), http://www.adn.com/2010/06/02/1304209/don-young-gulf-oil-spill-not-an. html (emphasis omitted) (internal quotation marks omitted).

177 See, e.g., id. 178 Mark Thiessen, Young’s 20th Win for House Overshadowed by Senate Race, Anchorage

Daily News (Nov. 3, 2010, 5:27 PM), http://www.adn.com/2010/11/02/1531664/crawford- young-vie-for-house-seat.html.

179 Tim Dickinson, The Ten Worst Congressmen, Rolling Stone Politics Daily Blog (Oct. 19, 2006, 3:25 PM), http://www.rollingstone.com/politics/blogs/national-affairs/ the-ten-worst-congressmen-20061019 (follow hyperlink under “Don Young”); see also Lisa Demer, Young Headed to Victory, Anchorage Daily News (Nov. 5, 2008 8:01 AM), http:// www.adn.com/2008/11/05/579001/young-headed-to-victory.html.

180 Dickinson, supra note 180. 181 Peter Steinfels, Beliefs; Of Talmudic Texts and Tomato Plants, N.Y. Times ( Jan. 17, 2004),

http://www.nytimes.com/2004/01/17/national/17BELI.html.

FIVE THOUSAND FEET AND BELOW: THE FAILURE TO ADEQUATELY REGULATE

DEEPWATER OIL PRODUCTION TECHNOLOGY

Mark A. Latham*

Abstract: Oil and gas production in the Gulf of Mexico is an important aspect of our domestic energy strategy, and to successfully obtain oil from deep beneath the ocean floor, in thousands of feet of water, an impressive array of technology is utilized by the oil and gas industry. One of the many lessons learned, however, from the Deepwater Horizon disaster is that this technology can present significant risks to human life and the environ-ment if it fails. This Article presents an overview of the technology used to conduct deepwater oil and gas drilling operations, and then examines how the failure to adequately regulate this risky technology played a major role in the Deepwater Horizon catastrophe. This Article also summarizes the actions taken by regulators in response, and questions whether the actions taken are sufficient to prevent another deepwater disaster. The Article concludes by suggesting a number of other actions for consideration by policymakers to reduce the risks associated with producing oil from tens of thousands of feet beneath the ocean’s floor.

Introduction

With current domestic oil output becoming less productive and less reliable,1 petroleum engineers are increasingly searching at depths far beneath the ocean’s surface for potential new deposits of recover-able oil.2 Today, oil companies are conducting exploration and produc-

* © 2011, Mark A. Latham, Professor of Law, Vermont Law School. My deepest thanks to Megan Sigur, Vermont Law School Class of 2012, for her timely and very capable re-sear

U.S. oil production hit its peak. The flow from the big U.S. oil fields beg

ater Gulf of Mexico 2008: America’s Offshore Energy Future 3 (200

ch assistance. 1 See Paul Roberts, The End of Oil: On the Edge of a Perilous New World 42

(2004) (“In 1970, an to taper off, and the number of barrels that the [major oil companies] could bring

out began to fall.”). 2 G. Ed Richardson et al., Minerals Mgmt. Serv., U.S. Dep’t of the Interior,

MMS 2008-13, Deepw8), available at http://www.gomr.boemre.gov/PDFs/2008/2008-013.pdf (defining “deep-

water” activities as those occurring in waters “greater than or equal to 1,000 ft” and “ultra-deep” activities as those occurring at “water depths greater than or equal to 5,000 ft.”).

343


ti activities in the ocean at depths once believed impossible to reach.

on

eepwater oil exploration and rod

lous array of technology is then employed to extract the oil from thou-sands of feet beneath the ocean floor.9 One can certainly marvel at the

3 As the Deepwater Horizon spill demonstrates, this new frontier of oil exploration and production has successfully located recoverable oil deposits thousands of feet below the ocean’s surface.4 The oil pursued through deepwater drilling not only lies below thousands of feet of wa-ter, but also rests in deposits tens of thousands of feet beneath the ocean floor.5 In the United States such dp uction activities are largely confined to the Gulf of Mexico,6 the site of the Deepwater Horizon disaster.7 Tapping into deepwater oil deposits involves remarkable and ever-increasingly sophisticated technology to first locate potential oil re-serves thousands of feet below the ocean’s surface.8 Once a promising source of oil beneath the ocean’s surface is located, an equally miracu-

3 See id. at 9 (“In 2007, a record number of 15 rigs were drilling for oil and gas in water

depths of 5,000 ft (1,524 m) or more in the [Gulf of Mexico]. At least 13 new drilling rigs are being built and contracted for use in the ultra-deepwater Gulf . . . they will be capable of operating in water depths up to 12,000 ft (3,658 m) and drilling to total depths of 40,000 ft (12,192m).”).

4 See id. at 10 tbl.2. 5 Joel K. Bourne, Jr., The Deep Dilemma, Nat’l Geographic, Oct. 2010, at 40, 44 (“BP’s

Macondo well, in about 5,000 feet of water and reaching another 13,000 feet beneath the seafloor, wasn’t particularly deep. The industry has drilled in 10,000 feet of water and to depths of 35,000 feet—the latter a world record just set last year by the Deepwater Horizon in another BP field in the Gulf.”).

6 See Minerals Mgmt. Serv., U.S. Dep’t of the Interior, Deep Water: Where the Energy Is 2 (2004), available at http://www.boemre.gov/Assets/PressConference11152004/ MSGlossySingle_110404.pdf (“With declining production from its near-shore, shallow waters, energy companies have focused their attention on oil and gas resources in water depths of 1,000 feet and beyond. Their progress in developing these resources has made the Gulf of Mexico the focal point of deep water oil and gas exploration and production in the world.”).

7 See Campbell Robertson, 11 Remain Missing After Oil Rig Explodes off Louisiana; 17 Are Hurt, N.Y. Times, Apr. 22, 2010, at A13.

8 See John T. Cuddington & Diana L. Moss, Technological Change, Depletion, and the U.S. Petroleum Industry, 91 Am. Econ. Rev. 1135, 1136 (2001) (“Technological advances such as three-dimensional seismic techniques, polycrystalline diamond compact drill bits, horizon-tal drilling, and offshore platforms capable of operating in hostile, deep-water environ-ments are widely acknowledged to have had significant impact on [oil exploration and development] . . . .”).

9 See Jad Mouawad & Barry Meier, Risk-Taking Rises to New Levels as Oil Rigs in Gulf Drill Deeper, N.Y. Times, Aug. 30, 2010, at A1 (“[T]he Perdido platform is a vast hub that can drill and pump oil from wells across 30 miles of ocean floor. Below it is a subsea cityscape of pumps, pipes, valves, manifolds, wellheads and blowout preventers—all painted a bright yellow so as to be visible to the floodlights of the remote-controlled submarines that main-tain it.”).

2011] Insufficient Deepwater Technology Regulations 345

modern day engineering feats that have allowed for the discovery and extraction of oil from so deep below the ocean. However, the several-months-long Deepwater Horizon oil gusher also taught us that this technology has significant limitations. When this miracle of complex technology fails, there is no readily available and reliable technology to promptly abate a catastrophic, uncontrolled flow of oil.10 This fundamental technological shortcoming is additionally problematic because at the depths deepwater drilling takes place, the ocean is utterly inhospitable to direct human intervention when disas-ter strikes.11 While a confluence of factors from both industry and regulators led to the Deepwater Horizon oil spill,12 there is little doubt that one of the root causes of this catastrophe was a failure of technology. The last line of defense to prevent a spill of this magnitude from occurring at a deep well—a device known as a blowout preventer—utterly failed.13 Deepwater oil, it turns out, presents serious adverse consequences in the event of a catastrophic technological failure. Without the astonishing technology required to find and extract oil from thousands of feet below the ocean’s floor, deepwater would be off limits for oil drilling. We do posses such technology, however, and the Deepwater Horizon catastrophe properly raises questions concern-ing the sufficiency of federal government oversight, particularly the adequacy of regulation over the complex technology utilized in deep-water to extract oil. Indeed, as the events evolved concerning the Deepwater Horizon spill, the agency then responsible for oversight of virtually all aspects of deepwater exploration and production, the Min-erals Management Services (MMS), came under harsh scrutiny, and any claim it may have had as an effective regulatory body shattered.14

10 See id. 11 See id. (“[B]ecause the wells are deeper than human divers can go, oil companies must

rely on remote-controlled submarines to maintain their equipment or perform repairs.”). 12 See Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drill-

ing, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling, at vii (2011) [hereinafter BP Commission Report].

13 Steven Mufson & David A. Fahrenthold, Flaws in Key Oil Rig Device: Harsh Review in House, Wash. Post, May 13, 2010, at A01; Katie Howell, BP Should Have Shutdown Doomed Rig Weeks Before Explosion, Regulator Says, Greenwire, July 20, 2010, available at http://www. eenews.net/Greenwire/2010/07/20/archive/5.

14 Katie Howell, Panel Faults MMS’s Funding Woes, Lack of Political Support, Greenwire, Oct. 13, 2010, available at http://www.eenews.net/eenewspm/2010/10/13/archive/3 (“The presidential panel investigating the BP PLC oil spill said today that federal offshore-drilling regulators’ lack of resources and political backing contributed to the government’s failure to properly oversee the oil and gas industry.”). In a prior investigation of MMS and its regula-


Consequently, not too long after the magnitude of the disaster occur-ring in the Gulf of Mexico became evident, the Secretary of the Inte-rior, Kenneth Salazar, promptly fired the head of MMS and completely restructured the agency.15

I. Deepwater Technology Overview

Among the first deepwater oil production efforts in the Gulf of Mexico was Placid Oil’s attempts in 1984 to recover oil from more than 1500 feet beneath the surface.16 Production results were less than satis-factory, so the wells were eventually abandoned.17 This failed effort at production nonetheless marked a major technological advancement, since it was the first time that a floating platform was used in an effort to retrieve oil from the deep.18 Following Placid’s attempt at deepwater production, the technology associated with offshore oil exploration and production quickly advanced, and opened the Gulf of Mexico as a feasible source of oil.19

A. Locating Deepwater Oil Deposits

Locating oil thousands of feet beneath the surface of the ocean re-quires a combination of technical know-how, complex technology, and luck. At this exploratory stage, perhaps no technology is more impor-tant than three-dimensional seismic technology,20 which relies upon sound waves transmitted by specially equipped vessels to produce a

tion of the oil and gas industry, the Inspector General’s Office for the Department of Interior found a wide range of troubling ethical issues between MMS regulators and industry. See generally Office of the Inspector Gen., U.S. Dep’t of the Interior, Investigative Re-port: Island Operating Company et al. (2010).

15 See generally U.S. Sec’y of the Interior, Order No. 3302, Change of the Name of the Minerals Management Service to the Bureau of Ocean Energy Management, Regulation, and Enforcement ( June 18, 2010), available at http://www.doi.gov/deepwaterhorizon/loader. cfm?csModule=security/getfile&PageID=35872.

16 William L. Leffler et al., Deepwater Petroleum Exploration & Production: A Nontechnical Guide 30 (2003).

17 Id. 18 Id. 19 See id. at 31–34 for a summary of how advances in technology, coupled with a better

understanding of subsurface geology, led to boom in deepwater oil exploration and pro-duction.

20 Id. at 40 (“Seismic data, especially 3D data, is one of the handful of vital enablers that has made deepwater exploration so rewarding. No one ever knows what will turn up when the drillbit hits total depth, but seismic data provides a quantum leap in improving probability of success before the well is drilled. With deepwater wells running up to $100 million, that’s important.”).


three-dimensional record of the subsurface geology.21 This three-dimensional record is then scrutinized by a variety of scientists for geo-logical features strongly suggestive of the presence of oil.22 In describing Chevron’s seismic hunt for oil in the deep, one reporter noted that the company:

[D]eployed ships that cruised through the Gulf, popping off air guns—underwater cannons that emit a gigantic burp into the ocean, bouncing sound waves off under water rock forma-tions. Hydrophones (aquatic microphones) tethered to the vessels recorded the response, taking in hundreds of thou-sands of recordings simultaneously. These allowed the com-pany to determine the composition and shape of the rocks below.23

If the data retrieved from seismic technology is indicative of the likely presence of oil, then the next step is to drill a preliminary well, referred to as a “wildcat,”24 to confirm whether there is oil.

B. Drilling the Production Well

Putting a production well in deepwater is an incredibly challenging endeavor: “[D]rilling a well in 1500 ft of water is comparable to standing on top of the Sears Tower trying to stick a long straw in a bottle of Coke sitting on South Wacker Drive.”25 A reporter related that “[b]uilding an oil well is like building a ship in an opaque bottle, threading massive pipes and intricate tools through a dark, narrow hole.”26 In order to ac-complish such a near impossible feat, a variety of sophisticated, techno-logically complex drilling platforms are available,27 which allow opera-tors to reach oil at depths greater than 25,000 feet beneath the sea floor.28 Because the oil found beneath deepwater is under tremendous pressure, “[p]ressure control sits at the top of the list of worries for the

21 Id. at 41–43. 22 Leffler et al., supra note 16, at 46. 23 Amanda Griscom Little, Oil From The Deep, Wired, Sept. 21, 2007, at 110, 114–17. 24 Leffler et al., supra note 16, at 46–48. 25 Id. at 57–58. 26 Eric Nalder, Disaster in the Gulf: Despite Fatal Blowouts, Changes Come Slowly, Hous.

Chron., July 20, 2010, at A1. 27 Leffler et al., supra note 16, at 57. 28 Id. at 55. The Deepwater Horizon well reached 13,000 feet below the floor of the

Gulf of Mexico. Bourne, supra note 5, at 44.


drilling engineer.”29 To keep well pressure under control, a special heavy fluid, drilling mud,30 is injected through the drillpipe and pre-vents oil and gas from surging uncontrolled through the well.31 Once the well is completed, the drilling mud is replaced with a brine solution that maintains well control.32 Another step taken to control pressure involves pumping cement into the casing once it is in place.33 In this step “cement is pumped down the casing and at the bottom it is forced into the annulus, the space between the casing and the rock.”34 As a final pre-production seal, a cement plug is also placed in the well.35

C. Recovering Oil from the Well

Once the well is in place, the next general phase is production— obtaining oil from the well for refining into a variety of petroleum products such as gasoline, aviation fuel, or diesel fuel. Production, too, involves incredibly complex technology on a massive scale.36 Because the water depth can exceed the reach of fixed platform systems, float-ing systems predominate in deepwater production operations.37 These floating production systems are often coupled with subsea technology in a type of hub-and-spoke arrangement, consisting of a production platform connected to several wells through miles of piping.38 Once recovered, the oil is then transported through a network of undersea pipelines to an onshore refinery for final processing.39

29 Leffler et al., supra note 16, at 58. 30 See John K. Borchardt, Avoiding the Blowout, Mechanical Engineering, Aug. 2010,

at 40, 40. 31 Id. 32 Id. 33 Casing is the tubing that the oil flows through during production. Leffler et al.,

supra note 16, at 61. 34 See Borchardt supra note 30, at 40. 35 Id. at 41. 36 See Matthew Philips, Journey to the Center of the Earth, Newsweek (Mar. 12, 2010), http://

www.newsweek.com/2010/03/11/journey-to-the-center-of-the-earth.html ("Chevron's Tahiti [ultra-deepwater production] platform, about 190 miles offshore, first appears as a speck in open water. Even up close, its size is deceiving. A three-level structure sits above the surface, but its 555-foot hull is entirely submerged. At 714 feet tall and weighing more than 80 million pounds, Tahiti is the equivalent of a 70-story skyscraper floating in 4,000 feet of water.”).

37 See Leffler et al., supra note 16, at 90. 38 See id. at 97, 107–19 (describing the subsea systems used in deepwater oil and gas

drilling). 39 See Richardson et al., supra note 2, at 54, 56–57.


D. The Pressure Control Technology of Last Resort: The Blowout Preventer

In the event that drilling mud or cement fails to control well pres-sure, then the most critical piece of pressure control technology is the blowout preventer.40 A blowout preventer has “three or more sets of hy-draulic devices . . . [and t]he first line of defense is the Hydril or annular preventer,”41 which once activated can seal off the well. Pipe rams are the second line of defense that can stop the flow through the well.42 The final safe guards against the uncontrolled flow of oil through a well are the shear rams that can cut through the drill pipe and seal off the well.43

II. Regulatory Oversight of Blowout Preventer Technology

The regulations applicable to oil exploration and production op-erations in the Gulf of Mexico and other areas of the Outer Continen-tal Shelf are found at 30 C.F.R. part 250, and were administered by MMS when the Deepwater Horizon spill occurred.44 Two aspects of the regulatory approach to pressure control are noteworthy. First, to pre-vent a catastrophic loss of pressure control, the regulations require an operator to “use the best available and safest drilling technology.”45 Second, operators must use blowout preventers to ensure pressure con-trol.46 Consequently, given the MMS mandate to use blowout prevent-ers, the agency considered such equipment as among the “best avail-able drilling technology” vital to maintaining well pressure control.47 Because of this reliance on blowout preventers, one can question whether MMS failed to adequately regulate the one piece of technology relied upon in the industry as a last resort to shut down an out-of-control well. Unfortunately, it appears that the heavy reliance on blow-out preventers as essential fail-safe technology was misplaced, and this directly contributed to the magnitude of the Deepwater Horizon spill.48

40 See Borchardt, supra note 30, at 41 (“Massive pieces of equipment called blowout

preventers are designed to close valves and use shear rams to seal the drill pipe and well casing to block oil and gas from escaping the wellbore. They are the third and final line of defense against a blowout.”).

41 See Leffler et al., supra note 16, at 60. 42 Id. 43 Id.; see also Borchardt, supra note 30, at 41 (“[S]hear rams cut through and crush the

pipe and then form a seal . . . . The ram blades also seal against each other forming a bar-rier blocking fluid flow.”).

44 30 C.F.R. pt. 250 (2010). 45 Id. § 250.401(a). 46 Id. § 250.440. 47 See id. § 250.401(a), 250.440. 48 See id.; BP Commission Report, supra note 12, at 114, 121.


Once the blowout preventer failed, there was no other readily available solution to stop the uncontrolled flow of oil into the Gulf of Mexico.49

A. Prior Blowout Preventer Failures

When one considers the reliability questions that MMS, engineers, and others in the industry raised concerning blowout preventers over the years,50 it is shocking that this technology serves as the final fail-safe mechanism to control well pressure in an emergency. As a starting point in considering the questionable reliability of blowout preventer technology, we must realize that the Deepwater Horizon spill was not some unexpected, unanticipated, rare occurrence. It was an entirely foreseeable event. That is, the Deepwater Horizon was not the first time that a blowout preventer failed to stop a catastrophic flow of oil after pressure control was lost at a well in the Gulf of Mexico.51 In 1979, the Mexican national oil company PEMEX, while con-ducting oil exploration activities at the Ixtoc I well, experienced pres-sure control problems.52 Realizing the critical need to capture well con-trol, the Ixtoc I operators activated the shear rams on the blowout preventer.53 But once activated, the rams failed to shear through the pipe and stem the flow of oil.54 Thus, one lesson from the Ixtoc I spill was that, when most needed, blowout preventers can utterly fail. More recently, in 2009, there was a well blowout off the coast of Australia. The Montara spill raged for more than ten weeks before flow was stopped.55 Although this well was only in 250 feet of water,56 it fur-

49 BP Commission Report, supra note 12, at 114. 50 See David Izon et al., Minerals Mgmt. Serv., Absence of Fatalities in Blowouts Encouraging in

MMS Study of OCS Incidents 1992–2006, Drilling Contractor, July/Aug. 2007, at 84, 84, available at http://www.drillingcontractor.org/dcpi/dc-julyaug07/DC_July07_MMSBlowouts.pdf.

51 See Arne Jernelöv & Olof Lindén, Ixtoc I: A Case Study of the World’s Largest Oil Spill, 10 Ambio 299, 299 (1981).

52 Id. 53 W. Eng’g Servs., Shear Ram Capabilities Study 3-4 (2004) [hereinafter Shear

Ram Capabilities Study], available at http://www.boemre.gov/tarprojects/463/(463) West Engineering Final Report.pdf (“WEST researched known failures to shear and seal and located only the Ixtox 1 blowout and spill off of the Yucatan peninsula. Undoubtedly, there are more failures that were either not reported well or had minimal exposure. Not in-cluded are the known failures to seal during pressure testing since these were repaired prior to the rams being used on the well.”).

54 Id. 55 Keith Bradsher, Relief Well Was Used to Halt Australian Spill, N.Y. Times, May 3, 2010,

at A14. 56 Id.


ther demonstrates the technical difficulties associated with capping a well even in relatively shallow waters. If the Ixtoc I and Montara spills are representative of rare blowout events, perhaps then the reliance by MMS and industry on blowout pre-venters as technology might be understandable. Well blowouts, however, are not unheard-of events. According to MMS data evaluating blowouts on the Outer Continental Shelf, between 1971 and 1991, eight-seven blowouts occurred.57 MMS also found that between 1992 and 2006, an-other thirty-nine blowouts happened.58 While the data show that the number of blowouts decreased over the years, nonetheless, over the thirty-five year period studied by MMS there were a total of 126 blowouts on the Outer Continental Shelf. The data compiled from 1971 through 1991, according to MMS authors, correlated to one blowout for every 246 wells drilled,59 and between 1992 through 2006 the blowout rate was one blowout for every 387 wells drilled.60 Consequently, the potential for a well blowout is startlingly high since there are over 4000 wells in the Gulf of Mexico, and even more alarmingly, 700 of these are in waters deeper than 5000 feet.61

B. MMS Research into and Knowledge of Unreliable Blowout Preventers

For years MMS has been concerned about the effectiveness of blowout preventers as the critical technology in the event well pressure was compromised. A decade before the Deepwater Horizon incident, MMS funded a study to evaluate blowout preventer reliability.62 The study examined a total of 117 failures associated with blowout prevent-ers at eighty-three deepwater wells, and categorized fifty-seven percent of the failures as “safety critical failures.”63 In 2004, MMS retained WEST Engineering Services “to answer the question ‘Can a rig’s blowout preventer (BOP) equipment shear the pipe to be used in a given drilling program at the most demanding

57 Izon et al., supra note 50, at 84. 58 Id. 59 Id. 60 Id. 61 Mouawad & Meier, supra note 9. 62 Per Holand, SINTEF, Reliability of Subsea BOP Systems for Deepwater Appli-

cation, Phase II DW 7 (1999), available at http://www.boemre.gov/tarprojects/319/319AA. pdf (summarizing a reliability study of blowout preventers funded by MMS and performed by Norwegian research group SINTEF).

63 Id. at 85 (“All failures that occur in the BOP after the installation test are regarded as safety critical failures.”).


condition to be expected, and at what pressure?’”64 This was not simply a question of engineering curiosity, since “[t]he well control function of last resort is to shear pipe and secure the well with the sealing shear ram. As a result, failure to shear when executing this final option would be expected to result in a major safety and/or environmental event.”65 The 2004 WEST Engineering study pointed to improvements in drill pipe strength, coupled with the need to use larger, heavier pipe in deepwater drilling, which together “adversely affect[] the ability of a given ram BOP to successfully shear and seal the pipe in use.”66 This concern was more than a theoretical possibility because “WEST is cur-rently aware of several failures to shear when conducting shear tests using the drill pipe that was to be used in the well.”67 Others had also raised concerns about the reliability of blowout preventers. In a paper presented at the 2003 Offshore Technology Conference, the authors noted that “[f]loating drilling rig downtime due to poor BOP reliability is a common and very costly issue confront-ing all offshore drilling contractors.”68 Blowout preventer unreliability has not escaped scrutiny in the Deepwater Horizon congressional investigations. One congressional committee’s investigation noted that “in numerous cases, blowout pre-venters have failed to operate, often with catastrophic consequences. The blowout preventer installed on the Macondo well failed to control the blowout.”69 Not only did at least two studies conducted on behalf of MMS raise serious reliability questions concerning blowout preventer technology, but the agency also warned the offshore oil exploration and production industry about another shortcoming of blowout preventers—the inabil-ity to operate a blowout preventer in the event that primary control is lost.70 In March 2000, MMS issued a notice advising lessees that “[t]he MMS considers a backup BOP actuation system to be an essential com-

64 Shear Ram Capabilities Study, supra note 53, at 1-1. 65 Id. at 3-1 (emphasis added). 66 Id. 67 Id. 68 Earl Shanks et al., Deepwater BOP Control Systems—A Look at Reliability

Issues 2 (2003), available at http://media.mcclatchydc.com/static/pdf/Les-oilspill-ABSC.pdf. 69 Legislation to Respond to the BP Oil Spill and Prevent Future Oil Well Blowouts: Hearing Before

the H. Comm. on Energy & Commerce, 111th Cong. 6 (2010) (Memorandum by Rep. Henry A. Waxman, Chairman, H. Comm. on Energy & Commerce, and Rep. Joe Barton, Member, H. Comm. on Energy & Commerce).

70 See generally Minerals Mgmt. Serv., U.S. Dep’t of the Interior, MMS Safety Alert No. 186: Accidental Disconnect of Marine Drilling Riser (2000), available at http:// www.eenews.net/public/25/15454/features/documents/2010/05/04/document_gw_03.pdf.


ponent of a deepwater drilling system and, therefore, expects OCS op-erators to have reliable back-up systems for actuating the BOP.”71 In sum, there were several red flags about the unreliability of blowout preventers. Nonetheless, they remain the fail-safe device of last resort required by regulation, and the failure of one played a major role in the Deepwater Horizon spill.72

III. The Regulatory Response

Among the regulatory steps taken after the spill was a six-month moratorium on deepwater drilling activities until November 30, 2010.73 Despite the legitimate concerns raised about the ability to conduct deepwater drilling in a safe and environmentally responsible manner, the moratorium was controversial and ultimately was enjoined.74 A sec-ond moratorium was issued shortly thereafter. It, too, was challenged in federal court. Before the court could rule on its validity, however, the second ban was lifted.75 MMS imposed new obligations upon deepwater drill rig operators to reduce the long-term risks associated with deepwater drilling, in par-ticular technology-related regulations.76 These regulations specifically targeted blowout preventers. In sum, these new regulations include: a requirement to certify compliance with existing regulations, signed by the operator’s chief executive officer;77 submission of detailed informa-tion about blowout preventers in use;78 retention of blowout preventer records;79 third-party verification of blowout preventer fitness;80 and the requirement to have in place redundant control mechanisms.81

Similar to the first moratorium, the validity of these new regulations was challenged. The same judge who enjoined the first moratorium found that the new drilling safety obligations issued by the Bureau of

71 Id. 72 See 30 C.F.R. § 250.440 (2010); BP Commission Report, supra note 12, at 114, 121. 73 See Ensco Offshore Co. v. Salazar, No. 10-1941, 2010 WL 4116892, at *1 (E.D. La.

Oct. 19, 2010). 74 See id. at *2. 75 See id. 76 Minerals Mgmt. Serv., U.S. Dep’t of the Interior, NTL No. 2010-N05: Na-

tional Notice to Lessees and Operators of Federal Oil and Gas Leases, Outer Continental Shelf (OCS)—Increased Safety Measures for Energy Development on the OCS 1 (2010) [hereinafter MMS Increased Safety Measures].

77 Id. at 2. 78 Id. at 2–3. 79 Id. at 4. 80 Id. at 3. 81 Id. at 4–5.


Ocean Energy Management, Regulation and Enforcement (BOEMRE) were invalid under the Administrative Procedure Act.82 Perhaps the court’s invalidation of the safety alert requirements will have little practical effect on BOEMRE’s efforts to impose height-ened regulation over deepwater drilling activities. Shortly before the court rejected the new regulations, BOEMRE published an interim fi-nal rule that incorporated most of the safety alert requirements,83 and it became effective upon publication.84 The need to adopt what appear to be such basic common sense regulations, essentially reminders to industry of the need to properly maintain and operate blowout preventers, is further troubling evidence of MMS’s failure to adequately regulate technology. This is especially disconcerting given the critical importance of blowout preventers as the last-in-line, fail-safe mechanism if well control is lost thousands of feet beneath the ocean’s surface. That BOEMRE found it necessary to ob-tain information about precisely what blowout preventers are in use is equally troubling. It reflects a past lack of robust oversight concerning the inherently risky activity of deepwater drilling, because it is strongly suggestive of agency ignorance about exactly what blowout preventers are in use to stop a catastrophic flow of oil from a runaway well. In another post-Deepwater Horizon regulatory development, which serves as another example of less-than-diligent regulatory over-sight, BOEMRE published a final rule requiring deepwater drill rig op-erators to adopt Safety and Environmental Management Systems (SEMS).85 In promulgating this new directive, BOEMRE asserted that “[t]he ultimate goal of SEMS is to promote safety and environmental protection during OCS activities. The protection of human life and the environment are the top priorities and objectives of this rule.”86 These are certainly laudable and important regulatory goals, but when one considers the procedural history of this new rule, it raises additional concerns about the vigor with which MMS regulated deep-

82 MMS Increased Safety Measures, supra note 76, at 4–5. 83 Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Increased

Safety Measures for Energy Development on the Outer Continental Shelf; Final Rule, 75 Fed. Reg. 63,345, 63,346 (Oct. 14, 2010) (to be codified at 30 C.F.R. pt. 250). With the exception of one-time requirements, “[t]his rule incorporates specific details included in 2010-N05 by codifying these into regulations.” Id.

84 Id. at 63,346. 85 Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Safety and

Environmental Management Systems; Final Rule, 75 Fed. Reg. 63,609, 63,610 (Oct. 15, 2010) (to be codified at 30 C.F.R. pt. 250).

86 Id. at 63,644.


water drilling activities. MMS contemplated the need to improve safety and enhance environmental protection of deepwater drilling in 2006, years before the Deepwater Horizon spill occurred.87 It then took sev-eral years for MMS to publish a proposed rule focusing on reducing the potential adverse safety and environmental aspects of deepwater drill-ing.88 The impetus for the proposed rule was an evaluation of more than 1400 incidents that occurred during exploration and production activities on the Outer Continental Shelf, including forty-one fatalities and ten instances where well control was lost.89 Despite the significant safety and environmental concerns that served as the catalyst for the advanced notice of proposed rulemaking and proposed rule, no final rule came forth until almost six months after the Deepwater Horizon disaster resulted in eleven deaths, numerous injuries, and spewed mil-lions of gallons of oil into the Gulf of Mexico.90 Another federal regulatory development, aimed at the heart of MMS, was the decision to split it into three separate bureaus.91 The new structure included BOEMRE, which would assume oversight of Outer Continental Shelf energy resources; the Bureau of Safety and Environ-mental Enforcement, responsible for safety and enforcement; and the Bureau of Natural Resources Revenue, which assumed responsibility for royalties.92 The restructuring of MMS indicated a realization that the single agency approach suffered from insurmountable problems that ren-dered MMS incapable of effectively regulating the oil and gas indus-

87 Oil and Gas and Sulphur in the Outer Continental Shelf (OCS)—Safety and Envi-

ronmental Management Systems; Advanced Notice of Proposed Rulemaking, 71 Fed. Reg. 29,277, 29,277 (proposed May 22, 2006) (to be codified 30 C.F.R. pt. 250).

88 See Safety and Environmental Management Systems for Outer Continental Shelf Oil and Gas Operations, 74 Fed. Reg. 28,639, 28,639 (proposed June 17, 2009) (to be codified at 30 C.F.R. pt. 250).

89 Id. at 28,642. 90 See Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Safety and

Environmental Management Systems, 75 Fed. Reg. at 63,610; BP Commission Report, supra note 12, at vi.

91 U.S. Sec’y of the Interior, Order No. 3299, Establishment of the Bureau of Ocean En-ergy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue (May 19, 2010), available at http://www.doi.gov/deepwaterhori-zon/loader.cfm?csModule=security/getfile&PageID=32475; Press Release, U.S. Dep’t of the Interior, Salazar Divides MMS’s Three Conflicting Missions (May 19, 2010), available at http:// www.doi.gov/news/pressreleases/Salazar-Divides-MMSs-Three-Conflicting-Missions.cfm#.

92 Press Release, U.S. Dep’t of the Interior, supra note 91.


try.93 The agency was entirely too cozy with the industry that it was sup-posed to oversee,94 and also faced an inherent major conflict that pre-vented it from serving as a robust and feared regulatory agency.95 This conflict arose from the dual role that the agency served when regulat-ing the oil and gas industry.96 On the one hand, MMS was responsible for enforcing the regulations governing oil and gas operations in the Outer Continental Shelf.97 On the other hand, MMS was also responsi-ble for the leasing program that authorizes oil and gas production ac-tivities to occur in federal waters.98 The importance of this latter function of the now defunct MMS— auctioning off the rights to search for and produce oil and gas discov-ered in federal waters—is significant. It was a lucrative aspect of MMS, reportedly only exceeded by the Internal Revenue Service as a revenue generating arm of the federal government.99 This duality was at the nub of the agency’s conflicting role; regulate an industry engaged in a highly risky activity, but not with such a heavy hand as to adversely im-pact the revenue stream associated with the agency’s multibillion dollar offshore drilling lease and royalty program. This required a delicate balancing act that perhaps no single agency could perform, so what was once a single agency is now three bureaus.100

IV. Will Interior’s Efforts Avert Another Deepwater Disaster?

Is this new approach adequate to dramatically reduce the risk of another deepwater spill? This is literally a multibillion dollar, life-or-death question, given the devastating consequences that a blowout can

93 See id. (“The Minerals Management Service has three distinct and conflicting mis-sions that—for the benefit of effective enforcement, energy development, and revenue collection—must be divided.”).

94 See, e.g., Juliet Eilperin & Scott Higham, How the Mineral Management Service’s Partner-ship With Industry Led to Failure, Wash. Post (Aug. 24, 2010, 10:14 PM), http://www.washingtonpost.com/wp-dyn/content/article/2010/08/24/AR2010082406754_pf.html.

95 Id. (“The Minerals Management Service . . . created in 1982 would not only lease tracts for exploration and collect the government’s share of oil and gas revenue, it would also regu-late the industry. That built-in conflict would hamstring the agency for decades.”).

96 See Kristina Alexander, Cong. Research Serv., R41265, The 2010 Oil Spill: The Minerals Management Service (MMS) and the National Environmental Policy Act (NEPA) 1 (2010).

97 Id. 98 Id. at 4. 99 Les Blumenthal & Erica Bolstad, U.S. Agency Let Oil Industry Write Offshore Drilling

Rules, McClatchy Newspapers, May 10, 2010, http://www.mcclatchydc.com/2010/05/ 10/93859/us-agency-lets-oil-industry-write.html. (“The MMS generates more revenue for the federal Treasury than any other agency except the Internal Revenue Service.”).

100 See Press Release, U.S. Dep’t of the Interior, supra note 91.


cause to human life and the environment. There are several reasons for skepticism that another catastrophic deepwater spill will be prevented by the new regulatory regime. First, there is the sheer technical complexity of the equipment in-volved in deepwater drilling.101 This injects increased opportunities for equipment failures and malfunctions that can have devastating conse-quences, as amply illustrated by the Deepwater Horizon disaster. The technical complexity of the equipment required for drilling and ex-tracting oil from miles beneath the surface of the ocean further in-creases the possibilities for human error, and when coupled with less-than-reliable “fail-safe” devices, another massive spill is just a new well away from occurring. It may even be that the new requirements imposed by BOEMRE in response to the Deepwater Horizon spill will further increase the com-plexity of the equipment used in deepwater drilling by adding layers of redundancies.102 Thus, the very regulations that designed to avert fu-ture spills could have the perverse effect of increasing the likelihood of another disaster in the deep. Then there is the environment where this incredibly complex technology is employed. To describe it as harsh grossly understates the conditions that deepwater drilling technology must withstand. Deepwa-ter is an environment of extreme pressures and extreme temperatures. The oil can be hundreds of degrees Fahrenheit and the water close to freezing.103 The water pressure can be literally crushing.104 This ex-treme environment only adds to the stresses and strains on the equip-ment, and increases the risk of failure.105 A second overall concern is the frequency with which blowouts occur.106 Recall that according to an evaluation of blowouts that oc-curred between 1992 and 2006, MMS determined that blowouts occur

101 See Mouawad & Meier, supra note 9 (referring to experts who opined that the risks

associated with deepwater drilling “do not directly increase with greater depth, . . . [b]ut they do rise as exploration and production rigs become more complex and more re-mote”).

102 See Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Increased Safety Measures for Energy Development on the Outer Continental Shelf, 75 Fed. Reg. 63,346, 63,348 (Oct. 14, 2010) (to be codified at 30 C.F.R. pt. 250) (listing additional pro-posed regulatory safeguards).

103 See Little, supra note 23, at 120 (“When the boiling-hot oil hits the freezing-cold wa-ter, it could solidify and block the flow, rupturing the pipes.”).

104 See id. at 118. 105 See id. at 120. 106 See Izon et al., supra note 50, at 84.


on average once for every several hundred wells drilled.107 To put that ratio into perspective, consider that almost 4000 wells exist in the Gulf of Mexico,108 and more are on their way as oil exploration and produc-tion fans out into deeper and deeper waters. Thus, at least ten wells in operation now are expected to experience a blowout, creating the like-lihood for more blowouts to occur in the future. Third, the critical equipment problems that came to light as a re-sult of the Deepwater Horizon spill are indicative of industry-wide prob-lems.109 In fact, the blowout preventers that were employed during the relief well, drilled to stop the flow from the Macondo well, experienced multiple failures.110 The multiple failures of the blowout preventers dur-ing such a critical emergency operation, concluded BOEMRE, “raise red flags as to the reliability of BOPs to adequately safeguard the lives of workers and protect the environment from oil spills in response to a large blowout.”111 Fourth, one can legitimately question whether BOEMRE and the other bureaus created in the aftermath of the Deepwater Horizon spill can truly serve as independent regulators of the oil and gas industry. One reason this question still lingers, even after MMS was dismantled, is because of BOEMRE’s continuing practice of adopting wholesale American Petroleum Institute (API) standards as regulatory require-ments.112 This means that an influential industry trade association con-tinues to loom large in the regulation of deepwater drilling. As a recent post-Deepwater Horizon example, one only need look at the SEMS re-quirement adopted by BOEMRE in October 2010.113 Publication of the final SEMS rule in the Federal Register proclaimed that “[t]his rule-making will incorporate in its entirety and make mandatory the Ameri-can Petroleum Institute’s Recommended Practice 75, Development of a Safety and Environmental Management Program for Offshore Opera-

107 Id. 108 Mouawad & Meier, supra note 9. 109 See Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Increased

Safety Measures for Energy Development on the Outer Continental Shelf, 75 Fed. Reg. 63,346, 63,355 (Oct. 14, 2010) (to be codified at 30 C.F.R. pt. 250) (“Circumstances sug-gest that, while a blowout and spill of this magnitude have not occurred before on the OCS, it is unlikely that the problems are unique to the Deepwater Horizon and BP’s Ma-condo well.”).

110 Id. 111 Id. 112 See, e.g., id. at 63,351. 113 Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Safety and

Environmental Management Systems, 75 Fed. Reg. 63,610, 63,610 (Oct. 15, 2010) (to be codified at 30 C.F.R. pt. 250).


tions and Facilities . . . under the jurisdiction of BOEMRE.”114 This is not the only time that API standards have been adopted by the agency as industry-wide regulatory requirements. According to one article rais-ing questions about this practice, MMS, and now BOEMRE, have adopted almost 100 API standards as regulatory requirements.115 This is not to suggest that regulatory agencies should not work closely with industry representatives to develop regulations. In fact, one approach to regulation, “negotiated rulemaking,” involves actively seek-ing input from all stakeholders, including industry representatives, as a regulation methodology. In addition, one should not foreclose consid-ering the expertise that industry can bring to bear in assisting regula-tors with the development of complex regulations.116 However, when an agency has the well-deserved reputation for having ties too close to the industry it regulates,117 doubts about regulator independence will legitimately follow, particularly when there is a practice of adopting wholesale numerous industry trade association standards as regula-tions.118 Heavy reliance upon trade association standards also leads to questions about regulatory agency expertise.119 The fifth, and perhaps most disconcerting reason to have doubts about the future effectiveness of the new deepwater regulatory regime involves the question of execution. That is, do the newly formed bu-reaus have sufficient personnel, polices, and training in place to closely regulate industry as it engages in deepwater drilling and its attendant risks? Based on the findings of a specially appointed Safety Oversight Board,120 there are a number of ongoing agency difficulties of such

114 Id. 115 See Blumenthal & Bolstad, supra note 99. 116 See Outer Cont’l Shelf Safety Oversight Bd., U.S. Dep’t of the Interior, Re-

port to Secretary of the Interior Ken Salazar 5, 26 (2010) [hereinafter Safety Oversight Board Report].

117 See Blumenthal & Bolstad, supra note 99 (quoting an environmental attorney de-scribing the MMS as “a revolving door where officials slip back and forth between the gov-ernment and the oil industry. That only adds to the perception that the federal agency is too close to the interests it regulates.”).

118 See Safety Oversight Board Report, supra note 116, at 26. 119 See id. (questioning whether BOEMRE has “sufficient staff with the requisite exper-

tise to review and vet standards that have been developed by industry group subject matter experts, such as the American Petroleum Institute (API), to determine the extent to which those standards should be used in developing regulations”).

120 Creation of the Safety Oversight Board was one of the actions taken by Secretary Salazar in response to the Deepwater Horizon oil spill. Id. at 1. The Safety Oversight Board was directed to, among other tasks, recommend ways to improve oversight of Outer Conti-nental Shelf activities. Id.


magnitude that addressing them by merely reorganizing MMS into three separate bureaus is not likely to resolve them.121 One of the most fundamental functions of any regulatory agency is to review permit applications. Regulator review is important to confirm that a sought-after permit and the activities it authorizes comply with the underlying statutory and regulatory requirements. This critical function, however, is likely to remain impaired because of a lack of per-sonnel. According to the Safety Oversight Board, there are simply not enough engineers at BOEMRE to review the thousands of permit ap-plications to conduct drilling activities in the Gulf of Mexico.122 Another shortcoming incapable of resolution by reorganization alone has to do with inspections, which are also among the core func-tions of a regulatory agency. In order to ensure that permitees are meeting their legal obligations on a consistent basis, routine inspec-tions are among the most essential regulator activities. Furthermore, those conducting the inspections must have appropriate training and be apprised of the applicable statutes and regulations that underlie in-spections and compliance determinations. A regulatory inspection program should also be random and unannounced if it is to maximize its effectiveness in evaluating compliance and deterring violations. In-spections that do not regularly occur or that are announced undercut this important regulatory tool and will fail to detect and deter viola-tions.123 If inspections uncover violations, then a critical part of any regulatory program is appropriate enforcement to punish violators, bring them into compliance, and deter future violations. The inspection function of BOEMRE is compromised because of major shortcomings with each of the main components of an effective inspection and enforcement program outlined above. One problem, for instance, the Safety Oversight Board found was that BOEMRE “does not have a formal, bureau-wide compilation of rules, regulations, poli-cies, or practices pertinent to inspections, nor does it have a compre-hensive handbook addressing inspector roles and responsibilities.”124 In addition, “unannounced inspections are rarely performed.”125

121 See id. at 4–5 (discussing agency difficulties). 122 Id. at 6 (“With increasing workloads, [Gulf of Mexico] district offices do not have a

sufficient number of engineers to efficiently and effectively conduct permit reviews.”). 123 See Jeffrey F. Beatty & Susan S. Samuelson, Business Law and the Environ-

ment 92 ( Jack W. Calhoun et al. eds., 4th ed. 2007). 124 Safety Oversight Board Report, supra note 116, at 8. 125 Id. at 9.


Lack of appropriate inspector training is another shortcoming ad-versely impacting the effectiveness of BOEMRE as a regulatory agency, since it “does not have a formal training and certificate program for its inspectors.”126 In light of the breathtaking complexity involved in deepwater oil production activities, the lack of inspector training is very troubling. The number of inspectors is yet another problem plaguing the BOEMRE offshore regulatory program. According to the Safety Over-sight Board, there are approximately 3000 offshore facilities subject to BOEMRE jurisdiction in the Gulf of Mexico,127 but there are only fifty-five inspectors.128 This means there are fifty-four facilities for every one inspector,129 which seems wholly inadequate when one considers the technical complexity associated with deepwater drilling and produc-tion, and their inherent risks. The lack of inspection personnel may explain, in part, why even after instances of noncompliance are found, few follow-up inspections result. In 2009 there were 2298 so-called instances of noncompliance; however, “only 50 follow-up inspections were conducted to ensure com-pliance.”130 The penalties violators may face for noncompliance are another problem for BOEMRE. The maximum penalty for violations is $35,000 per day, per violation.131 At first blush this may not seem an inconse-quential sum, and is in line with the penalty amounts proscribed by other environmental statutes.132 As the Safety Oversight Board pointed out, however, even BOEMRE employees question whether, given the fact that “many operators pay between $500,000 and $1 million daily to run a facility, . . . a potential fine of no more than $35,000 per violation per day is an effective tool to deter violations.”133 Data considered by MMS supports the view that past enforcement against the offshore industry has not resulted in improved compliance.

126 Id. at 11. 127 Id. at 13. 128 Id. 129 Id. 130 Safety Oversight Board Report, supra note 116, at 18. 131 See 43 U.S.C. § 1350(b) (2006); Outer Continental Shelf Civil Penalties, 75 Fed.

Reg. 1076, 1076 ( Jan. 8, 2010) (summarizing review of the maximum daily civil penalty assessment). The statutory civil penalty authorized for violating the Outer Continental Shelf Act has increased over time to $35,000 per day, per violation, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990. See 28 U.S.C. § 2461 (2006).

132 See, e.g., Clean Water Act, 33 U.S.C. § 1319(d) (2006) (civil penalty provision impos-ing up to $25,000 per day, per violation).

133 Safety Oversight Board Report, supra note 116, at 18.


In discussing the need to consider adoption of SEMS as a regulatory standard, MMS noted that from 2001 to 2007 it had issued approxi-mately 150 instances of noncompliance to oil drilling operators per year.134 MMS concluded that such enforcement activity had little, if any, deterrent effect, because it led to “no discernable trend of improvement by industry over the past 7 years.”135

V. Additional Measures to Consider

One lesson learned from the Deepwater Horizon oil spill is the regulations in place governing deepwater drilling are insufficient. Ad-ditional measures are required to ensure that deepwater drilling is per-formed as safely as is humanly possible, and in a manner that mini-mizes adverse environmental impacts. The actions taken by BOEMRE to date are a step in the right direction. Alone, however, they are not enough to prevent the next Deepwater Horizon-magnitude oil spill from recurring.

A. Increased Penalties

One way to incentivize the oil and gas industry to engage in deep-water drilling as safely as humanly possible is to substantially bolster the sanctions that are available in the event that a spill does occur. To achieve this goal, in part, Congress should eliminate the liability cap associated with oil spills, which is now $75 million,136 unless gross neg-ligence or willful misconduct is found.137 The current limit on liability, even with no limit on removal costs, is woefully inadequate for the harm that a massive spill like the Deepwater Horizon can cause. Closely related to the liability cap is whether the per day, per viola-tion, civil penalty that operators face for noncompliance is sufficient. The Safety Oversight Board concluded that the current amount, up to $35,000 per day, per violation, provides insufficient deterrent effect.138 Therefore, it is clear that the amount should be dramatically increased.

134 See Safety and Environmental Management Systems for Outer Continental Shelf Oil

and Gas Operations, 74 Fed. Reg. 28,639, 28,642 (proposed June 17, 2009) (codified at 30 C.F.R. pt. 250).

135 Id. 136 33 U.S.C. § 2704(a)(3) (2006). 137 Id. § 2704(c). 138 Safety Oversight Board Report, supra note 116, at 17–18 (“The current level of

civil penalty fines . . . do not make them an effective deterrent to violations of OCS regula-tions.”).


A related financial deterrence mechanism that Congress can put in place is to greatly enhance the civil liability of responsible parties when gross negligence or willful misconduct is found. In order to deter and punish such conduct, it is not sufficient to rely on the common law punitive damages remedy. As the Exxon Valdez oil spill litigation vividly demonstrated, even if awarded, punitive damages are subject to dra-matic reductions by the courts. There, the trial court imposed a $5 bil-lion punitive damages award against Exxon for the massive Prince Wil-liam Sound spill.139 Following multiple appeals, the Ninth Circuit reduced the punitive damages award to $2.5 billion,140 and later the Supreme Court further reduced it to just $500 million, a one-to-one ratio based on the compensatory damages.141 To avoid the morass of punitive damages resulting from recent Su-preme Court decisions,142 Congress can look to the Comprehensive En-vironmental Response, Compensation, and Liability Act (CERCLA) and its treatment of recalcitrant Potentially Responsible Parties (PRPs) who fail to comply with section 106 orders.143 CERCLA section 106 author-izes the Environmental Protection Agency (EPA) to order PRPs to inves-tigate and remediate a site contaminated with hazardous substances if an imminent and substantial endangerment to human health, welfare, or the environment exists.144 What makes the issuance of a section 106 order such a potent EPA enforcement tool is that the failure to comply can result not only in large per day, per violation fines,145 but additional liability up to treble the amount incurred by the government in re-sponding to the release of hazardous substances.146 A similar approach could be adopted by amending the Oil Pollution Act to impose, in addi-tion to removal costs and natural resource damages,147 an express treble

139 In re The Exxon Valdez, 296 F. Supp. 2d 1071, 1082 (D. Alaska 2004), vacated 490 F.3d 1066 (9th Cir. 2006), vacated sub nom. Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008).

140 In re The Exxon Valdez, 490 F.3d at 1073. 141 Exxon Shipping Co., 554 U.S. at 514. 142 See Shawn LaTourette, Run Aground Again: The Exxon Valdez’s Collision with the Su-

preme Court’s Punitive Damages Jurisprudence, 39 Envtl. L. Rep. (Envtl. Law Inst.) 11,097, 11,097 (2009) (“Nearly 20 years after the spill, those who sought punitive damages for their resulting injuries were met by a Supreme Court still hostile toward punitives, and poised to limit them in a new and unique way.”).

143 See Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9606(a)–(b) (2006).

144 See id. § 9606(a). 145 Id. § 9606(b)(1) (imposing a penalty of $25,000 for each day a section 106 order is

not complied with). 146 Id. § 9607(c)(3). 147 See Oil Pollution Act, 33 U.S.C. § 2702(b) (2006).


damages award based upon the total economic harm resulting from the oil spill148 where instances of gross negligence or willful misconduct are found.

B. Increased Financial Assurances

Yet another financial mechanism that could become a routine condition of issuing drill permits for deepwater exploration and pro-duction is to require the ultimate parent to sign as a guarantor for any damages that result from one of its subsidiary’s drilling activities.149 One of the designated responsible parties for the Deepwater Horizon oil spill is BP Exploration and Production, Inc.,150 a subsidiary of BP North America, which is a wholly owned subsidiary of the London-headquartered BP PLC.151 It remains to be seen whether BP Explora-tion and Production, Inc. has the financial wherewithal to compensate for all the damages associated with the spill. It also remains to be seen whether the protection of the bankruptcy courts may be sought by BP Exploration and Production, Inc. as its total financial liability evolves.152 In the event the responsible party is unable to fully compensate for damages, the ultimate parent guarantee of BP PLC would serve as an alternative funding source to make certain that all corporate assets are available for compensation, and not hidden behind the shield of lim-ited shareholder liability.153 Without such an ultimate parent guaran-tee, the maximum extent of the assets available is confined to those of the subsidiary and not the parent.154

148 See, e.g., 42 U.S.C. § 9607(c)(3) (CERCLA’s treble damages provision). 149 See 33 U.S.C. § 2716(e). The Oil Pollution Act requires parties engaged in offshore

drilling to provide financial assurances. Id. § 2716(c). The mechanisms for providing finan-cial assurances vary but an ultimate parent guarantee is not mandated. See id. § 2716(e).

150 U.S. Gov’t Accountability Office, GAO-11-90R, Deepwater Horizon Oil Spill: Preliminary Assessment of Federal Financial Risks and Cost Reimbursement and Notification Policies and Procedures 1 (2010).

151 BP Exploration & Production Inc., Bloomberg Businessweek, http://investing. businessweek.com/research/stocks/private/snapshot.asp?privcapId=10006787 (last visited Apr. 15, 2010).

152 See Clients and Friends Memorandum from Cadwalader, Wickersham & Taft LLP, BP in the Wake of the Deepwater Horizon Incident and the Bankruptcy Implications of Mounting Environmental Liabilities 6 ( July 7, 2010), available at http://www.cadwalader. com/assets/client_friend/070710_BPintheWakeofDeepwater.pdf.

153 See 33 U.S.C. § 2716(e); United States v. Bestfoods, 524 U.S. 51, 61–62 (1998) (“Thus it is hornbook law that the exercise of the control which stock ownership gives to the stockholders . . . will not create liability beyond the assets of the subsidiary.’’ (citation and internal quotation marks omitted)).

154 See Bestfoods, 524 U.S. at 61–62.


On a related issue, currently under the Oil Pollution Act parties engaged in offshore drilling activities have to provide financial assur-ances of up to $35,000,000.155 The current amount of financial assur-ances is inadequate considering the damages wrought by the Deepwa-ter Horizon spill and should be dramatically increased by Congress.156

C. Increased Criminal Sanctions

To truly maximize deterrence and improve operator compliance, Congress could also increase the criminal sanctions associated with oil spills.157 In addition, the Department of Justice could aggressively use the responsible corporate officer doctrine in prosecuting major oil spill cases.158 If corporate officers faced the threat of prison as one of the consequences of an oil spill, they are much more likely to manage with a heightened concern for compliance, safety, and environmental pro-tection.

D. Improving the Regulatory Structure

Other necessary steps include addressing the structural deficien-cies at BOEMRE. We cannot reasonably expect the agency, even in its restructured form, to effectively regulate the complexities associated with deepwater exploration and production without enough engineers to conduct even basic permit reviews.159 Similarly, we are asking too much of regulators to closely monitor offshore activities, including deepwater drilling, if personnel are not adequately trained and lack clear written guidelines. Further, we cannot expect effective agency regulation without a random and unannounced inspection regime.

155 33 U.S.C. § 2716(c)(1)(B). 156 The National Commission on the BP Deepwater Horizon Oil Spill estimated that it

could cost anywhere from $15 to $20 billion to restore the Gulf. BP Commission Report, supra note 12, at 210–11. Civil penalties under the Clean Water Act could be between $4.5 to $20 billion depending on findings of negligence and the amount of oil that was dis-charged. Id. According to the complaint filed on December 15, 2010 by the Justice De-partment, “[t]he amount of damages and the extent of injuries sustained by the United States as a result of the Deepwater Horizon Spill are not yet fully known, but far exceed $75,000,000.” Complaint of the United States of America at 19, United States v. BP Explo-ration & Prod. Inc., No. 2:10-cv-04536-CJB-SS (E.D. La. Dec. 15, 2010).

157 See, e.g., Clean Water Act, 33 U.S.C. § 1319(c)(1) (2006) (criminal sanctions provi-sions under Clean Water Act).

158 See, e.g., id. § 1319(c)(6) (defining a “person” under the Clean Water Act to include “any responsible corporate officer”).

159 See Safety Oversight Board Report, supra note 116, at 6.


Thus, steps must immediately be taken to address these and other deficiencies discussed in the Safety Oversight Board’s report. Without addressing these fundamental regulatory agency issues, no matter what new statutory or regulatory measures are enacted and regardless of what agency restructuring takes place, the actions of regulators and policymakers will not succeed in preventing another massive oil spill from future deepwater drilling activities.

E. Improved Technology and Oil Spill Response

Lastly, since policymakers and industry continue to support deep-water exploration and production activities, we must strive to have in place the best technology humanly possible. If we do not, future mas-sive oil spills will result. One possible course of action is for BOEMRE to establish a special commission involving experts from the agency, law, academia, the engineering profession and, yes, the oil and gas in-dustry, that would then collaborate on further evaluating and improv-ing existing deepwater technology. Such an expert commission can also consider how other countries regulate deepwater drilling to see if there are indeed better regulatory regimes in place. A particular focus of these experts should rest on the fundamen-tals of well pressure control—the use of drilling mud and cement—as the primary methods of avoiding another Deepwater Horizon disas-ter.160 Another focus of the experts must be on blowout preventers, given their critical function as a last resort fail-safe mechanism in the event pressure control is lost at a well. This expert panel must also reassess the worst case scenario in the event well control is lost and the blowout preventer fails to stop the well from flowing. This would involve examining current oil spill response technologies and methods to seek improvements in the actions needed to combat an oil spill. To its credit, the oil and gas industry has already headed down this path by forming a joint industry task force to “iden-tify best practices in offshore drilling operations and equipment.”161

160 See supra Part I.B. 161 See Joint Indus. Task Force to Address Offshore Operating Procedures &

Equip., White Paper: Recommendations for Improving Offshore Safety 1 (2010), avail-able at http://online.wsj.com/public/resources/documents/DRAFTJITFRecommendations1. pdf.


Conclusion

Even after the several-months-long Deepwater Horizon oil spill, obtaining recoverable oil from deep beneath the ocean floor, in thou-sands of feet of water, remains an important part of our nation’s energy policy. Among the confluence of factors that contributed to the Deep-water Horizon human tragedy and environmental disaster was a failure to adequately regulate the risks associated with deepwater drilling technology. Admittedly, the federal government has taken certain ac-tions in response to this unparalleled disaster, including revamping the regulatory agency responsible for permitting and oversight of deepwa-ter drilling activities and adopting new regulations targeting oil and gas activities in the Gulf of Mexico. There are legitimate reasons to doubt, however, whether the ac-tions taken by the federal government are sufficient to dramatically re-duce the risks of another catastrophic oil spill that will result in loss of life and untoward harm to the marine ecosystem. One reason to ques-tion whether the federal government’s actions are adequate to reduce the risks inherent in deepwater drilling is because of the incredible complexity of the technology used in deepwater oil production. This is particularly troublesome when one contemplates the extraordinarily harsh conditions that the technology faces in deepwater. Further, dis-mantling MMS and creating BOEMRE, as its replacement agency, ap-pears to have done little to address the lack of resources that are critical for any agency to serve in a robust regulatory capacity. A final reason to be less than sanguine about the future effectiveness of the response to the Deepwater Horizon oil spill is the reliance on blowout preventers as the fail-safe mechanism of last resort in the event pressure control is lost at a well in thousands of feet of water. As amply demonstrated by the Deepwater Horizon, blowout preventers fail at an alarmingly high rate; yet presently by regulation they are the technological fail-safe de-vice of last resort for the industry. The Deepwater Horizon vividly illustrated to regulators, industry representatives, and members of the public a tragic lesson about the terrible consequences associated with deepwater oil drilling. Never-theless, despite this tragic lesson, we still remain only one well away from another unfortunate disaster in the deep unless additional steps are taken by regulators and industry.

INSERTED BLANK PAGE

THE SIGNIFICANCE OF REGULATORY ORIENTATION IN OCCUPATIONAL HEALTH AND SAFETY OFFSHORE

John Paterson*

Abstract: The 2010 Deepwater Horizon disaster in the Gulf of Mexico has led to calls for the United States’ prescriptive regulatory approach to off-shore safety to be replaced with something closer to the safety case regime that was introduced in the United Kingdom following the Piper Alpha disaster in the North Sea in 1988. This Article traces the evolution of off-shore safety regulation in the United Kingdom to explain the reasons for the abandonment of prescriptive regulation in favour of the safety case approach, and to outline the key features of the latter regime. Noting both the apparent strengths and weaknesses of the safety case, this Article concludes that while there may be good reasons for avoiding a wholesale transplant of the United Kingdom’s approach, there may equally be im-portant lessons to be drawn from the long and often difficult evolution of offshore safety regulation in that jurisdiction.

Introduction

In the aftermath of the Deepwater Horizon disaster, unprece-dented attention is being paid to an area of law that would previously have been obscure for most. The regulation of health and safety in the offshore oil and gas industry is clearly a matter of considerable techni-cal sophistication1 that at other times remains the preserve of the spe-cialists directly involved. But when something goes wrong on the scale that it did in the Gulf of Mexico in April 2010, it becomes apparent that such regulation is not only a matter of concern to those on the installa-tions, but also to a much wider population indeed. As other contribu-tions to this issue testify, the impact on the people of the Gulf Coast has already been significant, and the full effects both of the spill and the

* © 2011, John Paterson, Reader in Law and Co-Director of the Centre for Energy Law

at the University of Aberdeen, UK. 1 See, e.g., Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore

Drilling, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling 73, 251 (2011) [hereinafter BP Commission Report].

369


clean-up effort may take some time to become evident.2 In such cir-cumstances, as the investigation into what has happened proceeds, it is by no means unusual for the form and content of the relevant regula-tion to come into question, along with the identity and responsibility of the regulator, and this event is no exception. In the months following the disaster, the regulatory architecture has already undergone reform. The various functions of the former Minerals Management Service— promotion of energy development, regulation of offshore drilling, and the collection of revenues—have been separated out among three dis-tinct bodies under the Department of the Interior, on the basis that there was previously a conflict of interest among them.3 Whether that is a sufficient adjustment to the regulatory architecture is an open ques-tion, but is beyond the scope of this Article. Attention is now turning to the question of regulatory orientation, with a number of observers sug-gesting that in place of the detailed prescriptive approach to offshore safety regulation,4 the United States should consider the goal-oriented safety case approach of the United Kingdom.5 This would constitute a radical reorientation of the regulatory approach currently used on the Outer Continental Shelf,6 and before any such step is taken it would be imperative to have a clear idea of how this approach has worked in the United Kingdom. Is this really an approach to regulation that would produce significant improvements? Or does its placing of the responsi-bility for the development of detail on the operator actually increase risk? Might it even be argued, as Rena Steinzor does in this issue, that BP’s familiarity with the safety case approach on the U.K. Continental Shelf (UKCS) was a factor in that operator’s attitude to risk that pro-duced such disastrous results in the Gulf of Mexico?7 In order to contribute to this debate, this Article provides a review of the evolution of health and safety regulation on the UKCS in order to explain how and why a detailed prescriptive approach similar to the existing U.S. system was ultimately abandoned in favor of the goal-

2 See id. at 173–95. 3 See U.S. Sec’y of the Interior, Order No. 3299, Establishment of the Bureau of Ocean

Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue (May 19, 2010), available at http://www.doi.gov/deepwaterhorizon/ loader.cfm?csModule=security/getfile&PageID=32475; BP Commission Report, supra note 1, at 55–56, 254.

4 See generally 30 C.F.R. pt. 250 (2010). 5 See BP Commission Report, supra note 1, at 251–52. 6 See id. at 250–54. 7 See Rena Steinzor, Lessons from the North Sea: Should “Safety Cases” Come to America?, 38

B.C. Envtl. Aff. L. Rev. 417, 420–21 (2011).

2011] The Safety Case Approach: A Model for the United States 371

setting, safety case approach in place today.8 It then offers an account of what the new regime involves in practice, as well as the lessons that have been learned during its implementation and the adjustments that have been necessary.9 While undoubtedly an approach that has pro-duced positive results, there have in recent years been indications that call into question its complete efficacy.10 Do these indicate a funda-mental flaw and perhaps lend weight to Rena Steinzor’s argument? Or do they point to another aspect of a basically sound regulatory orienta-tion that simply requires improvement? This Article argues in favor of the latter position and thus suggests that there are lessons to be drawn from the U.K. experience that could be of value as the United States considers what sort of regulatory reform may still be required.11

I. The Early Evolution of the United Kingdom’s Approach to Offshore Safety

The challenge for any government in regulating the offshore oil and gas industry is considerable. Not only does the industry possess significantly greater knowledge and expertise than regulators,12 but it is also characterized by constant technological progress as it endeavours both to increase the percentage of hydrocarbons recoverable from any reservoir, and to find and extract oil and gas from ever more difficult circumstances.13 Thus, not only does a government dealing with the industry for the first time start at a significant cognitive disadvantage, but it then embarks on a race to keep pace with developments that it realistically has no hope of winning.14 The experience of the United Kingdom in this regard is no exception. Tracing that experience is in-structive because the United Kingdom has confronted the reality of its regulatory shortcomings on several occasions, and has had to reorient its approach radically more than once. When the United Kingdom became aware in the early 1960s that natural gas might be present under its continental shelf, its goal to de-rive economic benefit as quickly as possible prompted it to take short-

8 See infra Part I. 9 See infra Part II. 10 See, e.g., Health & Safety Exec., Key Programme 3: Asset Integrity Programme

5 (2007) [hereinafter KP 3 Report], available at http://www.hse.gov.uk/offshore/kp3.pdf. 11 See infra Conclusion. 12 See, e.g., BP Commission Report, supra note 1, at 67, 76–77. 13 See, e.g., id. at 73, 251. 14 See, e.g., id. at 73.


cuts in establishing the legal regime for its exploitation.15 Once the Con-tinental Shelf Act of 1964 was passed, the United Kingdom simply lifted the existing onshore regulatory regime for the exploration and produc-tion of oil and gas, which dated from the 1930s,16 and transferred it to the offshore environment.17 This vested all mineral resources in the Crown and required the relevant government department to issue a li-cense to explore or exploit mineral resources.18 The grant of licenses for onshore operations had been governed by regulations passed in 1935.19 These regulations contained Model License Clauses and were more or less copied verbatim for the new offshore licenses.20

The Model Clauses required that: “[t]he Licensee shall comply with any instructions from time to time given by the Minister in writing for securing the safety health and welfare of persons employed in or about the licensed area.”21 The United Kingdom’s lack of experience and expertise was immediately evident when the Minister instructed the industry to follow the Institute of Petroleum Model Code of Safe Practice in the Petroleum Industry (“IP Code”).22 There were, there-fore, neither any substantive legal provisions relating to safety issues, nor any detailed oversight of this aspect on the part of the govern-ment.23 And the inadequacy of this hands-off approach to offshore safety became clear within a very short time when the Sea Gem drilling rig operated by BP sank in December 1965, resulting in the loss of thir-teen lives.24

15 See W.G. Carson, The Other Price of Britain’s Oil: Safety and Control in

the North Sea 140–41 (1982). 16 See generally Petroleum (Production) Act, 1934, 24 & 25 Geo. 5, c. 36. 17 See Continental Shelf Act, 1964, c. 29, § 1. 18 See id. § 1(1)–(3). 19 See generally Petroleum (Production) Regulations, 1935, Stat. R. & O. 1935/426. 20 Compare id. sched. 2 (model license clauses for the onshore Petroleum Production

Regulations), with Petroleum (Production) (Continental Shelf and Territorial Sea) Regu-lations, 1964, S.I. 1964/708, sched. 2 (model license clauses for the offshore Petroleum Production Regulations).

21 See Petroleum (Production) (Continental Shelf and Territorial Sea) Regulations, 1964, S.I. 1964/708, sched. 2, ¶ 18.

22 See Ministry of Power, Report of the Inquiry into the Causes of the Acci-dent to the Drilling Rig Sea Gem, 1967, Cmnd. 3409, ¶ 6.2 (U.K.) [hereinafter Sea Gem Report]. The IP Code was issued in October 1964. See id. at i.

23 See id. ¶ 8.2 (noting that the IP Code delineates only practical recommendations and is not regulatory in nature).

24 W.G. Carson, The Other Price of Britain’s Oil: Regulating Safety on Offshore Oil Installa-tions in the British Sector of the North Sea, 4 Contemp. Crises 239, 250 (1980).


The Sea Gem Inquiry (the “Inquiry”), established by the Minister of Power,25 lacked formal powers because an offshore installation was only regulated by license, and fell outside of any statutory authority.26 Its recommendations led in due course to the establishment of a com-prehensive prescriptive regulatory regime for safety offshore.27 The approach to safety offshore at the time of the Sea Gem accident un-doubtedly possessed some obvious weaknesses. Insofar as the IP Code lacked legal authority, it would have been difficult to enforce; the only sanction open to the Minister in the event of a failure to comply with the Code would appear to have been the potentially grossly dispropor-tionate revocation of the license.28 The quasi-contractual nature of the license29 would have made it impossible for the Minister to intervene—even assuming that he had some appropriate regulatory apparatus to effect an inspection—where unsafe activities were being carried out by actors not party to the license, a potentially wide group given the extent of subcontracting in the offshore industry.30 The Inquiry’s recommendation with respect to a prescriptive regu-latory approach undoubtedly addressed these shortcomings.31 However the Inquiry’s unique rationale provides an early insight into why such prescriptive rules are attractive to lawyers and regulators, without nec-essarily being well-adapted to a fast-developing and technologically in-tensive industry. In short, while the Inquiry recognized that the IP Code fell short of legislative and regulatory standards and thus called for “a code of [statutory] authority supported by credible sanctions,”32 it equally found that the offshore industry was “so large and the eviden-tial material so complex” that “generalisations could well be both inapt

25 Id. at 1. 26 See Sea Gem Report, supra note 22, at 1–2. 27 Carson, supra note 24, at 251. 28 See Sea Gem Report, supra note 22, at 2. 29 See Greg Gordon, Petroleum Licensing, in Oil and Gas Law: Current Practice and

Emerging Trends 27, 27–68 (Greg Gordon & John Paterson eds., 2007). 30 See R.W. Bentham, The United Kingdom Offshore Safety Regime: Before and After Piper Alpha,

9 J. Energy & Nat. Resources L. 273, 275 (1991); Steve Hargreaves, BP, Subcontractors: Spill is the Other Guy’s Fault, CNNMoney (May 11, 2010, 5:22 PM), http://money.cnn.com/2010/ 05/11/news/companies/BP_hearings/index.htm (illustrating the extent of subcontracting in the offshore oil industry).

31 See Carson, supra note 24, at 250–51 (noting that the Inquiry’s recommendation led to the replacement of the contract-based licensing system with a more powerful prescrip-tive system under statutory law).

32 Sea Gem Report, supra note 22, ¶ 10.2(i) (“In some other countries, notably the United States of America, there are statutory provisions . . . . The Tribunal is of the opin-ion that a code of similar authority . . . ought to be made applicable to British structures of like kind.”).


and dangerous.”33 Nevertheless, that is precisely what it was recom-mending should be done in the context of a detailed statutory code.34 This, then, was the background to the Mineral Workings (Offshore Installations) Act 1971 (the “1971 Act”), which was the statute eventu-ally enacted to enable the detailed safety regulations called for by the Sea Gem Inquiry.35 Legislators reasoned that addressing details of the program in secondary legislation would allow regulations to be changed more rapidly to keep pace with evolving technology.36 While the legislators clearly had some idea of the complexity of the task they were giving to the regulators, even they would surely have been sur-prised that it took some eight years for the full set of regulations to be produced.37 Between 1972 and 1980, eleven statutory instruments were introduced.38 It is noteworthy that it was 1976 before any regulation dealing with substantive issues of health and safety appeared39—over a decade after the Sea Gem disaster—and even this was regarded later by the regulator as having been done “hurriedly” and on the basis of “in-adequate consultations.”40 Regulations dealing with emergency proce-dures did not appear until later in 1976,41 and the full set42 was not in place until after some of the large, first-generation platforms were in

33 Id. ¶ 10.1. 34 See id. ¶¶ 10.1–.3 (finding that a prescriptive statutory system is preferred despite

the complex and multifarious nature of the industry). 35 Bentham, supra note 30, at 275. 36 See 816 Parl. Deb., H.C. (5th ser.) (1971) 648 (U.K.) (statement by the Under-

Secretary of State for Trade and Industry). 37 See Carson, supra note 15, at 154–55 (noting that even the Under-Secretary of State

expected to publish the regulations more quickly). 38 See infra notes 39–44 and accompanying text. 39 Offshore Installations (Operational Safety, Health and Welfare) Regulations, 1976,

S.I. 1976/1019. 40 See Dep’t of Energy, Offshore Safety: Report of the Committee, 1980, Cmnd.

7866, submission 37, ¶ 7 (U.K.) [hereinafter Burgoyne Report]. 41 Offshore Installations (Emergency Procedures) Regulations, 1976, S.I. 1976/1542. 42 Offshore Installations (Registration) Regulations, 1972, S.I. 1972/702; Offshore Instal-

lations (Managers) Regulations, 1972, S.I. 1972/703; Offshore Installations (Logbooks and Registration of Death) Regulations, 1972, S.I. 1972/1542; Offshore Installations (Inspectors and Casualties) Regulations, 1973, S.I. 1973/1842; Offshore Installations (Construction and Survey) Regulations, 1974, S.I. 1974/289; Offshore Installations (Public Inquiries) Regula-tions, 1974, S.I. 1974/338; Offshore Installations (Operational Safety, Health and Welfare) Regulations, 1976, S.I. 1976/1019; Offshore Installations (Emergency Procedures) Regula-tions, 1976, S.I. 1976/1542; Offshore Installations (Life-saving Appliances) Regulations, 1977, S.I. 1977/486; Offshore Installations (Fire-fighting Equipment) Regulations, 1978, S.I. 1978/611; Offshore Installations (Well Control) Regulations, 1980, S.I. 1980/1759.


place and producing from the North Sea’s largest fields.43 Very signifi-cantly, regulations dealing with well control were the last to appear in 1980.44 The difficulties attending the prescriptive regulatory orientation un-der the 1971 Act were therefore already becoming apparent, and prob-lems with the regulatory architecture were also beginning to emerge. While responsibility for health and safety offshore under the 1971 Act was transferred between a number of departments, observers of the in-dustry have noted that this responsibility always went hand in hand with granting exploration and production licenses, leading to a potential conflict of interest.45 For most of the period between the passing of the 1971 Act and the aftermath of the Piper Alpha disaster, this dual—and potentially conflicted—responsibility lay with the Department of En-ergy’s Petroleum Engineering Division (PED).46 Interestingly, these problems of regulatory architecture and orien-tation were almost concurrently under review in relation to health and safety in onshore industries.47 As the 1971 Act was passing through Par-liament, a government-sponsored committee chaired by Lord Robens was considering the regulation of occupational health and safety gen-erally.48 Reporting in June 1972,49 the Robens Committee essentially called into question the assumptions about safety regulation that un-derpinned the newly adopted approach offshore.50 The Committee was concerned that: (1) the detailed prescriptive approach had the effect of

43 For example, production began from the Forties field in 1975, from Brent in 1976,

from Piper in 1976, and from Ninian in 1978. The Geology of Scotland 463 (Nigel H. Trewin ed., 4th ed. 2002).

44 Offshore Installations (Well Control) Regulations, 1980, S.I. 1980/1759. 45 See Carson, supra note 15, at 163–66; Bentham, supra note 30, at 276; Kenneth

Miller, Piper Alpha and the Cullen Report, 20 Indus. L.J. 176, 178–79 (1991). 46 See Carson, supra note 15, at 163–64 (noting that the PED came into existence in

1977, taking over the potentially conflicting responsibility for both offshore safety and licensing); Dep’t of Energy, The Public Inquiry into the Piper Alpha Disaster, 1990, Cm. 1310, ¶ 15.2 (U.K.) [hereinafter Cullen Report] (explaining that the PED retained this responsibility leading up to and in the aftermath of the Piper Alpha disaster). The regulatory structure in the United States leading up to the Deepwater Horizon disaster presented a similar conflict, as the Minerals Management Service possessed sole responsi-bility for regulatory oversight, as well as leasing, permitting, and revenue collection. See BP Commission Report, supra note 1, at 56, 254.

47 See Miller, supra note 45, at 178. 48 See id. 49 See generally Comm. on Safety & Health at Work, Report: 1970–72, 1972, Cmnd.

5034 (U.K.). 50 See id. ¶ 28 (“[P]erhaps [the] most fundamental defect of the statutory system is sim-

ply that there is too much law.”).


producing too much health and safety law, and of giving the impression that health and safety was a matter of governmental rather than indi-vidual responsibility; (2) it produced law that was irrelevant to real problems; and (3) it depended on a large number of different industry-specific regulators which produced problems of coherence in the ap-proach to health and safety at work.51 The overall conclusion was that:

There are severe practical limits on the extent to which progressively better standards of safety and health at work can be brought about through negative regulation by external agencies. We need a more ef-fectively self-regulating system. This calls for the acceptance and exercise of appropriate responsibilities at all levels within in-dustry and commerce. It calls for better systems of safety or-ganisation, for more management initiatives, and for more in-volvement of workpeople themselves. The objectives of future policy must therefore include not only increasing the effec-tiveness of the state’s contribution to safety and health at work but also, and more importantly, creating the conditions for more effective self-regulation.52

This starkly different approach to health and safety at work led to the Health and Safety at Work etc. Act 1974 (the “1974 Act”).53 The 1974 Act embodied the non-prescriptive and goal-setting approach to regulation proposed by Robens, and also did away with industry-specific regulators in favour of a single body, the Health and Safety Executive (HSE).54 This very different regulatory approach to health and safety was a challenge to those already engaged with the difficult task of draft-ing detailed regulations for the offshore industry under the 1971 Act.55 Of all the possible responses, the one regulators ultimately chose was particularly unfortunate. It involved a partial application of the 1974 Act56 simultaneous with the application of the 1971 Act and its detailed prescriptive regulations, with the responsibility for both resting with the

51 See id. ¶¶ 28, 30, 32–33. 52 Id. ¶ 41. 53 See Cullen Report, supra note 46, ¶ 16.7. 54 See id. ¶ 16.8. 55 See id. ¶ 16.36. 56 Health and Safety at Work etc. Act 1974 (Application Outside Great Britain) Order,

1977, S.I. 1977/1232 (applying the general duty from the 1974 Act on the part of the em-ployer to ensure, so far as is reasonably practicable, the health, safety and welfare of em-ployees).


offshore industry’s own regulator, the PED.57 At best this was untidy, at worst it was incoherent. Nor was the opportunity taken to resolve the inconsistencies when, in the aftermath of the Ekofisk Bravo blowout in the Norwegian sector in 1977, a further committee58 was established by the U.K. government to look at offshore safety.59 The Burgoyne Com-mittee, while undoubtedly identifying the problems that arose from at-tempted implementation of two inconsistent regulatory regimes, did not follow these observations to their logical conclusion and recom-mend bringing the regulation of offshore health and safety into line with the new approach onshore.60 Instead, the Burgoyne Committee kept faith both with the problematic dual implementation of the 1971 Act and 1974 Act regimes and with the potentially conflicted industry-specific regulator.61 The tenacity of the PED in hanging onto a regula-tory role62 perhaps explains the suggestion made by the dissenting members of the Burgoyne Committee that between the regulator and the industry there was the “possibility of shared values and membership of closed groups.”63

57 See Carson, supra note 15, at 207–08 (explaining that the North Sea oil industry had

been partially exempted from regulations under the 1974 Act and that the PED retained safety inspection responsibility); Cullen Report, supra note 46, ¶¶ 16.10–.11 (explaining that only selected portions of the 1974 Act itself—not the regulations passed thereunder—would be applicable to offshore installations). The PED carried out the HSE’s inspection function under an agency agreement between the HSE and the Department of Energy. See Miller, supra note 45, at 178. For the agency agreement, see Burgoyne Report, supra note 40, app. 11.

58 That further committee was called the Burgoyne Committee, and its terms of refer-ence were as follows:

To consider so far as they are concerned with safety, the nature, coverage and effectiveness of the Department of Energy’s regulations governing the explo-ration, development and production of oil and gas offshore and their admini-stration and enforcement. To consider and assess the role of the Certifying Authorities. To present its report, conclusions and any recommendations as soon as possible.

Burgoyne Report, supra note 40, ¶ 1.1. 59 See Carson, supra note 15, at 195. 60 See Miller, supra note 45, at 178–79. 61 See id. 62 See Carson, supra note 15, at 202. 63 Burgoyne Report, supra note 40, at 59 (“Note of Dissent by Mr. Lyons and Mr.

Miller”).


II. The Piper Alpha Disaster, the Cullen Inquiry, and the Safety Case Approach

A. The Piper Alpha Disaster and the Cullen Report

The significance of the opportunity missed by the Burgoyne Com-mittee became apparent some eight years after the completion of its report. On July 6, 1988, a series of explosions and subsequent fires al-most entirely destroyed the Piper Alpha oil production platform in the North Sea.64 167 men were killed, making this by far the worst accident in the history of the offshore industry in terms of lives lost.65 An inquiry, chaired by Lord Cullen, a senior Scottish judge, was asked to answer two questions: “What were the causes and circumstances of the disaster . . . and . . . [w]hat should be recommended with a view to the preservation of life and the avoidance of similar accidents in the future?”66 The answer to these deceptively simple questions emerged in an extremely thorough two-volume report that painted an unedifying pic-ture of safety on the UKCS.67 The disaster was caused primarily by a failure of the permit to work (PTW) system, particularly in the context of communication between shifts.68 This failure allowed equipment to be used when maintenance work on it had not been completed, result-ing in an escape of gas and an explosion.69 An already serious incident was exacerbated by several other fac-tors, which even individually would have raised serious doubts about the fitness for purpose of the then-current regulatory regime. First, two sis-ter platforms that shared pipeline infrastructure with the Piper Alpha continued to pump hydrocarbons after the initial explosion, thus feed-ing the fires.70 Second, the Offshore Installation Manager attempted “no initiative in an attempt to save life.”71 Third, the initial explosion destroyed or incapacitated emergency systems, such as fire control.72 Fourth, despite the fact that, by chance, a fire-fighting vessel was close by in addition to the platform’s dedicated standby vessel, neither effectively

64 See Cullen Report, supra note 46, ¶¶ 4.1–.17. 65 See id. ¶ 2.1; John M.T. Balmer, The BP Deepwater Horizon Débâcle and Corporate Brand

Exuberance, 18 J. Brand Mgmt. 97, 100 (2010). 66 See Cullen Report, supra note 46, ¶ 1.1. 67 See generally id.; infra notes 69–77 and accompanying text. 68 See Cullen Report, supra note 46, ¶¶ 6.188–.194, 11.1–.14. 69 See id. 70 See id. ¶¶ 7.34–.35, 7.47. The two sister platforms were Claymore and Tartan. See id. 71 See id. ¶ 8.35. 72 See id.


mitigated the disaster.73 Lord Cullen criticized the platform’s operator, Occidental Petroleum (Caledonia) Ltd., as being unprepared for a ma-jor emergency, and for having adopted a superficial attitude to such risks.74 The appropriate safety arrangements were frequently not in place, and even when present were often ignored—the PTW system be-ing a clear example.75 The regulator was also the subject of stern criti-cism. Lord Cullen described the PED’s inspections as “superficial to the point of being of little use as a test of safety on the platform”76 and not really an effective means of assessing the management of safety.77 Taken together, these criticisms essentially undermined the assumptions on which the existing regulatory approach was based.

B. Safety Case: The Move from Prescriptive to Goal-Setting Regulation

Lord Cullen made 106 recommendations with regard to the im-provement of the regulation of safety offshore.78 In terms of regulatory architecture, he recommended removal of responsibility from the PED and its transfer to the HSE.79 With regard to regulatory orientation, Cul-len’s approach called for the operator of each installation on the UKCS to submit a “safety case” to the HSE.80 This document would make the case to the regulator that the installation was safe both in terms of its design and its operation.81 It would thus demonstrate that certain objec-tives had been met, including: (1) the operator’s safety management system is adequate to ensure the safe design and the operation of the installation; (2) it utilizes safe equipment; (3) potential major hazards to the installation are identified, and preventive or mitigation measures adopted; and (4) there is adequate provision to ensure, in the event of a major emergency affecting the installation, a temporary safe refuge for personnel and their full evacuation, escape, and rescue.82 To be clear, this approach involved an abandonment of any notion that safety rules developed by government agencies, no matter how flexible the form, could provide a detailed and comprehensive code

73 Id. ¶¶ 9.41–.42, 9.49. 74 Cullen Report, supra note 46, ¶ 14.52. 75 See id. 76 Id. ¶ 15.48. 77 See id. ¶ 15.50. 78 Id. at 387. 79 Id. at 392 (Recommendation 25). 80 Cullen Report, supra note 46, at 387 (Recommendation 1). 81 Id. at 387 (Recommendation 2(i)). 82 Id. at 387–88 (Recommendation 2).


covering all aspects of the industry.83 In its place, Cullen placed the key responsibility on the operator. The latter would be required by means of a “Formal Safety Assessment” to identify risks to occupational health and safety, both catastrophic and mundane; to show to the regulator, includ-ing where necessary by means of “Quantified Risk Assessment,” that such risks had been minimized; and to indicate in practical terms how this risk minimization had been or would be achieved.84 Lest there be any doubt about the extent of this shift in thinking, Cullen stated that “a regulator cannot be expected to assume direct responsibility for the on-going management of safety . . . [this] is and remains in the hands of the operator.”85 This approach, of course, implied that the orientation of safety regulations would change. Cullen wanted the existing prescrip-tive regulations to be replaced as far as possible with goal-setting regula-tions.86 He was concerned that prescriptive regulation had actually con-tributed to problems insofar as it encouraged a compliance mentality rather than the sort of workplace-specific assessment of risks envisaged by the 1974 Act.87 According to Cullen, prescriptive regulations were ill-suited to potential risks arising from the interaction of components, as had been the case with the Piper Alpha disaster.88 Insofar as Cullen sup-ported the view of one witness to the Inquiry who suggested that safety could not be legislated,89 one may readily appreciate the extent to which there was a break with the pre-existing approach.

83 See id. ¶ 21.4. 84 Id. ¶¶ 17.40, 17.53. 85 Id. ¶ 21.4. 86 Cullen Report, supra note 46, ¶ 21.69–.70. The recommendation was that the Con-

struction and Survey Regulations, the Fire Fighting Regulations, the Life-Saving Appli-ances Regulations, and the Emergency Procedures Regulations should be revoked and replaced by:

(i) Construction Regulations, covering inter alia the structure and layout of the installation and its accommodation; (ii) Plant and Equipment Regula-tions, covering inter alia plant and equipment on the installation and in par-ticular those handling hydrocarbons; (iii) Fire and Explosion Protection Regulations, covering inter alia both active and passive fire protection and ex-plosion protection; and (iv) Evacuation, Escape and Rescue Regulations, cov-ering inter alia emergency procedures, life-saving appliances, evacuation, es-cape, and rescue.

Id. Each of these sets of regulations should include goal-setting regulations as their main or primary provisions and should be supported by guidance notes giving non-mandatory advice. Id. at ¶¶ 21.67, 21.71.

87 See id. ¶ 21.51. 88 See id. ¶ 21.42. 89 Id. ¶ 21.4. The witness was Mr. R.E. McKee, Chairman and Managing Director of

Conoco (UK) Ltd. Id.


The Government accepted all of the 106 recommendations.90 The foundation for Cullen’s new regulatory orientation was laid by the Off-shore Safety Act 1992,91 which finally extended the Health and Safety at Work etc. Act 1974 offshore in its entirety, and permitted regulations to be made to repeal those made under the Mineral Workings (Offshore Installations) Act 1971.92 There then followed the Offshore Installa-tions (Safety Case) Regulations 1992,93 requiring operators to prepare safety cases for each installation on the UKCS,94 which the HSE must accept before operations are permitted.95 The responsible party pre-paring the safety case has to include sufficient particulars to demon-strate that: (1) the management system is adequate to ensure that rele-vant statutory provisions would be complied with; (2) adequate arrangements are in place for auditing and reporting; (3) all hazards with the potential to cause a major accident are identified; and (4) risks are evaluated and measures taken to reduce them to the lowest level reasonably practicable.96 The idea that the safety case should be a “liv-ing document”97 was embodied in Regulation 9, which provided that an operator or owner should revise the safety case as often as re-quired.98 If a proposed revision would make the safety case “materially different” from the latest version submitted to the regulator, then fur-ther acceptance by the HSE is required.99 The same regulation also re-quires resubmission of the safety case every three years and reaccep-tance by the regulator before operations continue.100 As an indication of the extent to which responsibility for the development of detail had passed from the regulator to the operator, it is noteworthy that Regula-tion 10 imposes a duty on the operator or owner to ensure that health and safety procedures and arrangements contained in the safety case

90 Safety on RasGas Alpha, RasGas Mag., Dec. 2006, at 24, 25, available at http://www.

rasgas.com/rg/files/articles/RGMagazine16.24-27.pdf. For the parliamentary debate, see 187 Parl. Deb., H.C. (6th ser.) (1991) 472–567; 180 Parl. Deb., H.C. (6th ser.) (1990) 329–45.

91 See generally Offshore Safety Act, 1992, c. 15. 92 Id. § 1. 93 Offshore Installations (Safety Case) Regulations 1992, S.I. 1992/2885. 94 Id. art. 4 ¶ (1). 95 Id. art. 4 ¶ (2), (5)–(6). 96 Id. art. 8. This ALARP standard (As Low As Reasonably Practicable) is derived from

the Health and Safety Work, etc. Act, 1974, c. 37, § 2(2)(a). 97 Cullen Report, supra note 46, ¶ 17.46. 98 Offshore Installations (Safety Case) Regulations 1992, S.I. 1992/2885, art. 9. 99 Id. 100 Id.


are actually followed, and should there be a breach of that duty, crimi-nal liability could arise.101

The safety case was, of course, only one component of the new regulatory orientation envisaged by Lord Cullen. New goal-setting regu-lations to replace the existing prescriptive ones were also required.102 These were introduced progressively between 1995 and 1998.103 At first sight, the level of detail in these regulations can give the impression that they are really prescriptive rather than goal-setting regulations. On closer inspection, however, while it is undoubtedly true that some ele-ments of prescription remain, significant issues are in fact subject to a goal-setting approach.

III. The Recent Evolution of the Safety Case Approach

A. 2005 Regulations

The 1992 Safety Case Regulations and the supporting goal-setting regulations were of course a significant innovation in the offshore envi-ronment, so it is perhaps not surprising that they did not get everything right first time around. Noting difficulties with the operation of the 1992 regulations, the HSE repealed and replaced them with an up-dated set in 2005.104 That said, given the flexibility of the safety case approach and the fact that the safety case itself was supposed to be a living document, it might appear surprising that any such modification would be required. The regulator had observed, however, that the 1992 regulations were increasingly perceived to impose an excessive bureau-cratic burden.105 Furthermore, even if there had been a significant im-provement in health and safety offshore in the period since the new

101 Id. reg. 10. 102 Cullen Report, supra note 46, ¶ 21.69. 103 Offshore Installations and Pipeline Works (Management and Administration)

Regulations, 1995, S.I. 1995/738; Offshore Installations (Prevention of Fire and Explosion, and Emergency Response) Regulations, 1995, S.I. 1995/743; Pipelines Safety Regulations, 1996, S.I. 1996/825; Offshore Installations and Wells (Design and Construction, etc.) Regulations, 1996, S.I. 1996/913; Diving at Work Regulations 1997, 1998, S.I. 1997/2776; Lifting Operations and Lifting Equipment Regulations, 1998, S.I. 1998/2307.

104 Offshore Installations (Safety Case) Regulations 2005, 2006, S.I. 2005/3117. 105 Health & Safety Comm’n, Proposals to Replace the Offshore Installations

(Safety Case) Regulations 1992, at 4 (2004).


approach was introduced, there appeared to be a diminishing return with each successive triennial resubmission of the safety cases.106

ions.113

Under the 2005 regulations, accordingly, the triennial resubmission requirement was replaced by a five year “thorough review” with the op-tion for the HSE to direct otherwise.107 In regards to the problem of diminishing returns from the 1992 approach, the 2005 regulations in-troduced changes to the requirements relating to workforce involve-ment. The new regulations require the safety case to summarize consul-tation with the workforce not only with regard to its preparation, but also its revision and review.108 The HSE is trying to ensure that the work-force is directly engaged in the safety case process on an ongoing basis. The HSE also issued new guidance concerning risk assessment.109 Here the regulator notes that the 1992 regulations focused attention on Quantified Risk Assessment (QRA), which often required specialist consultants to be involved.110 While this appeared to be useful in the post-Piper Alpha era, the HSE states that the understanding of offshore risks is now mature. Accordingly, it urges risk assessment to focus on adding value and to be management-owned rather than consultant-owned.111 The guidance notes that risk assessment should be propor-tionate to the complexity of the problem at hand and the magnitude of risk.112 QRA thus applies only where the risk level and the complexity of a problem are high, with qualitative and semi-quantitative ap-proaches being identified as appropriate for lower level situat With the appearance of the 2005 regulations, therefore, it is rea-sonable to assume that the regulatory regime for health and safety at

106 See generally Health & Safety Comm’n, A Strategy for Workplace Health and

Safety in Great Britain to 2010 and Beyond (2004); Health & Safety Comm’n, supra note 105.

107 Offshore Installations (Safety Case) Regulations 2005, 2006, S.I. 2005/3117, art. 13. Note that there is an exception to this rule where there are “material changes” which will still require acceptance. See id. art. 14; see also Health & Safety Exec., Offshore Installations (Safety Case) Regulations 2005, Regulation 13: Thorough Review of a Safety Case, Offshore Information Sheet No. 4/2006 (2006); Offshore Safety Case Handling & Assessment Manual Thorough Review Summaries, Health & Safety Executive, http://www.hse.gov.uk/ offshore/scham/reviewsummaries.htm (last visited Apr. 15, 2011).

108 Offshore Installations (Safety Case) Regulations 2005, 2006, S.I. 2005/3117, sched. 2, ¶ 3 (amending, consequently, the Offshore Installations (Safety Representatives and Safety Committees) Regulations, 1989, S.I. 1989/971).

109 Health & Safety Executive, Guidance on Risk Assessment for Offshore In-stallations, Offshore Information Sheet No. 3/2006, at 1 (2006).

110 Id. at 2. 111 Id. 112 Id. at 3. 113 Id.


work offshore had reached a stage of maturity commensurate with the maturity of the UKCS as an established hydrocarbon province. In fact, there is evidence that the safety case approach recently faced its most significant challenge.

B. Recent Evidence of Problems with the Safety Case Approach?

During inspections of offshore installations for efforts to reduce hydrocarbon releases between 2000 and 2004, the HSE became con-cerned that the condition of the infrastructure was deteriorating.114 It therefore established an initiative to consider asset integrity, designated Key Programme 3 (KP 3).115 The new regulations required the inspec-tion of some 100 installations on the UKCS, with specific attention paid to the maintenance management of safety critical elements.116 Insofar as there is a close link between this issue and Lord Cullen’s concept of the safety case as a “living document,” the findings of this initiative make for troubling reading.117 The inspections found, for example, that the quality of maintenance management varied considerably across the industry and even between installations operated by the same com-pany.118 These problems appeared to be due to difficulties in tracking which equipment was defective or overdue for maintenance.119 The regulator uncovered “a poor understanding across the industry of [the] potential impact of degraded, non-safety-critical plant and utility sys-tems on safety-critical elements in the event of a major accident,”120 and that “[t]he role of asset integrity and [the] concept of barriers in major hazard risk control” was “not well understood.”121 With respect to the condition of the infrastructure as a whole, there was some posi-tive news, as structural integrity and the main hydrocarbon boundary were both “reasonably well controlled.”122 However, there were also more worrying findings to the extent that other parts of the infrastruc-ture, such as pipes and valves, were in decline.123

114 KP 3 Report, supra note 10, at 5. 115 Id. 116 Id. 117 See id.; Offshore Installations (Safety Case) Regulations 1992, 1993, S.I. 1992/2885,

art. 9 (U.K.). 118 KP 3 Report, supra note 10, at 6. 119 Id. at 11–13. 120 Id. at 6, 13. 121 Id. at 6. 122 Id. 123 Id.


The HSE’s explanation for these findings lay in three underlying problems relating to learning, the engineering function, and leadership. First, in relation to learning, there were problems both of inadequate auditing and monitoring and of a lack of processes to allow for embed-ded learning.124 Second, the engineering function appears to be de-clining in strength relative to other functions within oil companies.125 While the HSE did not spell out which other functions engineering had lost out to, the inference is that these were financial.126 This conclusion is supported by the third underlying problem identified by the regula-tor—leadership. While senior management must inevitably balance safety and financial risks in making spending decisions, the HSE was concerned that there was inadequate understanding of the impact on such decisions of operating with “degraded [safety critical elements] and safety-related equipment.”127 Taken together, the findings of the KP 3 Report raise the question of how, if the safety case was operating as it was intended to, such a situation could have arisen. Do these findings indicate a fatal flaw in the safety case approach? Or does the exposure of problems by HSE sug-gest that the approach remains robust, provided that it is supported by a regulator whose attention is appropriately focused? Before these questions can be answered, it is necessary to consider what impact the events of April 2010 in the Gulf of Mexico might themselves have on offshore health and safety regulation on the UKCS.

C. Possible Effects of the Deepwater Horizon Disaster on United Kingdom Offshore Safety Regulation

Whether or not one is persuaded that oversight by the HSE is suf-ficient to mitigate any risks associated with the safety case approach, it appears certain that there will be no effort on the part of either gov-ernment or regulator to reverse the trend away from prescriptive regu-lation on the UKCS.128 Even the occurrence of the Deepwater Horizon disaster has not shaken the confidence of the various interested parties in the suitability of the current regulatory approach. Following the dis-aster, the Secretary of State for Energy and Climate Change announced

124 KP 3 Report, supra note 10, at 8. 125 Id. 126 See id. at 12. 127 Id. at 8. 128 See Press Release, U.K. Dep’t of Energy & Climate Change, UK Increases North Sea

Rig Inspections ( June 8, 2010), available at http://www.decc.gov.uk/en/content/cms/ news/pn10_067/pn10_067.aspx.


a review of U.K. law and regulation relating to offshore health and safety.129 This review fairly quickly concluded that the existing regime was “fit for purpose.”130 There was, however, no denying that lessons might be learned, and to this end both the regulator and the industry are currently engaged in further investigations. The HSE has estab-lished the Deepwater Horizon Review Group, which is considering the findings of the investigation into the accident with a view to making “recommendations as necessary with regard to the control of wells and the safety of the exploitation of offshore oil and gas in the UK.”131 Oil & Gas UK, the principal body representing the industry on the UKCS, has set up the Oil Spill Prevention and Response Advisory Group, bringing together industry, regulators, and trade unions “to provide a focal point for the sector’s review of the industry’s practices in the UK, in advance of the conclusion of investigations into the Gulf of Mexico incident.”132 Finally, at the level of the legislators, the House of Com-mons Energy and Climate Change Select Committee has heard oral evidence and received written submissions from a range of stakeholders in relation to deepwater development.133 Their recently published re-port clearly finds that the United Kingdom’s safety case approach is superior to the regulatory regime under which the Deepwater Horizon operated in the Gulf of Mexico.134 However, the report concurrently found “concern[] that the offshore oil and gas industry is responding to disasters, rather than anticipating worst-case scenarios and planning for high-consequence, low-probability events,” which is particularly troublesome given that the safety case approach was supposed to en-courage precisely that sort of anticipation and foresight.135 Legislative or regulatory change as a result of all these investigations and reviews cannot, therefore, be ruled out, but the general impression is that it will be business as usual.136 There has been a sense in both government

129 Id. 130 See id. 131 Deepwater Horizon Incident in the Gulf of Mexico, Health & Safety Executive,

http://www.hse.gov.uk/offshore/deepwater.htm (last visited Apr. 15, 2011). 132 Knowledge Centre: Oil Spill Prevention and Response Advisory Group (OSPRAG), Oil &

Gas UK, http://www.oilandgasuk.co.uk/knowledgecentre/OSPRAG.cfm (last visited Apr. 15, 2011).

133 See Energy & Climate Change Comm., UK Deepwater Drilling—Implications of the Gulf of Mexico Oil Spill, 2010–11, H.C. 450-I, ¶ 71, available at http://www. publications.parliament.uk/pa/cm201011/cmselect/cmenergy/450/450i.pdf.

134 Id. ¶ 34. 135 Id. ¶ 35. 136 See id. It is perhaps not insignificant that this Committee was not only concerned

with the adequacy of the regulatory regime, but also with knowing more about the contri-


and industry that the safety case approach on the UKCS makes it less likely that an accident like the Deepwater Horizon could occur.137

It is a question, however, whether this confidence is shared by European Union institutions. Both the European Parliament and the European Commission have taken a close interest in what has hap-pened in the Gulf of Mexico and in any ramifications for the industry operating in, or indeed from, the European Union. Each has indicated in recent months—through a Parliament resolution and a Commission communication, respectively—that legislative change at the European Union level may be necessary.138 References in the Parliament resolu-tion and the Commission communication to existing best practices139 might, of course, indicate that other Member States will be expected to adopt the United Kingdom’s approach. On the other hand, the United Kingdom may not be the country these institutions have in mind when they refer to existing best practices. The Parliament, for example, makes mention of only one Member State in its resolution—the United Kingdom—and that is a negative reference to the latest serious injury and fatality statistics reported by the HSE.140 As a consequence, it is pos-sible that the safety case approach itself may be under very close scru-tiny from Europe in the months ahead, and the European Union may reach very different conclusions with very different implications for the United Kingdom’s regulatory approach to health and safety offshore.141

Conclusion

The evolution of the regulation of health and safety on the UKCS is a rich source of inspiration for any jurisdiction considering reform in this regard. The occurrence of serious accidents forced the United

bution that will be made by deepwater resources to the United Kingdom’s energy security. See id. ¶ 138. In this regard, it concluded that any moratorium on deepwater drilling on the UKCS would harm energy security and diminish the contribution of the offshore oil and gas industry to the British economy more generally. See id.

137 See Deepwater Horizon Incident in the Gulf of Mexico, supra note 131. 138 See Communication from the European Commission to the European Parliament and the

Council: Facing the Challenge of the Safety of Offshore Oil and Gas Activities, § 1, SEC (2010) 1193 final (Dec. 10, 2010) [hereinafter Commission Communication]; Resolution of 7 Octo-ber 2010 on EU Action on Oil Exploration and Extraction in Europe, Eur. Parl. Doc. P7_TA(2010)0352 ¶ 16 [hereinafter E.U. Parliament Resolution].

139 See, e.g., Commission Communication, supra note 138, at 3, 5. 140 See E.U. Parliament Resolution, supra note 138, ¶ 25; see also Offshore Safety Statistics Bul-

letin 2009/10, Health & Safety Executive, http://www.hse.gov.uk/offshore/statistics/ tat0910.htm (last visited Apr. 15, 2011).

141 See E.U. Parliament Resolution, supra note 138, ¶ 25; see also Offshore Safety Statistics Bulletin 2009/10, supra note 140.


Kingdom to examine closely the previously existing approaches, and to consider what alternatives might represent improvements. As a conse-quence, over the four-and-a-half decades of hydrocarbon operations on the UKCS, three distinct approaches to health and safety regulation have been implemented: first, the original self-regulatory approach under the license;142 second, the detailed prescriptive approach under the 1971 Act and the subsequent regulations;143 and finally, the goal-setting, safety case approach following Lord Cullen’s post-Piper Alpha recommendations.144 The first two approaches each had their short-comings revealed in the context of a serious accident. The third ap-proach has not been without its difficulties, but has so far not been tested by the occurrence of a major disaster. That is not to say that goal-setting regulation and safety cases have been uncontroversial. The problems with asset integrity revealed by the HSE in 2007145 could be read as a fundamental questioning of the as-sumptions underpinning the safety case approach—in particular, the notion of the instrument as a living document, subject to ongoing modification based on monitoring and review of the operator’s safety management system.146 The question, therefore, is whether this prob-lem fatally undermines the goal-setting, safety case approach, calling instead for a further stage of regulatory development. The conclusion reached by this Article is that it does not. It is cer-tainly the case that the appearance of asset integrity problems is deeply troublesome. A failure to properly manage the maintenance of safety critical elements and to strike an appropriate balance between safety and financial risk could well have been the precursor to a serious acci-dent. But the first question to be answered by anyone proposing to re-place the safety case approach is: replace with what? It is not obvious that any system would constitute an improvement beyond the current approach, nor is it clear that a return to a previous approach would unquestionably represent progress. As a consequence, it may be sug-gested that it is not so much the safety case approach in and of itself that is problematic, but rather the way it is implemented.147 The level of analysis possible within the confines of this brief Article does not allow

142 Petroleum (Production) Regulations, 1935, Stat. R. & O. 1935/426. 143 See Bentham, supra note 30, at 275. 144 See Cullen Report, supra note 46, ¶ 21.69; see also id. ch. 23. 145 KP 3 Report, supra note 10, at 5. 146 See Offshore Installations (Safety Case) Regulations 1992, 1993, S.I. 1992/2885, art.

9 (U.K.). 147 See Cullen Report, supra note 46, ¶ 21.51.


more than a relatively superficial appraisal. There is nevertheless clear evidence from the 2007 asset integrity report that the degree of free-dom afforded the industry by the safety case approach allows the de-ployment of its expertise and experience in the identification of haz-ards and risks and in their mitigation and control.148 But the 2007 asset integrity report equally presents the possibility, even inadvertently, that the industry will strike a problematic balance between safety and finan-cial risks. If there is a lesson from the experience of the 2007 report, therefore, it is that the role of the regulator is in no way diminished in the context of the safety case approach compared to the prescriptive regulatory approach. Rather, a safety-case regulator must be refocused on ensuring that the industry remains open to the appropriate range of risks faced in the operation of its safety management systems, and does not allow the inevitable concern with cost to blind it to the reality of safety risks.149 The critic may well conclude that the very possibility that such a situation could arise is evidence that a return to prescriptive regulation is warranted. However, consider the cognitive burden that such an approach imposes on the regulator, compared to the safety case approach. Prescribing in detail for the safety of an industry that is considerably more complex now than it was when Lord Cullen pre-pared his report represents an impossible task for any regulator, whereas focusing on what it is that the industry is not seeing as it oper-ates its safety management systems is a much more straightforward de-mand. As the United States considers whether the changes already made to the regulatory architecture, which mirror those in the United Kingdom after Piper Alpha, should also be followed by changes to regulatory orientation, it should not feel compelled to follow the Brit-ish example slavishly. There may nevertheless be an opportunity for a selective borrowing of some of the regulatory ideas that represent the product of a long and difficult evolution on the UKCS.

148 KP 3 Report, supra note 10, at 5. 149 See id.

INSERTED BLANK PAGE

THE EXXON VALDEZ RESURFACES IN THE GULF OF MEXICO . . .

AND THE HAZARDS OF “MEGASYSTEM CENTRIPETAL DI-POLARITY”

Zygmunt J.B. Plater*

Abstract: The 2010 BP Deepwater Horizon blowout spill in the Gulf of Mexico shocked the nation with the amount of oil and harm it unleashed upon the Gulf and its natural and human ecosystems. As details of the ca-lamity became available, they revealed frustrating parallels to the 1989 Exxon Valdez oil spill in the Gulf of Alaska in terms of causation and im-paired response capability. Similar systemic deficits characterized the ac-tions of corporate managers and state and federal regulators in the oil industry of both Gulfs. In a “di-polar” system where industry and govern-ment regulators come too close together, responsible overall manage-ment of operations and risks suffers. The lessons and recommendations incorporated in the 1990 Alaska Oil Spill Commission’s Final Report on the Exxon Valdez spill, including watchdog citizen councils, were highly germane but largely ignored or forgotten in the decades between the Alaska Report’s release and the 2010 BP tragedy. This Article reviews the Gulf of Mexico spill in light of the Gulf of Alaska spill, and notes how this time around we must finally learn how to deal more seriously with the mega-risks posed when di-polar convergences occur in these megasystems of hydrocarbon production and transport.

* © 2011, Zygmunt J.B. Plater, Professor of Law, Boston College Law School. The au-

thor chaired the State of Alaska Oil Commission’s legal task force after the 1989 wreck of the M.S. Exxon Valdez. This Article is built upon a shorter piece, published as part of an Environmental Law Institute Report. See Zygmunt J.B. Plater, Learning from Disasters: Twenty-One Years After the Exxon Valdez Oil Spill, Will Reactions to the Deepwater Horizon Blowout Fi-nally Address the Systemic Flaws Revealed in Alaska? 40 Envtl. L. Rep. 11,041, 11,041 n.2 (2010), available at http://www.elr.info/articles/vol40/40.11041.pdf. Both pieces bene-fited from the help, gratefully acknowledged, of two research assistants, Brendan Boyle and Joseph Horton, both of the Boston College Law School Class of 2012. The views ex-pressed here, other than those cited to the Commission and other sources, are the au-thor’s own and not those of the Commission or of my research assistants. Given the on-rolling current events underlying this present analysis, a number of citations herein are necessarily given to press accounts which may be revised with further information. While noting this caveat, it is evident that many solid journalistic reports have come from the oiled waters and beaches of the Gulf, and that over time the factual record will, of course, be substantially deepened by historical vetting.

391


Introduction

Twenty-one years ago, after the calamitous Exxon Valdez oil spill in Alaska’s Prince William Sound, the pervasive systemic flaws—that made a major calamity in the Gulf of Alaska not just possible, but probable1— were largely cloaked behind the figure of a captain with a drinking problem.2 By any analysis, the Gulf of Mexico calamity, almost twenty times larger than the Exxon Valdez spill,3 was, like the 1989 spill, a sys-temic dysfunction resulting from marked shortcomings of industry and government regulation in multiple aspects of the overall oil production and transport process, not an exceptional anomaly attributable to just one well, one company, or one dereliction. 4

1 See Alaska Oil Spill Comm’n, Final Report: SPILL: The Wreck of the Exxon Val-dez: Implications for Safe Transport of Oil 206 (1990) [hereinafter Alaska Comm’n Report], available at http://www.arlis.org/docs/vol1/B/33339870.pdf. The Alaska Commis-sion issued an extensive final report with appendices, available through the Alaska Resources Library and Information Services website, http://www.arlis.org/docs/vol2/a/EVOS_FAQs. pdf.

2 See Alaska Comm’n Report, supra note 1, at 7. 3 See Zygmunt J.B. Plater, Learning from Disasters: Twenty-One Years After the Exxon Valdez

Oil Spill, Will Reactions to the Deepwater Horizon Blowout Finally Address the Systemic Flaws Re-vealed in Alaska? 40 Envtl. L. Rep. 11,041, 11,041 n.2 (2010), available at http://www. elr.info/articles/vol40/40.11041.pdf. The Exxon Valdez spill is generally reported as hav-ing released approximately 250,000 barrels, or almost eleven million gallons, of crude oil. See Alaska Comm’n Report, supra note 1, at iii. Estimates of the total oil released in the Gulf have been contentious; however, the government now estimates that the BP Deepwa-ter blowout spill appears to have released roughly five million barrels, at a rate between 50,000 to 60,000 barrels per day from April 20, 2010, until a top cap was applied on July 15, 2010. See Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling 146–47, 167 (2011) [hereinafter BP Commission Report]. It appears that BP will chal-lenge this estimate because, among other reasons, fines are based on the total oil released. See Robert L. Cavnar, BP Wins: EPA Will Agree to Cut Oil Spill Estimate, Huffington Post (Feb. 2, 2011, 9:07 AM), http://www.huffingtonpost.com/robert-l-cavnar/bp-wins-epa-will- agree-to_b_817327.html.

4 Though the systemic similarities of the two spills are the focus of this analysis, it should be noted that there are marked physical differences between the two spills. No oil spill, of course, like no coastal setting, is exactly like any other. The shores of coastal Alaska are very different from the reedy marshes and beaches of the Gulf coast in ecology and climate. Oiled sandy beaches may be easier to clean than cobbled stone beaches where the oil penetrates deeply. Marshes, however, are far more problematic. Plater, supra note 3, at 11,042 & n.5. Warmer temperatures can break down oil faster. Cassie Rodenberg, How Oil Breaks Down in Water, Popular Mechanics (May 7, 2010, 11:21 AM), http://www.popularmechanics.com/ science/energy/coal-oil-gas/oil-spill-water-chemistry. The winds and currents of the Gulf of Mexico are more complex than in the Gulf of Alaska. See Pete Spotts, Gulf Oil Spill Driven by Complex Ocean Currents and Eddies, Christian Sci. Monitor, May 15, 2010, http://www. csmonitor.com/USA/2010/0515/Gulf-spill-oil-driven-by-complex-ocean-currents-and-eddies.

The Exxon Valdez oil spill soiled a coastal impact zone inhabited by no more than 30,000 people, with a sparse economy and only one state jurisdiction. Plater, supra note 3,

2011] Lessons Lost: Megasystems in Alaska & the Gulf 393

The system of oil production and transport in the Gulf of Mexico area, as in Alaska, is a sprawling, complex, multi-corporation, multi-agency megasystem, presenting multiplied points of risk and magnified potential for a mega-catastrophe.5 The central proposition of this Article, and a primary recommen-dation of the State of Alaska Oil Spill Commission in 1990, is that megasystems, with the potential for mega-catastrophe, require signifi-cant expansion of institutional perspectives beyond the traditional de-fault configuration of public-private industry governance.6 The stan-dard governance design in modern society, including governance of megasystems like the oil production and transportation sphere, is im-plicitly a “di-polar” arrangement7—a public-private societal governing structure comprised of two theoretically counter-balancing establish-ments. On one side are the industry players in the marketplace, gener-ating jobs, technology, wealth, and political power. On the other side are regulatory agencies, state and federal, tasked with monitoring the industry and protecting the public from industry’s market failure ex-ternalities. As the Exxon Valdez spill revealed, however, and as decades

at 11,042. The Gulf of Mexico’s affected coastal impact zone is home to nearly fourteen million people—if including the coastal impact zone population of Texas—with a complex coast-oriented economy in five separate states. U.S. Census Bureau, P25-1139, Coastline Population Trends in the United States: 1960 to 2008, at 9 (2010). In the Gulf of Mexico the defendants’ financial liability is likely to be commensurately much larger than Exxon’s payout in Alaska. Plater, supra note 3, at 11,042. Exxon paid roughly $5 billion—compensatory settlements of $507.5 million paid to private and municipal plaintiffs, which doubled in punitive damages after Exxon Shipping v. Baker, 554 U.S. 471 (2008), $30 million in interest, criminal fines of $25 million, plus $125 million in criminal restitution, $900 million in civil settlement with Alaska and the United States, and approximately $2.4 bil-lion in remediation expenses. Some of these amounts appear to have been covered by insurance or offsets. A precedent-setting Exxon Valdez “re-opener” clause was triggered in 2006 by Alaska’s request for an additional $92 million for ecological damages. See Plater, supra note 3, at 11,042 & n.6. See generally William H. Rodgers, Jr. et al., The Exxon Valdez Reopener: Natural Resources Damage Settlements and Roads Not Taken, 22 Alaska L. Rev. 135 (2005) (urging the State of Alaska and the United States to seek enforcement of the re-opener clause).

5 BP Played Central Role in Botched Containment of 1989 Exxon Valdez Disaster, Democracy Now (May 26, 2010), http://www.democracynow.org/2010/5/26/bp_played_central_role_in_botched.

6 See generally Alaska Comm’n Report, supra note 1, at v, 129, 139–40. 7 I have adapted the description of the standard model of traditional modern societal

governance as “di-polar,” from a phrase used by Professor Lon Fuller in a slightly different context. See Lon L. Fuller, The Forms and Limits of Adjudication, 92 Harv. L. Rev. 353, 383 (1978); Zygmunt J. B. Plater, Dealing with Dumb and Dumber: The Continuing Mission of Citizen Environmentalism, 20 J. Envtl. L. & Litig. 25 (2005). On one pole is the market dynamo that drives our economy, generating innovation, wealth, jobs, culture, and negative exter-nalities like pollution as well—and on the other, government agencies hold the primary role and responsibility of counterbalancing the excesses of the marketplace economy.


of political scientists have described as “iron triangles”8 and “agency capture,”9 the counter-balancing “poles” too often incline centripetal-ly10 into each other. The industry and agency players are too easily pulled together into a combined culture of complacency, collusion, and neglect.11 The major oil spill calamities in the two Gulfs have demonstrated that the standard di-polar governance model for oil megasystems pro-

8 The concept of “iron triangles” is a political science rubric that offers broad utility in understanding how modern government in reality functions, which often doesn’t resem-ble the process described in civics textbooks. “Iron triangles” are formed by the relation-ship among a regulated industry, the governmental agency (or agencies), and the bloc of legislators that hold especially strong affinities for that industry sector, typically served by a special-ized cadre of lobbyists. See, e.g., Fred Powledge, Water: The Nature, Uses, and Future of Our Most Precious and Abused Resource 286–89 (1982). Each point of the triangle looks out for and serves the other two points in political and economic terms. See id. The narrowed, focused interests of each of these triangles creates a powerful political status quo in their sector of governance, each point of the triangle motivated by its own intricate system of rewards. See id. In government as well as geometry, triangles are the strongest of all geometric shapes. The “iron triangle” term has useful descriptive application in a wide variety of special interest settings, some more benign than others. See id. There are iron triangles for mining, timber, chemicals, ranching and rangelands, highway construction, public works pork barrels, the defense procurement industry, as well as for education, medicine and hospitals, sewage treatment, NASA, and more. See id.

9 In political science, “agency capture” is a well-known tendency of industry-agency convergence, and is part of the iron triangle phenomenon. A regulatory agency created in the fervor of a popular movement to regulate some designated problem may begin its life energetically pursuing the overall public interest, but over time its initiative gradually may be eroded into narrower views, intimately linked with the industry and problems it was intended to solve. See Richard B. Stewart, The Reformation of American Administrative Law, 88 Harv. L. Rev. 1669, 1684–87 (1975). Justice William O. Douglas said that “as I told my old friend, . . . Franklin Delano Roosevelt, . . . he should make every regulatory agency termi-nate after ten years. That’s all the time they’ll have to be effective before they are tamed.” The author recalls Justice Douglas saying this to a class of his at the University of Tennes-see (spring semester 1974); according to the author’s recollection, on other occasions Douglas reportedly stated the optimal agency lifetime as five years, not ten.

10 Centripetally: “moving or tending to move toward a center.” Oxford American Dictionary and Thesaurus 225 (2003).

11 See Alaska Comm’n Report, supra note 1, at 5, 186, 205–06.

[A] general complacency had come to permeate the operation and oversight of the entire system. . . . Privatization and self-regulation in oil transportation contributed to the complacency and neglect that helped cause the wreck of the Exxon Valdez. . . . Success bred complacency; complacency bred neglect; neglect increased the risk—until the right combination of errors finally led to an accident of disastrous proportions. All parties—the shippers, Alyeska, the Coast Guard and the State of Alaska—shared in the complacency that pro-duced this result. . . . [There was] a low level of vigilance and a discomforting level of comfort between the industry and Coast Guard regulators. State regu-lation had been withdrawn.

Id.


duces a complex but poorly coordinated, insufficiently vigilant, risk-prone plexus that cannot be relied upon for human or ecological safety. This failing is only multiplied as drilling pushes ever farther and deeper to develop hydrocarbons. To reform the problematic inertias observed within the Alaska oil megasystem, the Alaska Commission made fifty-nine substantial rec-ommendations, more than half of them relevant to oil megasystems beyond Alaska.12 One of the more significant recommendations was the call for creation of unique citizen councils.13 The Commission urged that the traditional public-private management arrangement be significantly expanded by institutionalizing a savvy citizen watchdog presence within the system—regional citizen advisory councils (RCACs).14 The Oil Pollution Act of 1990 (OPA-90) incorporated that recommendation for Alaska waters,15 and the experience of RCACs in Alaska shows the promise and the challenges of integrating citizen ac-

on.

poses to bring the innovative RCAC con-pt

Alaska Commission recommendations that were partially incorporated

ti 16 The Commission’s innovative recommendation to create RCACs not only changed the public management perspectives of oil produc-tion and transport in Alaska,17 it also provides a potentially instructive model for managing oil production and other industrial megasystems in modern industrial democracies. Properly designed and imple-mented, RCACs provide a pluralistic structural design for governing, breaking up the centripetal tendencies of the usual agency-industry di-polar system. The 2011 Report to the President by the National Com-mission on the BP Deepwater Horizon Oil Spill and Offshore Drilling (“National Commission”) proce to the Gulf of Mexico.18 The hard systemic lessons learned twenty-one years ago in Alaska were largely forgotten or diluted over subsequent years, even the few

12 See id. at 129–71. 13 See id. at 139–40 (Recommendation 12). 14 See id. at 131 (Recommendation 3); see also id. at 139–40, 146, 163 (Recommenda-

tions 12, 26, and 49). 15 33 U.S.C. § 2732(d) (2006). 16 See infra Part III. 17 Joseph Horton, Citizen Watchdogs: Insulating Regional Citizen Advisory Councils—

Lessons Learned from the RCACs of Prince William Sound and Cook Inlet, D.105, at 3–5 (Nov. 5, 2010) (unpublished research memorandum), available at http://www.bc.edu/environmentallaw (follow “Boston College Law School Land & Environmental Law Program Sub-mission to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” hyperlink).

18 See BP Commission Report, supra note 3, at 212, 268–69, 281.


into OPA-90.19 The question for national energy law and policy now is whether, this time around, we will acknowledge and implement the les-sons for hard systemic change largely avoided two decades ago. There are many promising areas for reform, as noted in the work of the Na-tional Commission.20 The innovative RCACs constitute one significant potential improvement in the oil megasystem. The Deepwater Horizon tragedy will be a doubly disastrous occasion if it does not produce sys-temic changes for the future, as the Exxon Valdez spill markedly failed to do. As White House Chief of Staff Rahm Emanuel said in another context, “You never want a serious crisis to go to waste.” 21

I. Megasystems

Analyzing the role of oil production and transport in the life of modern society, the Alaska Commission described its broad and deep complexity as a “megasystem”:

[The world’s oil companies] have created a megasystem that carries oil from wellheads in the far corners of the earth to re-fineries in its major industrial centers. But this megasystem is fragile. It requires careful scrutiny from outside the industry in design, construction and operation. When it fails . . . entire coastlines are at risk. . . . Alaskans assume such peril daily . . . . Other Americans on three coasts face just as ominous a threat . . . . What will reduce these risks? Obviously, the present system, providing minimum penalties for creating massive environ-mental damage, has not deterred the industry from putting the coasts and oceans of the world at continual risk. The sys-tem calls out for reform. The mission of this commission is to explain what must be done and why.22

The BP blowout in the Gulf reflects virtually the same intercon-nected megasystem complexities and the same lack of unitary over-sight, inconsistent vigilance, and shortcutting as revealed in Alaska in the aftermath of the Exxon Valdez spill. The Alaska Commission con-cluded that the tragic incident was not primarily attributable to a cap-

19 Joe Stephens, Lessons from Exxon Valdez Spill Have Gone Unheeded, Wash. Post, July 14, 2010,

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/13/AR2010071306291.html. 20 See BP Commission Report, supra note 3, at 249–91. 21 Gerald F. Seib, In Crisis, Opportunity for Obama, Wall St. J., Nov. 21, 2008, at A2. 22 Alaska Comm’n Report, supra note 1, at v.


tain’s drinking, but rather that an accident of that nature and caliber was probably inevitable.23 As the Alaska Commission concluded, the Exxon Valdez spill was the predictable result of a megasystem that had developed a pervasive culture of complacency, collusion, and neglect.24 But for the most part these lessons were subsequently forgotten or di-luted.25 As the Alaska Commission gathered research and evidence in the aftermath of the Exxon Valdez spill, however, the commissioners were repeatedly confronted with examples of deficiencies throughout the corporate and governmental management of the sprawling inter-connected aggregation of elements that was the Alaska oil enterprise.26 The Alaska Commission’s report, instead of merely focusing on the 1989 calamity’s tanker transport element as initially planned, ulti-mately addressed issues that presented serious risks throughout all stages of the oil production and transport process. Problematic con-cerns were identified stretching from the various oil production areas on Alaska’s North Slope, across 800 miles of pipeline and pumping sta-tions, across three mountain ranges, to the large tank farm holding fa-cilities, onto the wharves—where tanker loading crews had been cut back to save money—and along a 2000-mile tanker route to refineries at Long Beach, California.27 Throughout that megasystem, risky cost-

23 See id. at 7 (“It was the result of the gradual degradation of oversight and safety prac-tices that had been intended, 12 years before, to safeguard and backstop the inevitable mistakes of human beings.”).

24 See id. at 206. 25 Stephens, supra note 19. 26 See generally Alaska Comm’n Report, supra note 1, at 129–71 (Findings and Rec-

ommendations). The deficiencies are noted throughout the Report text and reflected in the Recommendations as deficits requiring reform: the need to compensate for deficiency in prevention safety prioritizing (see Recommendation 1, 2, 4, 6, 8); the need for best available technology in corporate and agency implementation (Recommendation 7); the need for better state agency vigilance over corporate practices (Recommendations 10, 14–17, 25, 43–46); the need for better federal agency presence in overseeing corporate prac-tices (Recommendations 29–31); deficiencies in environmental safety reporting (Recom-mendation 33); and deficiencies in governmental and corporate incident response plan-ning (Recommendations 14, 18, 22, 38–45, 48–51). See id.

27 See id. at 5; Pipeline Facts, Alyeska Pipeline Service Company, http://www.alyeska-pipe.com/pipelinefacts.html (last updated May 28, 2010). According to the Alaska Com-mission’s Chairman and Executive Director, the Commission found deficiencies through-out the oil extraction and transport megasystem, and that is why the commissioners ulti-mately widened the focus from just addressing tanker transport. “But I wish we’d gotten more about pipelines into OPA-90,” said the Chairman. Telephone Interview with Walter Parker, Chairman, Alaska Oil Spill Comm’n (Mar. 17, 2011); see also Telephone Interview with John E. Havelock, Exec. Dir., Alaska Oil Spill Comm’n (Mar. 17, 2011).

A rough map graphic submitted to the Alaska Commission by the Boston College Exxon Valdez student research group, and used in some of the Commission discussions, illustrated the different interconnected sectors that constituted an integrated system with risks (often


cutting by Alyeska, the industry consortium—dominated in fact by BP28—that ran the Alaska oil system, and the acquiescence of under-vigilant government agencies, driven by profits, politics, and the neces-sities of oil supply, made breakdowns in operations and response possi-ble.29 As on-going investigations in the aftermath of the BP Deepwater Horizon blowout spill have revealed, there are fragilities and serious points of risk throughout the Gulf of Mexico oil megasystem as well,30 and not just for wells at great depth. The BP Deepwater Horizon blow-out was not an exceptional anomaly.31 Here is the apparent syllogism: the greater the size, complexity, and technical sophistication of the ele-ments of a megasystem, the greater the risk of mega-catastrophe—and the greater the need for extreme vigilance in design, coordination, and operation. Yet the bigger such megasystems become, the harder it is for corporate managers and government agencies alike to see, keep track of, and manage the cumulative mass of critical points of risk. Likewise, the bigger the megasystem, the greater the daily internal economic and political pressures to maximize short-term benefits, and, perversely, to fractionalize vigilance.

including catastrophic risks) throughout. See Bos. College Law Sch. Land & Envtl L. Program, Submission to the Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling, app. D.100 (Nov. 5, 2010), available at http://www.bc.edu/environmentallaw (follow “Boston College Law School Land & Environmental Law Program Submission to the National Com-mission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” hyperlink).

28 BP, at the time of the Exxon Valdez spill, had a 50.01% controlling interest within the seven-corporation Alyeska consortium, which meant that the Alyeska consortium’s operational decisions, much criticized by the Alaska Commission report, were driven by BP’s majority position. See Noaki Schwartz, BP Had a Key Role in the Exxon Valdez Disaster, ABC News, May 25, 2010, http://www.pottsmerc.com/articles/2010/05/25/news/doc4b fbbfae49ac8813211300.txt.

29 See Zygmunt J.B. Plater, A Modern Political Tribalism in Natural Resources Management, 11 Pub. Land L. Rev. 1, 6–10 (1990). These cost-cutting, risk-enhancing measures con-tributed substantially to causing the Alaska spill, including the exhaustion of tanker crew personnel and inadequate radar, and to major deficiencies in response capabilities after the spill occurrence. Id.; see also Alaska Comm’n Report, supra note 1, at 35 (“Although the U.S. Coast Guard promised to push for both systems, by the time the oil was flowing in 1977 the agency had not installed either full-coverage radar or any other electronic surveil-lance in the sound.”).

30 See BP Commission Report, supra note 3, at vii, 2, 62, 71, 78–83, 140, 174–96. 31 See id. at 122. The Commission found that the Minerals Management Service (MMS)

lacked the resources, experience, and training to adequately ensure safe oil platform op-erations. Id. at 57, 126–27. The “root causes [of the BP Deepwater Horizon Oil Spill] are systemic and, absent significant reform in both industry practices and government poli-cies, might well recur. The missteps were rooted in systemic failures by industry manage-ment (extending beyond BP to contractors that serve the industry), and also by failures of government to provide effective regulatory oversight of offshore drilling.” Id. at 122–23.


In the Gulf of Mexico region, fractionalized and less-than-vigilant government management practices appear to have been pervasive, paralleling insufficient industry operational practices. State and federal agencies exhibited negligence and lassitude toward operations of all the oil companies in the Gulf, not just BP.32 Critical geological informa-tion was routinely insufficiently available to permitting authorities and oversight monitors.33 The various oil production transport systems— tankers, lighters, and pipelines—have broadly posed their own prob-lems of safety and environmental threat and have not been adequately factored into the regulatory process.34 And the risks are synergistic. For example, the construction and maintenance of pipelines and transit canals through barrier islands and Delta lands, to service hundreds of near-shore oil operations—between 9000 and 10,000 miles of channeli-zation in Louisiana—has been virtually unaccounted for in oil permit-ting, but was a major reason why Hurricanes Katrina and Rita found coastal populations so unprotected.35

II. The Hazards of Megasystem Centripetal Di-Polarity

The commission found a low level of vigilance and a discomforting level of comfort between the industry and Coast Guard regulators. State regulation had been withdrawn.36

A. Patterns of Preparation Failure: Alaska to the Gulf of Mexico

The preconditions for destructive discharges from oil megasystems can lie latent within the process of planning, permitting, constructing,

32 Plater, supra note 3, at 11,042. 33 Eric French et al., Trade Secrets and Proprietary Information, D.128, at 2 (Nov. 5,

2010) (unpublished research memorandum), available at http://www.bc.edu/environmental law (follow “Boston College Law School Land & Environmental Law Program Submission to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” hyperlink).

34 Oliver A. Houck, Down on the Batture 205 (2010); Oliver A. Houck, Land Loss in Coastal Louisiana: Causes, Consequences, and Remedies, 58 Tul. L. Rev. 3, 25–28 (1983). The serious social externalities of oil industry practices in Louisiana are illustrated in the famous Testbank case. See Louisiana ex rel. Guste v. Testbank, 752 F.2d 1019 (5th Cir. 1985).

35 See Melanie MacWilliams-Brooks et al., Categorical Exclusions from EIS, D.107, at 4–5 (Nov. 5, 2010) (unpublished research memorandum), available at http://www.bc.edu/environmentallaw (follow “Boston College Law School Land & Environmental Law Program Submission to the National Commission on the BP Deepwater Horizon Oil Spill and Off-shore Drilling” hyperlink); see also Joel Sartore, Image 1346387 of Official National Geographic Prints Store, Nat’l Geographic, http://gallery.pictopia.com/natgeo/photo/9190416/ (last visited Apr. 15, 2011) (depicting canals carved through Louisiana wetlands).

36 Alaska Comm’n Report, supra note 1, at 186.


and operating oil drilling systems, and designing insufficient precau-tionary safeguards. In Alaska the 1990 Commission noted that the entire system had been developed with shortcuts and a primary focus on pro-duction rather than safety.37 The official state and local regulatory agen-cies often uncritically accepted industry data and assurances on the de-sign and safety of system elements, issued permits without required documentation, did not insist on strict compliance with corporate and federal rules, and, on occasions when they attempted to assert regula-tory vigilance, were resisted, delayed, or overturned by the industry’s greater resources and political momentum.38 The “revolving door” be-tween industry and regulators produced what political science describes as agency capture.39 As the Alaska Oil Spill Commission investigations revealed, the Aly-eska Owners’ Committee, led by BP, systematically cut back on critical safety measures.40 The Alyeska Owners’ Committee successfully pres-sured the U.S. Coast Guard to accept a variety of regulatory changes, including: making the Sound’s vehicle separation zone voluntary rather than mandatory;41 loosening agreed-upon requirements for industry-financed, high-resolution radar systems;42 firing the around-the-clock

37 See id. at 34–36. 38 See generally id. at 34–59. At the commencement of the pipeline, the State of Alaska

passed a protective statute establishing stricter standards for tanker safety and pollution avoidance. In response, the industry’s management consortium successfully attacked most of the law on preemption grounds in federal district court. Chevron U.S.A., Inc. v. Hammond, No. A 77-195, 1978 A.M.C. 1697, 1712–14 (D. Alaska June 30, 1978), rev’d, Chevron U.S.A., et al. v. Hammond, 726 F.2d 483 (9th Cir. 1984). The state only appealed some minor provisions of the law, which were deemed unpreempted by the Ninth Circuit. Chevron, 726 F.2d at 501.

39 See Stewart, supra note 9, at 1684–87. 40 See Alaska Comm’n Report, supra note 1, at 7 (“[O]ne basic conclusion of this re-

port is that the grounding at Bligh Reef represents much more than the error of a possibly drunken skipper: It was the result of the gradual degradation of oversight and safety prac-tices that had been intended, 12 years before, to safeguard and backstop the inevitable mistakes of human beings.”).

41 Though depicted as sharp vessel separation corridors on the nautical chart of Prince William Sound, the separation zone is not mandatory. See id. at 8–9. The author was in-formed during Commission investigations that under the 1980 Inland Navigation Rules, the separation zone for Prince William Sound had not been designated as a mandatory lane divider. Under current regulations, vessel separation zones are now generally manda-tory. See 33 C.F.R. § 83.10 (2010).

42 See Alaska Comm’n Report, supra note 1, at 35; supra note 29 and accompanying text. Requirements for higher-quality radar had been reduced at industry’s request to permit the utilization of less expensive radar systems, despite initial assurances that best available radar technology would be installed. Interview with Havelock, supra note 27. “When I was Attorney General [representatives of industry and the U.S. Coast Guard] assured me that BAT for radar would be installed in Prince William Sound. It wasn’t. It was


expert loading crews at the Valdez Marine Terminal to save $10 million a year in costs, thereby forcing ships’ crews to take on the exhausting and delicate job of loading their tankers carefully to avoid structural fail-ure;43 and excusing industry from having to fund a rapid response sta-tion on Hinchinbrook Island—which could have quickly accessed the Exxon Valdez on Bligh Reef and captured virtually all the discharged oil before it got caught up by wind and currents.44 And when the big one occurred, the megasystem’s failure to prepare for a major spill was grimly evident. Similar complacency and inappropriate collusion is increasingly revealed in narrative details from the Gulf of Mexico oil production sys-tem.45 Regulators and those being regulated operated together in sym-biotic relationships reflecting the fact that they considered themselves part of the same unitary community.46 Deepwater drilling at unprece-dented depths was undertaken with casual oversight and lax require-ments for drill plans.47 Categorical exclusions from full environmental reviews were granted for deepwater drilling, and the potential for blow- lousy technology.” Id. (Commission Executive Director Havelock served as Attorney Gen-eral for the State of Alaska from 1970 to 1973).

43 See Plater, supra note 29, at 7. 44 See Alaska Comm’n Report, supra note 1, at 39. Incidents in Prince William Sound

could have been addressed more rapidly and directly if the planned Hinchinbrook Island response station existed:

The need to deploy equipment to a spill from several locations rather than just from the Valdez terminal began to receive consideration in late Decem-ber. Rear Adm. J.B. Hayes, Commander 17th Coast Guard District, provided the sharpest initial focus in a Dec. 28, 1976, letter to A.P. Rollins, Jr., the chief federal pipeline officer. Hayes noted that response times for vessels stationed in Valdez to a spill in Hinchinbrook Entrance had been determined to be seven to eight hours. “It is strongly recommended that Alyeska preposition appropriate response resources in the vicinity of Hinchinbrook Entrance.” Al-though similar recommendations followed and became more specific, Alyeska never responded.

Id. 45 Reports indicate that the MMS officials and industry personnel enjoyed social ex-

cursions together—often in improperly close relationships characterized as “a culture of ethical failure,” “a culture of substance abuse and promiscuity,” and “a pattern of abuses and mismanagement.” Charlie Savage, Sex, Drug Use and Graft Cited in Interior Department, N.Y. Times, Sept. 10, 2008, at A1.

46 See Jason DeParle, Leading the Way Into Deep Water, N.Y. Times, Aug. 8, 2010, at A1. “‘Obviously we’re all oil industry,’ said Larry Williamson, the [MMS] district manager. ‘We’re all from the same part of the country. Almost all our inspectors have worked for oil companies. . . . They grew up in the same towns.’” Id.

47 See Randy Lee Loftis, Risks of Deep-water Drilling get Brush-off, Anchorage Daily News, ( July 15, 2010, 7:51 AM), http://adn.com/2010/07/01/1349546/depper-oil-wells-in-gulf-pose.html.


outs deemed virtually impossible, ignoring data showing that blowout preventers are prone to failure.48 Monitoring and enforcement of regu-lations was haphazard.49 If violations were assessed, they were vigorously contested to burden and deter further enforcement.50 Internally, corporate management decisions can too easily be based on short-term economic gain. Despite high-hazard locations, great technological challenges, and high-risk potentials, operations de-cisions over time are likely to be managed in business terms, dominated by shareholder and managerial expectations of high revenues, rather than public concern for human and ecosystem safety.51 Internal corpo-rate culture is likely to be dominated by whatever the dominant part-ner’s corporate agenda and policies may be. Compounding this struc-ture is a chief shortcoming—industry typically maintains its strict right to hold company information confidential, even where that data is of critical public importance.52

48 See David Barstow et al., Between Blast and Spill, One Last, Flawed Hope, N.Y. Times, June 21, 2010, at A1; DeParle, supra note 46.

49 See, e.g., Alaska Comm’n Report, supra note 1, at 47 (noting that Alyeska’s contin-gency plan met “‘regulation requirements on paper’” but would have failed a “‘reality test’” (citation omitted)); id. at 58–59 (finding that no effective enforcement policy was available beyond shutting down the pipeline).

50 BP’s stance over the years was typified by its contesting safety violations in the Texas City explosions and otherwise. See Press Release, BP, BP Texas City Refinery Formally Con-tests OSHA Citations (Oct. 30, 2010), available at http://www.bp.com/genericarticle. do?categoryId=2012968&contentId=7057595; David Batty, BP to Pay $50m Fine For Safety Violations After Texas City Explosion, Guardian (London), Aug. 12, 2010, http://www.guardian.co.uk/business/2010/aug/12/bp-texas-city-explosion-fine (“BP initially contested pay-ing the entire amount . . . .”); Ben W. Heineman, Jr., Valuing Safety is Good for Companies’ Bottom Line, Atlantic (Apr. 19, 2010, 10:40 AM), http://www.theatlantic.com/business/ archive/2010/04/valuing-safety-is-good-for-companies-bottom-line/39128/ (“In October 2009, the Occupational Safety and Health Administration announced it was levying an $87 mil-lion fine against BP for failing to correct problems which caused the 2005 explosion; BP is contesting those charges.”).

51 See Ravi Somaiya, The Road to Deepwater Horizon: BP’s Oil Spill in the Gulf of Mexico Was a Disaster Three Decades in the Making, Newsweek, July 13, 2010, http://www.newsweek.com/ 2010/07/13/the-road-to-deepwater-horizon.html (discussing the tension between “profits and safety” at BP during the time leading up to the spill). See generally Vsevolod Tatarenkov, Supplement to Research Memo No. 102, at 6–10 (Nov. 19, 2010) (unpublished research memorandum), available at http://www.bc.edu/environmentallaw (follow “Boston College Law School Land & Environmental Law Program Submission to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” hyperlink) (reporting a partial catalog of risk-enhancing operational decisions in the Alaska setting).

52 For example, during the “mad cow” scare involving Creuzfeldt-Jakob disease in beef, government agencies were pressured:

to keep secret the names of the retail outlets selling food subject to recalls. This agreement left consumers essentially in the dark, unable to protect themselves and their families from the possibility of ingesting contaminated


BP may have been particularly prone to cutting corners in its dominance of the Alyeska management company and in the Gulf,53 but the comfortable relationships with the Interior Department’s Minerals Management Service (MMS), and its lax oversight were shared by all the Gulf drilling companies.54 In Louisiana especially, and to a lesser extent in other Gulf States, oil is king and close accommodation with the oil industry at the state as well as federal level was standard operat-ing procedure.55

B. Failures in Response Plans

In the circumstances of their post-calamity responses as well, the two oil disasters, two decades apart, reveal distressingly similar systemic failures in response preparation and implementation. Contingency plans are the heart of response effectiveness, and in both cases the offi-cial contingency plans were largely fiction. The BP Gulf of Mexico plan notoriously included consideration of walruses, not found south of Se-attle,56 minimized the possibility of a blowout, and wildly exaggerated the practicability of discharge capture and cleanup.57 The official

meat. The USDA and DHS actions suggest that protecting the “proprietary information” of the meat industry is of greater importance than protecting public health and the safety of the food supply.

Elisa Obadashian, Senior Policy Analyst, Consumers Union, Testimony Before the Califor-nia Legislature on Mad Cow Disease (Feb. 24, 2004), available at http://www.consumers union.org/pub/core_food_safety/000879.html; see also French et al., supra note 33, at 2–3.

53 See Schwartz, supra note 28. 54 See DeParle, supra note 46. BP was not the only oil company in the Gulf that enjoyed

lax enforcement including blanket categorical exemptions from environmental review. For Gulf of Mexico projects generally, MMS had been granting between 250 and 400 waivers a year. Juliet Eilperin, U.S. Exempted BP’s Gulf of Mexico Drilling From Environmental Impact Study, Wash. Post, May 5, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/ 05/04/AR2010050404118.html. The reported industry-agency improprieties did not single out BP as an exception. See Savage, supra note 45.

55 See DeParle, supra note 46. For example, after Katrina it was apparent that a major contributor to inland flooding and the destruction of buffering coastal marshes was the 9000 miles of oil industry canals cut through coastal marshes to serve drilling operations, but this fact was generally not mentioned. See Houck, Land Loss in Coastal Louisiana, supra note 34, at 26, 75–78; Oliver Houck, Who Will Pay to Fix Louisiana?, Nation, July 12, 2010, at 11 (describing Louisiana’s reliance on the oil and gas industry); MacWilliams-Brooks et al., supra note 35, at 6.

56 Walruses in Louisiana? Eyebrow-Raising Details of BP’s Spill Response Plan, Reuters, May 27, 2010, available at http://blogs.reuters.com/environment/2010/05/27/walruses-in-louisiana-eyebrow-raising-details-of-bps-spill-response-plan/.

57 See Cain Burdeau & Holbrook Mohr, BP Downplayed Possibility of Major Oil Spill, Bos-ton.com, May 1, 2010, available at http://www.boston.com/news/science/articles/2010/ 05/01/bp_downplayed_possibility_of_major_oil_spill/; Holbrook Mohr et al., BP Spill


Alaska plan had failed within forty-eight hours; a generic default Exxon corporate plan had to be brought in.58 Although recommendations were made and we had the opportunity to learn from Alaska, twenty years later the command structure in the Gulf of Mexico was uncertain, with state and federal representatives stepping on one another’s toes and BP not under their command and control.59 The Alaska Commission focused on the need for designing and implementing a decisive and unified incident command, a call that OPA-90’s National Contingency Plan essentially avoided in practice.60 In addition to asserting the need for governmental command authority over industry equipment and personnel, the Commission called for shifting oil spill containment and cleanup responsibilities to the Army Corps of Engineers if the Coast Guard proved incapable of asserting

Response Plans Severely Flawed, MSNBC, June 9, 2010, available at http://www.msnbc.msn. com/id/37599810/ns/disaster_in_the_gulf/ (“There weren’t supposed to be any coastline problems because the site was far offshore. ‘Due to the distance to shore (48 miles) and the response capabilities that would be implemented, no significant adverse impacts are expected,’ the site plan says.”). Attention to preparation for dealing with a large blowout, not to mention a blowout at mile-depths, would seem an obvious concern given the well-known and destructive Ixtoc blowout in the Gulf’s Bay of Campeche in 1979. See Ramon Antonio Vargas, 1979's Ixtoc Oil Well Blowout in Gulf of Mexico Has Startling Parallels to Current Disaster, Times-Picayune ( July 4, 2010, 10:44 AM), http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/07/1979s_ixtoc_oil_well_blowout_i.html.

58Alaska Comm’n Report, supra note 1, at 161, app. N at 1–2 (detailing a timeline of days two and three of the spill).

59 In contingency plans, equipment and funding are the responsibility of the industry rather than the federal taxpayer. See Alaska Comm’n Report, supra note 1, at 156 (“Recom-mendation 38: Government in Charge. The spiller should not be in charge of response to a major spill. A spiller should be obligated to respond with all the resources it can summon, but government should command that response.”); id. at 162 (“Recommendation 48: Inci-dent Command System. “A formal command structure known as the Incident Command System should be used to direct [the industry-provided] response to oil spills.”). The Oil Spill Liability Trust Fund, the primary institutional source of spill response funding, is funded by industry penalties, liability assessments, taxes, and fees. See 26 U.S.C. § 9509(b) (2006). As the Alaska Commission noted, command must be governmental, yet when the U.S. EPA com-mand ordered BP to sharply restrict the use of Corexit dispersants, BP demurred, persuading the Coast Guard to allow continued extensive use. See David A. Fahrenthold & Steven Muf-son, Documents Indicate Heavy Use of Dispersants in Gulf Oil Spill, Wash. Post, Aug. 1, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/07/31/AR2010073102381. html.

60 Alaska Comm’n Report, supra note 1, at 162; see 33 U.S.C. § 1321(d) (2006). Imple-mentation of the National Incident Management System often reflected disorganization and insufficient preparation. See Jim McKay, Gulf of Mexico Oil Spill Prompts Debate on NIMS, Unified Response, Emergency Mgmt. (Sept. 13, 2010), http://www.icyte.com/system/snapshots/fs1/ c/4/b/8/c4b8dd4e4209a32417d138cedf77c01a59fd76c0/index.html?anno_id=327017.


stronger command authority,61 and criticized EPA’s lack of regulatory energy in oil spill prevention and response.62

C. Dangerous Dispersants: Regulators Bowing to Industry

EPA’s continued failure to scrutinize and regulate dispersants has been a critical element in the shortcomings of national spill response.63 Dispersants, in fact, provide one of the most significant examples of dysfunctional contingency response mechanisms in the di-polar man-agement of oil industry risk. Despite warnings from the Alaska Com-mission twenty years previously,64 industry-led contingency planning and government acquiescence resulted in vigorous and indiscriminate use of dispersants in response to oil spills, rather than mechanical sur-face collection technologies—booms and skimmer craft, which are more effective and less destructive to human and ecological health, but more expensive to maintain and operate.65 As the consequences of the BP Deepwater blowout continue to be revealed, the previously unfamiliar word “dispersant” may well achieve the same kind of public-awareness notoriety as the once-unknown “chad.”66 Dispersants were targeted by the Alaska Commission as deeply problematic, but are nonetheless strongly favored by industry for a variety of salient reasons. Dispersants are cheaper in terms of out-of-pocket costs to the spiller than removal actions.67 Perhaps even more compelling, dispersants are “optically” preferable: they play a key role

61 Alaska Comm’n Report, supra note 1, at 156 (Recommendation 39). 62 Id. at 157 (Recommendation 40). 63 Riki Ott, Sound Truth and Corporate Myth$: The Legacy of the Exxon Val-

dez Oil Spill 422–27 (2005). The necessity, and shortcomings, of EPA’s scrutiny of dis-persants are analyzed at length in Dr. Riki Ott’s major compilation of post-Exxon Valdez Oil Spill accounting. See id.

64 See Alaska Comm’n Report, supra note 1, at 198–99. 65 See Vsevolod Tatarenkov, The Marine Spill Response Corporation: A Closer Look,

D.102, at 2–3 (Nov. 5, 2010) (unpublished research memorandum), available at http://www. bc.edu/environmentallaw (follow “Boston College Law School Land & Environmental Law Program Submission to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” hyperlink).

66 See, e.g., Bryan Walsh, Oil Spill: What’s Going on Under the Gulf?, Time (Aug. 2, 2010, 6:55 PM), http://ecocentric.blogs.time.com/2010/08/02/oil-spill-whats-going-on-under-the-gulf/; HBO’s “Recount” Revists the Hanging Chad, NPR (May 25, 2008), http://www.npr.org/tem- plates/story/story.php?storyId=90813445.

67 See Dagmar Schmidt Etkin, Cutter Info. Corp., Estimating Cleanup Costs For Oil Spills 5 (1999), available at http://www.environmental-research.com/publications/pdf/ 1999-IOSC-Cost.pdf.


in the “out-of-sight, out-of-mind” response strategy.68 If oil can be sunk beneath the surface and broken up into billions of small suspended droplets, it becomes invisible, lessens the images of fouled beaches and dying wildlife, and its existence can be doubted and denied.69 By dis-charging a torrent of dispersants a mile below the surface, the objective is to prevent much of the oil from ever reaching visibility at the surface. However, if oil does reach the shore, dispersants can, to some extent, achieve surface cleaning.70 In Alaska, high-pressure spraying of dispers-ants on stony beaches was a major objective for Exxon in creating news video of successful post-spill cleanup.71 But dispersants have serious destructive effects when released into the environment, and not just for wildlife. In Alaska, temporary work-ers hired to spray dispersants on Prince William Sound and on the beaches reported a litany of physical effects from exposure to back-spray.72 “We’re peeing blood,” the author was told, “we can’t let the foremen know or they’ll send us home to Texas, but if it’s doing this to us, what’s it doing to the places we’re spraying?”73 In Alaska today, beaches that had been sprayed with dispersants reportedly demonstrate greater continued ecological damage than beaches that were never “cleaned.”74 Down on the Gulf of Mexico there are not only reports of dolphins dying with bloody hemorrhages around their blowholes and in their internal organs, but dispersant workers have started to pass blood in their urine, as well.75

68 See Rocky Kistner, Dispersant Controversy, Oil Plumes Persist in the Gulf, Switchboard:

Nat. Resources Def. Council Staff Blog (Aug. 20, 2010), http://switchboard.nrdc.org/ blogs/rkistner/down_a_winding_road_that.html.

69 See Matthew Brown, Underwater Oil Plumes Disputed by BP CEO Tony Hayward, Huff-ington Post (May 30, 2010, 8:55 PM), http://www.huffingtonpost.com/2010/05/30/ underwater-oil-plumes-dis_n_595015.html.

70 Int’l Tanker Owners Pollution Fed’n Ltd, Technical Information Paper: The Use of Chemical Dispersants to Treat Oil Spills 5 (2005), available at http://www. itopf.com/_assets/documents/tip4.pdf.

71 Plater, supra note 3, at 11,044. 72 See Ott, supra note 63, at 29, 32–33. 73 Interview with oil clean-up worker in Valdez, Alaska (Aug. 19, 1989). 74 Interview with Riki Ott, toxicologist and author, in La. (Aug. 9, 2010). 75 See Hannah Rogers-Ganter et al., Recommendations for Better Protecting Human

Health in the Wake of Offshore Oil Spills, D.121, at 2 (Nov. 5, 2010) (unpublished research memorandum), available at http://www.bc.edu/environmentallaw (follow “Boston College Law School Land & Environmental Law Program Submission to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” hyperlink); Maryann Tobin, 2010 Oil Spill: Dolphins Suffer Internal Bleeding, Rescued Birds Fly Back to Oil Spill From Tampa, Exam-iner ( June 8, 2010, 12:12 AM), http://www.examiner.com/animal-welfare-in-tampa-bay/ 2010-oil-spill-dolphins-suffer-internal-bleeding-rescued-birds-fly-back-to-oil-spill-from-tampa.


Dispersants in the water column not only kill marine mammals, fish, and other larger life forms, but may have even greater long-term ecosystem effects. The BP Deepwater Horizon blowout occurred at the Gulf of Mexico’s season of maximum larval production for fish, shell-fish, and the myriad smaller life forms that support the fecundity of the Gulf.76 Dispersants make the oil miscible, hanging in subsurface curtain plumes of tiny droplets of heavy oil-cum-dispersant that can directly con-taminate or be consumed by whatever they touch.77 “Clouds of larva, billions, even trillions of them, are drifting in that water column,” a fed-eral biologist told the author.78 “They move up and down according to temperature and light, and when they hit those plumes of suspended subsurface oil, it’s all over for them.”79 The genetic damage to ecosys-tems in Alaska is still tangible. Herring populations and the major Alaska herring fishery have never recovered,80 and Prince William Sound’s primary pod of orca killer whales has not had a successful re-production since the spill.81 If the Alaska Commission’s recommenda-tions had been heeded it is likely that dispersants would play no part, or

76 William R. Freudenburg & Robert Gramling, Blowout in the Gulf: The BP Oil Spill Disaster and the Future of Energy in America 12 (2011).

77 David Biello, Massive Oil Plume Confirmed in Gulf of Mexico, Sci. Am. (Aug. 19, 2010), http://www.scientificamerican.com/article.cfm?id=masive-oil-plume-confirmed-in-gulf-of-mexico.

78 Telephone Interview with federal biologist in Fla. ( June, 2010) (interview was con-fidential).

79 Id. 80 Exxon Valdez Oil Spill Tr. Council, Exxon Valdez Oil Spill Restoration

Plan: 2010 Update—Injured Resources and Services 27–29 (2010), available at http:// www.evostc.state.ak.us/Universal/Documents/Publications/2010IRSUpdate.pdf.

81 Brandon Keim, Unique Killer-Whale Pod Doomed by Exxon Valdez, Wired Sci. (Mar. 24, 2009, 11:45 AM), http://www.wired.com/wiredscience/2009/03/valdezwhales/. In light of the extremely long-term latencies in the aftermath of the Exxon Valdez, and current reports of continuing major die-offs in the Gulf, it is difficult to sustain the contention made by Ken-neth Feinberg, Administrator of the BP Deepwater Horizon Disaster Victim Compensation Fund, and others, that the vast majority of harms from the BP spill will essentially have been realized in one more year’s time, by 2012. See Catherine Clifford, Gulf Oil Spill Victims Offered 3 Years’ Damages, CNNMoney.com (Feb. 2, 2011), http://money.cnn.com/2011/02/02/small business/bp_claims_feinberg_final_payments/index.htm (Feinberg’s facility “predicted that the region will fully recover from the disaster in 2012,” with the possible exception of oyster harvesting, which was granted four years of damages). Cf. Suzanne Goldenburg, Has BP Really Cleaned up the Gulf Oil Spill?, Guardian (London), Apr. 13, 2011, http://www.guardian.co.uk/environment/2011/apr/13/deepwater-horizon-gulf-mexico-oil-spill (“In the past year, [marine scientist Samantha] Joye—as well as other independent scientists—has repeat-edly challenged the official version of the oil disaster put forward by the White House and other administration officials. . . . In December, Joye’s team knocked down another White House claim—that the vast majority of the oil was gone—when she discovered a thick coating of oil, dead starfish and other organisms on the bottom of the ocean, over an area of 2,900 square miles.”)


a significantly reduced role, in spill response. Instead, spill response would focus on adoption of advanced skimmer oil capture technology,82 nontoxic coagulants that can operate in the subsurface water column as well as on the surface,83 high-volume separation and retrieval systems,84 and even short-term combustion approaches,85 in addition to greatly enhanced prevention.86 But it was not to be. Today, as EPA has quite belatedly hastened to test an array of dis-persants, the Agency’s tentative conclusions about dispersant toxicity are cast into grave doubt by the Alaska experience. Tested dispersants appear in most cases to have been subjected only to short-term, high-dose acute toxicity tests of the dispersant alone, rather than completing the normal range of tests for toxicity, capabilities, and efficacy,87 with inconsistency in testing the dispersant and oil mixture—the form in which the substances occur in impacted waters.88

82 See Alaska Comm’n Report, supra note 1, at 105–06. Some scientists have argued that it is preferable and less damaging to keep the oil on the surface. If oil stays on the surface rather than mixing deep in the water column it is retrievable by the kind of effec-tive surface technology currently used in Europe; if submerged by dispersants then the oil cannot be retrieved. Telephone Interview with Jeffrey Admon, NOLA Steel, Inc. (Nov. 10, 2010) (discussing Dutch North Sea skimmer boom arm technology in North Sea opera-tions); see also Eli Kintisch, Gulf Oil Spill: An Audacious Decision in Crisis Gets Cautious Praise, Science, Aug. 13, 2010, at 735, 736 (“NOAA Administrator Jane Lubchenco says one of the worst case scenarios involving longer exposures due to dispersed oil—big losses of spawning bluefin tuna populations—may not be detectable for years. That’s led some sci-entists to suggest that letting the oil rise to the surface would have been a better move, as it could be more easily collected.”).

83 See Alaska Comm’n Report, supra note 1, at 107. 84 See id. at 105–06, 197. 85 See id. at 125. 86 See id. at 127. 87 See Juliet Eilperin, Oil Dispersant Does Not Pose Environmental Threat, Early EPA Findings

Suggest, Wash. Post, June 30, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/06/30/AR2010063004358.html. HPV Chemical Hazard Data Availability Study, Envtl. Prot. Agency, http://www.epa.gov/hpv/pubs/general/hazchem.htm (last updated Aug. 2, 2010) (“There are six basic tests which have been internationally agreed to for screening high production volume (HPV) chemicals for toxicity. The tests agreed to under the Organi-zation for Economic Cooperation and Development’s Screening Information Data Set (OECD/SIDS) program are: acute toxicity; chronic toxicity; developmental/reproductive toxicity; mutagenicity; ecotoxicity and environmental fate.”). Testing that uses only acute toxicity parameters does not give reliable data on real world toxicity. Interview with Riki Ott, supra note 74.

88 Studies have demonstrated that the mixture of crude oil and dispersant is more toxic than either the dispersant or crude oil by themselves. See Robert A. Perkins et al., Comparative Marine Toxicity Testing: A Cold-Water Species and Standard Warm-Water Test Species Exposed to Crude Oil and Dispersant, 42 Cold Regions Sci. & Tech. 226, 227 (2005). Even low-dose exposures to chemicals can be very dangerous. See generally Nicholas A. Ashford & Claudia S. Miller, Chemical Exposures: Low Levels and High Stakes 3–10 (2d ed.


A number of oil industry contingency response functions in the Gulf of Mexico, as in Alaska, are consigned under official contingency response plans to industry-created service organizations.89 In the Gulf of Mexico, primary dependence is placed upon industry-created pooled response management corporations—the Marine Preservation Associa-tion (MPA) and the Marine Spill Response Corporation (MSRC)—and these entities tend to adopt procedures and technology that serve indus-try agendas rather than public interests.90 The delegation of official functions to private entities creates inherent tensions—between serving the avowed civic public goals of maximizing safety and effective inci-dent response on one hand, and the pressing business agendas of the industry partners on the other. Financial interest, media-management interests, and market ratings measured in quarterly performances all militate in favor of narrowed goals and strategies, for example, the con-tinuing use of dispersants.91 This problematic internal culture figured heavily in the Alaska Commission’s conclusions and recommendations and is directly and problematically presented in Gulf of Mexico opera-tions, and in contingency response planning with industry-constituted risk and response management corporations. In both Gulf megasystems, industry pressure and agency lassitude combined to lessen operational vigilance and risk-preventing design, and to undercut the preparation and implementation of effective re-sponses when disaster struck.

III. RCACs: An Innovative Expansion Beyond the Traditional Di-Polar Model, and Challenges Encountered

Of the fifty-nine commission recommendations in the wake of the Exxon Valdez, heavy industry lobbying during passage of OPA-90

1998), available at http://drclaudiamiller.com/Articles/Chemical_Exposures_Low_Levels_ and_High_Stakes_2nd_Ed.pdf. Additionally, for clean-up workers from the Exxon Valdez oil spill, “[m]oderate chemical exposure was also associated with a greater reported preva-lence of chronic airway disease and symptoms of multiple chemical sensitivity.” Annie K. O’Neill, Self-Reported Exposures and Health Status Among Workers from the Exxon Val-dez Oil Spill Cleanup, at iv (2003) (unpublished MPH thesis, Yale University), available at http://rikiott.com/pdf/oneill_thesis.pdf.

89 See, e.g., Home, Marine Spill Response Corp., http://www.msrc.org (last visited Apr. 15, 2011); Why MPA, Marine Preservation Ass’n, http://www.mpaz.org (last visited Apr. 15, 2011). In both areas, the primary funders and providers of response equipment and opera-tions are often industry entities. See Tatarenkov, supra note 65, at 1.

90 See id. at 2; Becoming a Customer, Marine Spill Response Corp., http://www.msrc.org/ Membership.htm (last visited Apr. 15, 2011).

91 See Tatarenkov, supra note 65, at 3–4.


blocked or diluted many of these recommendations.92 The emerging story of Gulf of Mexico deepwater drilling frustratingly reflects how beneficial it might have been if those Alaskan recommendations had been implemented nationally in the wake of the Exxon Valdez. Beyond its recommendations for comprehensive prevention policy and operational safety commitments,93 the Alaska Oil Spill Commission urged that government and corporate performance standards should specifically require BAT—best available technology, a fundamentally rational suggestion that could have made a significant difference in the Gulf of Mexico.94 The Alaska Commission also recommended that en-hanced state and local regulatory involvement be encouraged rather than preempted.95 Recommendations at the federal level included calls for mandatory corporate safety reporting, minmum personnel levels, revised insurance antitrust exemptions, and an intensified vigilance role for the Coast Guard.96 In addition to seeking “regulatory vigilance in government agen-cies” and “corporate attitudes that put safety first,” a prime innovation of the Alaska Commission, only partially integrated into OPA-90, was the proposed creation of institutionalized citizen watchdog councils— RCACs.97 These councils, made up of citizens representing interests that would be grievously harmed if risk-prevention and incident response measures fail, aim to break up tendencies toward complacency, collu-sion, and neglect within the industry-agency management model that characterizes the field.98 Integrated into several Commission recom-mendations,99 this structural reform innovation in effect pluralized the

92 See generally Oil Pollution Act of 1990, Pub. L. No. 101-380, 104 Stat. 484 (codified at 33 U.S.C. §§ 2701–3207 (2006).

93 See Alaska Comm’n Report, supra note 1, at 129–32. 94 See id. at 135 (Recommendation 7). 95 See id. at 137–39 (Recommendation 11). An expressed congressional intent not to

preempt state and local regulatory action would avoid the industry arguments that under-cut Alaska’s protective regulations in Chevron U.S.A., Inc. v. Hammond. See No. A 77-195, 1978 A.M.C. 1697, 1712–14 (D. Alaska June 30, 1978), rev’d, Chevron U.S.A., et al. v. Hammond, 726 F.2d 483, 501 (9th Cir. 1984). The Commission also noted the particular utility of interstate compacts. Alaska Comm’n Report, supra note 1, at 142 (Recommen-dation 18).

96 Alaska Comm’n Report, supra note 1, at 149–51 (Recommendations 31–33). 97 See id. at 139–40, 186. 98 Id. at app. M, at 6–9. In framing its citizen council recommendations, the Commis-

sion was building upon the suggestions of Rick Steiner, former Professor at the University of Alaska, Anchorage. Plater, supra note 3, at 11,046.

99 Alaska Comm’n Report, supra note 1, at 131 (”Recommendation 3: Citizen knowledge of risk. Because many individuals and communities are placed at risk by modern oil transporta-tion systems, citizens should be involved in oversight arrangements at every level of govern-


di-polar governance model. Citizen councils would strategically institu-tionalize a functional, informed viewpoint on operations and risk from the external perspective of potentially impacted members of the public. RCACs—authorized in OPA-90100 but limited to Alaska waters by Capitol lobbying101—have become a significant but largely unheralded product of the Exxon Valdez disaster. The RCAC model could well be integrated into a post-Deepwater Horizon management system for the Gulf and other oil production areas. Currently there are two RCACs in existence in the United States, both of which are independent but industry-funded: the Prince William Sound RCAC (PWS-RCAC) and the Cook Inlet RCAC (CI-RCAC).102 For over twenty years, both the PWS-RCAC and the CI-RCAC have ad-dressed environmental protection and oil spill preparation within their respective communities with little recognition from the outside world103 and varying degrees of success.104 OPA-90 stipulates that industry funding for the Alaska RCACs is a basic requirement for the validity of contingency plans in the waters they serve.105 The PWS-RCAC is funded on an annual basis by the own-ers or operators of terminal facilities and tankers operating in Prince William Sound at a price-adjusted budget of up to $2 million.106 The CI-RCAC receives funding up to $1 million.107

ment.”); id. at 139 (“Recommendation 12: Oversight council. A citizens advisory council should be established in the Office of the Governor and given responsibility for overseeing the safe transportation of oil, gas and other hazardous substances.”); id. at 146 (“Recommendation 26: Regional advisory committees. A system of regional advisory councils should be formalized under state authority to oversee harbor administration, state and federal regulation and private safety functions.”); id. at 163 (“Recommendation 49: Enlarged community role. A substantive role should be given to the affected communities in any response system.”).

100 33 U.S.C. § 2732(d) (2006). 101 Id. § 2732(b), (d) (authorizing the creation of two RCACs only in Alaska). It is of

course difficult to pin down the intrigues of Capitol lobbying, but Alaska Commission Ex-ecutive Director Havelock, who went to Washington while OPA-90 was being debated in Congress, said that given the lobbying that accompanied the legislation, it is reasonable to assume that it was the lobbying that resulted in RCACs not being extended to regions be-yond Alaska. Interview with John E. Havelock, supra note 27.

102 See Horton, supra note 17, at 2. 103 A study by George Busenberg appears to be the only serious analysis of the RCAC

form. See generally George Busenberg, Citizen Advisory Councils and Environmental Man-agement in the Marine Oil Trade (1997) (unpublished technical report based on Ph.D. dissertation, University of North Carolina at Chapel Hill), available at http://www.circac. org/documents/pdf/emc/CACEnvironMg.pdf.

104 See id. at 65 (identifying factors which affect the success of RCACs). 105 33 U.S.C. § 2732(k)(1). 106 Id. § 2732(k)(2). A provision in subsection (o)(1) permitted oil companies to sat-

isfy the requirements of the Act if they entered contracts that met specific funding and


A. RCAC Achievements

Over the past twenty years, each RCAC has achieved significant ac-complishments in improving oil spill prevention and limiting the envi-ronmental impact of the oil industry within the region. Their achieve-ments include: PWS-RCAC research and public advocacy resulting in tanker escort tug requirements to enhance safe transit through the Sound’s narrow passages;108 research, advocacy, and funding for radar system enhancement to detect icebergs within the Sound;109 research and advocacy leading to the installation of vapor controls to reduce air pollution hazards at tanker loading wharves;110 co-development of 148 geographic response strategies (GRSs) for protection plans for envi-ronmentally sensitive areas in Prince William Sound and Kodiak;111 re-search and advocacy to understand and minimize the threat of non-indigenous marine organisms reaching Prince William Sound in oil tanker ballast water;112 and general monitoring of terminal operations and contingency planning.113 Officers and members of the RCAC have a regular presence in discussions with industry and agency officials.114 In addition, the PWS-RCAC has, on a number of occasions, served as the confidential broker of whistleblowers’ factual tips from within the indus-try and government agencies.115 CI-RCAC has helped to shape forty-three GRSs tailored to protect specific sensitive areas within Cook Inlet and Kodiak Island from impacts following a spill, and created a photo-

duration requirements with alternative advisory groups certified by the President to foster the general goals and purposes of the Act and to serve the communities and interest groups in the vicinity of the oil terminals. Id. § 2732(o)(1). The PWS-RCAC serving today is of that alternative advisory group form. Id.

107 Id. § 2732(k)(3). 108 Prince William Sound Reg’l Citizens’ Advisory Council, What We’ve Ac-

complished 10 (2004), available at http://www.pwsrcac.org/docs/d0013400.pdf. 109 Press Release, Prince William Sound Reg’l Citizens’ Advisory Council, Prince Wil-

liam Sound Iceberg Radar Project Comes Online (Dec. 20, 2002), available at http://www. pwsrcac.org/newsroom/021220.html.

110 Prince William Sound Reg’l Citizens’ Advisory Council, supra note 108, at 11. 111 Joe Banta, 5 Questions About Oil Spills, Sea Briefs, Summer 2010, at 2, available at

http://www.masgc.org/pdf/masgp/10-012-02.pdf. 112 Prince William Sound Reg’l Citizens’ Advisory Council, supra note 108, at 12. 113 Prince William Sound Reg’l Citizens’ Advisory Council, PWS-RCAC Bro-

chure 6 (2004), available at http://www.pwsrcac.org/docs/d0013400.pdf. 114 Banta, supra note 111, at 2. 115 “We get a lot of information from people, it’s given to our staff, and we pass it on,

but we don’t give out the names.” Telephone Interview with Walter Parker, Board Presi-dent, PWS-RCAC (Feb. 20, 2011).


graphic baseline of the Cook Inlet coast at low tide as, among other functions, a potential aid to oil spill first responders.116 The Obama Administration, the Gulf Commission, and coastal communities in the Gulf area have recognized and discussed the poten-tial utility of an RCAC structure for the Gulf region.117 Based on the National Commission’s recommendations, it is possible that upcoming amendments to OPA-90 will include a broadened authorization for RCACs on the Gulf and other national coastlines subject to drilling.118 Had there been a Gulf RCAC, with representatives from inshore and offshore commercial fisheries, sport fishing, tourism, and recrea-tion sectors, it is unlikely that the recent rarefied technology of deepwa-ter drilling would have been issued a permit without an environmental review, acknowledgment of the potential for spills reaching beaches and shores, a practicable contingency plan, basic geological data from BP, or even consideration of the possibility of a blowout. Institutional-ized representation of at-risk citizen interests and communities creates a dramatic change in the “low level of vigilance and a discomforting level of comfort between the industry and . . . regulators.”119

B. Challenges Posed by the RCAC Format

The Alaska experience, however, has demonstrated some intrinsic challenges to effective representation of societal interests external to di-polar industry-agency governance. First is the lack of subpoena

116 Horton, supra note 17, at 3; see Coastal Habitat Mapping, Cook Inlet Reg'l Citizens’

Advisory Council, http://www.circac.org/joomla/index.php?option=com_content& view= category&layout=blog&id=18&Itemid=33 (last visited Apr. 15, 2011).

117 See BP Commission Report, supra note 3, at 212, 268, 281; Banta, supra note 111, at 2–3; Bill Capo, Gulf Coast Residents Learn the Lessons from Exxon Valdez, WWLTV.com (Aug. 10, 2010, 5:32 PM), http://www.wwltv.com/video/featured-videos/Gulf-Coast-residents-learn-the-lessons-from-Exxon-Valdez-100078984.html; Rhonda McBride, Prince William Sound Coun-cil May be First of Many, KTUU.com ( Jan. 20, 2011, 7:24 PM), http://www.ktuu.com/ news/ktuu-prince-william-sound-citizens-01202011,0,5301633.story.

118 See BP Commission Report, supra note 3, at 212 (“Local citizen support is impor-tant. . . . Any structure should therefore include a citizens’ advisory council to provide formal advice and a direct line to citizens’ concerns.”); see also id. at 268–69 (“In the Gulf, such a council should broadly represent the citizens’ interests in the area, such as fishing and tourism, and possibly include representation from oil and gas workers as ex-officio, non-voting members. The citizens’ group could be funded by Gulf lease holders. The Commission further recommends that federal regulators be required to consult with the council on relevant issues, that operators provide the council with access to records and other information . . . .”). In its report to the President, the National Commission makes numerous such recommendations that would require Congress to supply further authority and funding under the OPA-90 framework. See id. at 184–85.

119 Alaska Comm’n Report, supra note 1, at 186; see Horton, supra note 17, at 1.


power.120 Lobbyists in Congress successfully blocked subpoena authority for the RCACs in OPA-90, just as they blocked the grant of subpoena power for the current National Commission.121 Funding issues arise an-nually for CI-RCAC, which has to negotiate with the industry combine to justify its budget each year.122 For a structural entity created to scruti-nize industry and agency practices from an external public perspective, it is anomalous to require the scrutinizer to negotiate budget item ap-proval from those being scrutinized. Further, there has been strong evidence of RCAC co-optation in

the case of CI-RCAC.123 The PWS-RCAC, on the other hand, is almost entirely composed of citizen representatives who are inclined to ex-treme caution about risk.124 Prince William Sound citizens and local communities are not deeply tied to the oil industry as many in the Cook Inlet area are, but rather to fishing and natural resources— liveli-hoods which are directly threatened by oil spills.125 In Cook Inlet, how-ever, the coastal communities are much more heavily dependent on oil payrolls,126 and oil-industry-dependent community officials sitting on that RCAC have consistently blunted the inquiries and risk-monitoring functions of the Council.127 De facto co-optation of council members can eliminate the independent perspective and therapeutic value of a citizen watchdog council, and collapse the external eye of the innova-tive citizen council model back into the old di-polar establishment. The politics of the CI-RCAC municipalities is strongly influenced by short

120 See Plater, supra note 3, at 11,046. 121 See id.; John M. Broder, Investigator Finds No Evidence That BP Took Shortcuts to Save

Money, N.Y. Times, Nov. 9, 2010, at A16; Siobhan Hughes & Ryan Dezember, Oil-Spill Panel Pushes for Subpoena Power, Wall St. J., Sept. 29, 2010, at A8.

122 See Naomi Klouda, CIRCAC Removes Shavelson, Homer Trib., Sept. 8, 2010, http:// homertribune.com/2010/09/circac-removes-shavelson/.

123 See id. 124 See Horton, supra note 17, at 4. 125 See Valdez Impacts, Alaska Oil & Gas Ass’n, http://www.aoga.org/facts-and-figures/

valdez/ (last visited Apr. 15, 2011) (showing that in 2007 the largest employer and largest industry within the Valdez Cordova Borough region was the fishing industry, accounting for significantly more direct jobs than the regional oil industry, and that the oil and gas industry contributed only $53.4 million in payroll to the local residents, including all related busi-nesses).

126 See Kenai Impacts, Alaska Oil & Gas Ass’n, http://www.aoga.org/facts-and-figures/ kenai/ (last visited Apr. 15, 2011) (showing that in 2007 gas and oil production within Kenai Peninsula Borough, where Cook Inlet is located, accounted for 4603 oil and gas related jobs within the region, and $262.3 million in payroll to local residents—revealing that the largest employer in the region is the state government).

127 See Klouda, supra note 122; Frank Mullen, Editorial, CIRCAC’s Time Has Passed, Homer Trib. (Sept. 22, 2010), http://homertribune.com/2010/09/circac%E2%80%99s- time-has-passed/; Horton, supra note 17, at 4.


term maximization of oil industry economic benefits, and tends to de-fer to the authority of corporate managers.128 If there is a realistic risk that citizens’ watchdog councils will be co-

pte

g the presence of independent at-risk citizen moni-rs,

Conclusion

In the aftermath of the Gulf of Mexico BP Deepwater Horizon blowout spill, the American governance system has the opportunity to

o d or suborned by pressures from the predominating industry or agency establishments that the councils are designed to monitor and counter-balance, the RCAC structure can be neutered. If industry or agency whistleblowers who need confidentiality in passing publicly sig-nificant information to an RCAC know that the council has member-ship allied to their employers, the information-brokering role of the RCAC is nullified. The composition of RCACs thus must be constituted to assure their independence and critical external public perspective, leading to suggestions that citizen membership cannot be aligned with the di-polar establishments that the council entity is designed to counter-balance.129 Institutionalizinto funded by the implicated industries, fundamentally changes the centripetal tendency of di-polar industry-agency structures, opening them to transparency, increased compliance, and care-enhancing pub-lic awareness. Adding this third leg to the di-polar default format for governance shifts the governmental geometry toward a Jeffersonian multicentric pluralism, where affected interests that were previously marginalized now are able to be actively involved in the governance process.130 The new triangulation created by RCACs and other third-party empowerments can help avoid losing public and individual values in the tangles of the traditionally insulated di-polar political-economic marketplace.

128 See Klouda, supra note 122; Mullen, supra note 127. 129 See Horton, supra note 17, at 1. This memorandum suggested that, as in various pol-

lution regulatory boards, membership can exclude direct and indirect representatives of the regulated entities. Id. at 5. Precedent for this proposition comes from the federal pol-lution statutes and cases like Bayside Timber Co. v. Board of Supervisors of San Mateo County. 97 Cal. Rptr. 431, 439 (Ct. App. 1971) (“‘It is an age-old principle of our law that no man should judge or otherwise officially preside over disputed matters in which he has a pecu-niary interest. The rule is given expression in the law of trusts. It is against public policy to permit any person occupying fiduciary relations to be placed in such a position that he may be tempted to betray his duty as a trustee.’” (quoting Sims v. Petaluma Gaslight Co., 63 P. 1011, 1012 (Cal. 1901))).

130 See Horton, supra note 17, at 1.


harvest conclusions about hy did this calamity hap-n?

causation— “wpe ” —and about necessary fundamental changes in how we manage the extraction and transport of oil in the future. Poised against this cor-rective agenda is the natural tendency of the industry, and the commu-nities that depend economically upon it, to avert systemic changes that will potentially constrain on-going economic patterns. Vivid disasters create practical possibilities for systemic improve-ment, but only if systemic flaws are publicly perceived and systemic les-sons learned. The Exxon Valdez oil spill in 1989, and the State of

laskA a Oil Spill Commission Report of 1990, distilled some highly sig-nificant perceptions and recommendations for systemic improve-ments,131 but many did not translate into the federal OPA-90 legislation passed in response to the public dismay at the Alaska calamity. 132 Those that were included tended to become suborned by the culture of complacency, collusion, and neglect that the Alaska Commission had identified as the precondition and cause of that disaster.133 The Gulf of Mexico trauma presents yet another opportunity to learn from disaster. The on-going work of the National Commission shows hopeful signs of not squandering the learning-teaching mo-

en 134m t. And if there is to be a fundamental change in the current megasystem with its systemic deficiencies, it makes good sense to have the megasystem of the future include the structural innovation of an active citizen participant counterweight within the governance struc-ture itself, to serve the public interest better this time around as we await an ultimately necessary shift away from fossil fuels.

131 See Alaska Comm’n Report, supra note 1, at 129–69. 132 See Plater, supra note 3, at 11,407. 133 See id. 134 See generally BP Commission Report, supra note 3, at 1–86 (analyzing the systemic

failures which contributed to the disaster in the Gulf).

LESSONS FROM THE NORTH SEA: SHOULD “SAFETY CASES” COME TO AMERICA?

Rena Steinzor*

Abstract: The catastrophic oil spill in the Gulf of Mexico last spring and summer has triggered an intense search for more effective regulatory methods that would prevent such disasters. The new Bureau of Ocean En-ergy Management, Regulation and Enforcement is under pressure to adopt the British safety case system, which requires the preparation of a fa-cility-specific safety plan that is typically several hundred pages long. This system is supposed to inculcate a “safety culture” within companies that operate offshore in the British portion of the North Sea, because it over-comes a “box-ticking” mentality and constitutes “bottom up” implementa-tion of safety measures. Safety cases are strictly confidential; only company officials, regulators, and, in limited circumstances, worker representatives, are allowed to see the entire plan. This Article argues that the safety case approach should not come to America because this confidentiality, as well as the levels of risk tolerated by the British system, conflict with the both the spirit and the letter of American law. American regulators also lack the resources necessary to make a safety case regime minimally successful.

Introduction: The Search for New Regulatory Approaches

In the aftermath of the catastrophic oil spill at BP’s Deepwater Ho-rizon facility in the Gulf of Mexico, American officials have launched a frantic search for more effective regulatory methods that would prevent such disasters. The European Union has also gotten into the act, threat-ening to write its own set of prescriptive regulations for facilities located

* © 2011, Rena Steinzor, Professor of Law at the University of Maryland School of Law. The author also serves as the President of the Center for Progressive Reform (CPR) and was a co-author, along with symposium participants Alyson Flournoy, Holly Doremus, and several other CPR member scholars, of its publication Regulatory Blowout: How Regulatory Failures Made the BP Disaster Possible, and How the System Can Be Fixed to Avoid a Recurrence. Alyson Flournoy et al., Ctr. for Progressive Reform, White Paper No. 1007, Regulatory Blowout: How Regulatory Failures Made the BP Disaster Possible, and How the System Can be Fixed to Avoid a Recurrence 1–3, 13 (2010), available at http://www.progressivereform.org/articles/BP_Reg_Blowout_1007.pdf. The author is additionally grateful for the invaluable editorial assistance of Alice Johnson, research fellow at the Thurgood Mar-shall Law Library; the research assistance of Andrew Goldman and Summer Hughes Niazy; and the wise advice of Holly Doremus, Thomas McGarity, Rory O’Neill, Robert Percival, and Matthew Shudtz.

417


in the North Sea.1 The special commission appointed by President Obama to investigate the Gulf spill recommended that American regu-lators take a close look at the British system, which relies on one core mandate: every offshore operator shall prepare and update at five-year intervals a “safety case” tailored to the risks posed by individual facili-ties.2 As explained by John Paterson and Greg Gordon, prominent Scot-tish legal experts on oil and gas regulation in the North Sea, the British system developed in the wake of catastrophes offshore, beginning with the collapse of the Sea Gem platform in 1965, killing thirteen workers, and culminating in the worst offshore accident in history—the 1988 ex-plosions aboard the Piper Alpha platform that claimed 167 lives.3 The system traveled an arduous trajectory from the “Early Phase” of a primi-tive licensing regime where the authority responsible for promoting de-

1 See Press Release, Günther Oettinger, European Union Comm’r for Energy, Offshore

Drilling: European Comm’n Envisages EU Safety Rules (Oct. 13, 2010), available at http:// europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1324; Malcolm Webb, Chief Executive of Oil & Gas UK stated that, “‘Oil & Gas UK is extremely concerned that once again, the EU Commission is calling for a suspension of new licensing . . . . It is also deeply worrying that in addition, it now proposes to implement centralized and prescriptive safety regulation.’” Press Release, Oil & Gas UK, European Commission’s Call for Suspension of Licensing in UK Wholly Unjustified (Oct. 13, 2010), available at http://www.oilandgas uk.co.uk/news/news.cfm/newsid/551. Oil & Gas UK is the leading trade association that claims to represent the entire offshore sector. See About Us, Oil & Gas UK, http://www. oilandgasuk.co.uk/aboutus/aboutus.cfm (last visited Apr. 15, 2011).

2 See Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling 252 (2011) [hereinafter BP Commission Report] (“The Department of the Interior should develop a proactive, risk-based performance approach specific to individual facilities, operations and environments, similar to the “safety case” approach in the North Sea.”); see also Letter from Deepwater Horizon Study Grp. to Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling (Nov. 24, 2010), available at http://www.oilspillcommission.gov/sites/default/files/documents/DHSG%20letter%2011%2024%2010.pdf; J. Robinson West, President & CEO of PFC Energy, Written Statement on History and Expansion of Offshore Drilling to the Nat’l Comm’n on the BP Deepwater Horizon Oil Spill & Offshore Drilling, Meeting 2 (Aug. 25, 2010), available at http://www.oilspillcommission.gov/sites/default/files/documents/ Robinson%20West%20 Written%20Statement.pdf; see also H.R. 3534, 111th Cong. § 211 (2010) (a bill introduced by Rep. Nick Rahall (D-WV) and passed by the House, requiring that a “safety case” be prepared in conjunction with each new application for a drilling lease in the Outer Continental Shelf); The Great Debate: A Safety Case Regime for U.S. Offshore Drilling and Production?, SPE Int’l, http://www.spegcs.org/en/cev/1795 (last visited Apr. 15, 2011) [hereinafter Great Debate Conference] (a website with materials from a conference sponsored by the Society of Petroleum Engineers, held in Houston, Texas on Sept. 16, 2010).

3 See Oil and Gas Law—Current Practice and Emerging Trends 116 (Greg Gor-don & John Paterson eds., 2007) [hereinafter Oil and Gas Law]; see also John Paterson, The Significance of Regulatory Orientation in Occupational Health and Safety Offshore, 38 B.C. Envtl. Aff. L. Rev. 367, 369–79 (2011).

2011] Safety Cases: Lessons from the North Sea? 419

velopment was also expected to ensure safety; to a “Middle Phase” that Professor Paterson characterizes as an unsuccessful, short-lived experi-ment with traditional, prescriptive regulation; to the “Late Phase” in which “duty holders” were told to craft and implement their own de-tailed plans for avoiding catastrophe.4 The British call this approach “goal-oriented” regulation5 that is implemented through a “permission-ing” system,6 although in American lexicon it would be described as a hybrid mix of “performance-based” regulation and voluntary self-regulation. This shift of emphasis from prescriptive regulatory require-ments to duty holder hegemony and relative autonomy was quite delib-erate; the trade-off for the offshore industry was considerable flexibility in formulating the details of its compliance obligations. Safety cases are defined as a “‘structured argument, supported by a body of evidence that provides a compelling, comprehensible and valid case that a system is safe for a given application in a given operating environment.’”7 They are prepared either by consultants or company employees in accordance with an elaborate set of guidelines mandating that each document address in detail such disparate topics as: (1) pro-cedures for controlling risks; (2) the selection and training of key per-sonnel; (3) installation of preventive technologies such as emergency cut-off equipment; (4) procedures to control higher-risk events such as change of shifts, design, or production goals; (5) the operating firm’s control over the activities of subcontractors; and (6) how the entire crew of a given facility should respond in an emergency.8 Safety cases are expected to reduce safety risks to a level “as low as reasonably practical” (ALARP).9 Until 2003, guidance from the super-

4 See Oil and Gas Law, supra note 3, at 116. Duty holders are the designated corpo-

rate entity that is responsible for the operation of offshore facilities. See id. 5 Id. at 132–44 (describing the rise of goal-oriented regulation in the aftermath of Pip-

er Alpha). 6 Health & Safety Exec., Policy Statement: Our Approach to Permissioning

Regimes 2–3 (2003), available at http://www.hse.gov.uk/enforce/permissioning.pdf. “Per-missioning” is the term used by the British Health and Safety Executive to describe the approach it uses for all high-hazard industries. See id. Companies cannot operate hazard-ous industries without receiving government permission, but remain responsible for de-veloping facility-specific safety cases that govern both conduct and equipment. See id.

7 J.R. Inge, Ministry of Defence, The Safety Case, Its Development and Use in the United Kingdom 2 (2007) (citation omitted), available at http://safety.inge.org.uk/ 20070625-Inge2007_The_Safety_Case-U.pdf.

8 See generally Health & Safety Exec., Assessment Principles for Offshore Safety Cases (APOSC) (2006) [hereinafter APOSC Regulations], available at http://www.hse.gov. uk/offshore/aposc190306.pdf.

9 ALARP at a Glance, Health & Safety Executive, http://www.hse.gov.uk/risk/theory/ alarpglance.htm (last visited Apr. 15, 2011).


vising agency, the British Health and Safety Executive (HSE), translated this verbal formulation into two sets of numbers: (1) “an individual risk of death of 10¯³ [one in 1000] per year”;10 and (2) an “implied cost of averting a statistical fatality (ICAF)” generally measured as six times the value of each life saved, with a life worth £1 million (about $1.63 mil-lion in April 2011).11 The revisions made in 2005 allowed the use of qualitative as well as quantitative risk analysis without changing the ALARP standard. However, no publicly available evidence indicates that this modification enhanced the protectiveness of such requirements.12 A final feature of overriding importance in the British system is that all safety cases are held in the strictest confidence.13 No one except the consultants, top level management, the assigned agency official, and— in limited circumstances—a worker representative is allowed to see the finished document in its entirety. I have no doubt that the British regulatory system has much to teach American regulators. The awkward fact remains that BP has his-torically been one of the biggest operators of deep wells in the North Sea14 and is a veteran of that system. If safety cases truly inspire a perva-sive safety culture that is based on a deeply ingrained corporate recog-nition of the high costs of neglecting such procedures, how could this

10 APOSC Regulations, supra note 8, ¶ 39 (defining risk level of one in 1000 lives). 11 Id. ¶¶ 58–59. 12 Health & Safety Exec., A Guide to the Offshore Installations (Safety Case)

Regulations 2005, at 13 (3d ed. 2006) [hereinafter Guide to Offshore Installations], available at http://www.hseni.gov.uk/l30_a_guide_to_the_offshore_installations_safety_case_ regulations_2005.pdf. The Guide states, in a circular fashion, inter alia, that safety cases must demonstrate that “major hazard risks” are “identified and evaluated” and that “in respect to these risks, the ‘relevant statutory provisions’ will be complied with.” Id. In a letter critiquing an early version of this Article posted on the Social Science Research Net-work (SSRN), Steve Walker, Head of the HSE Offshore Division, states that the 2005 deci-sion to allow qualitative as well as quantitative analysis was significant, but he does not ex-plain whether this modification has produced more rigorous safety requirements in the North Sea. Letter from Steve Walker, head, of HSE Offshore Div., to Rena Steinzor (Feb. 25, 2011) (copy on file with author) [hereinafter Walker Letter].

13 Mr. Walker’s letter does not dispute that safety cases are unavailable to the public, but does emphasize that “the installation operator or owner must genuinely attempt to seek the views and contributions of the workforce representatives.” Walker Letter, supra note 12, at 3.

14 See Rowena Mason, Oil Spill: BP Reassures over Russian, North Sea Assets, Telegraph (London), June 23, 2010, at 11 (reporting on BP’s promises not to withdraw its major in-vestments in the North Sea); Rowena Mason, BP: A Beginners Guide to the Company, Tele-graph (London) ( June 22, 2010, 5:29 PM), http://tgr.ph/9GDMHG (reporting that: (1) until the Deepwater disaster, BP obtained eight percent of its oil from the North Sea; and (2) BP was Britain’s biggest company and the second largest oil company in the world, but as of June 2010, it slipped to the sixth largest oil company worldwide).


quintessentially British company have failed so abjectly to internalize these practices when it expanded its operations to the Gulf of Mexico? Remarkably insightful investigative journalism motivated by the Gulf spill, as well as independent reports on BP’s management style on-shore, suggest that BP London headquarters maintained iron-clad con-trol over its worldwide operations, imposing a rigorous cost-cutting re-gime that very likely contributed to the Gulf catastrophe.15 In this context, it is fair to ask whether BP’s problems indicate that the British regulatory system fell short of inspiring the institutional metamorpho-sis claimed by its proponents. An attempt to answer these questions should inform American efforts to learn from British system. I argue here that far from provid-ing a perfect model for future regulation, as its proponents suggest, the British safety case system is the wrong choice for America. Rather than relying on facility-specific and abstract demonstrations of unacceptably high risk levels, American regulatory reform should focus on mandating the installation of the best available “failsafe” tech-nology and teaching workers how to use it. Compliance documents should be transparent and available not just to regulators, but to private sector overseers who can hold them accountable, including inspectors general, the Government Accountability Office, public interest groups, the insurance industry, and investment firms. The imposition of strong civil and criminal liability is far more likely than safety cases to alter in-dustry complacence and produce real safety improvements. The remainder of this Article describes in more detail how the British system results in insufficiently protective and likely ineffective plans. It examines evidence indicating that the British regime is in trouble, including an HSE self-audit in 2005 that indicated profound gaps in the system’s effectiveness. This Article considers why the risk

15 See Siobhan Hughes & Stephen Power, BP Spill—Panel Staff Cites Management Failings,

Wall St. J., Dec. 3, 2010, at A6 (reporting that BP’s cost-cutting moves in the years leading up to the spill created the maintenance conditions that contributed to it); Siobhan Hughes & Ben Casselman, BP Took Risk on Well Job: Investigator, Wall St. J., Nov. 9, 2010, at A1 (reporting that BP removed a safeguard of heavy drilling mud before fully sealing the well with a cement plug, with the result that a crucial backup device was never installed); Frontline: The Spill (PBS television broadcast Oct. 26, 2010), available at http://www.pbs. org/wgbh/pages/frontline/the-spill/. Don Parus, the plant manager of BP’s largest refin-ery in the United States, located in Texas City, Texas, made repeated trips to London to plead for relaxation of cost-cutting edicts because he was concerned about their implica-tions for safety. Id. At one point he even presented a PowerPoint showing pictures of work-ers who had died at the refinery in an effort to bolster his case. Id. However, his efforts were fruitless because on March 25, 2005, an explosion occurred that killed fifteen people at the Texas refinery. Id.


standards tolerated under the British system are inappropriate in the context of American law. It concludes that given the resource con-straints plaguing the Bureau of Ocean Energy Management, Regula-tion and Enforcement—at the moment, it has approximately fifty-five to sixty inspectors to cover 3500 offshore facilities—wholesale adoption of the safety case regime will prove an expensive and negative distrac-tion to American efforts to strengthen regulation offshore.16

I. “It Can Get Very Complicated”17

The British government has grappled with the safety of deep well drilling for close to half a century, ever since the discovery of vast oil reserves in the North Sea in the late 1960s. The discovery was perceived as an economic miracle in Britain, staving off grave financial hardship and allowing the country to reclaim its position as an industrial power-house within the European community.18 Few people looked this providential gift horse in the mouth and regulation in the North Sea was quite lax for many years because the government had no interest in interfering with the rapid development of oil resources.19 Oil rigs can be analogized to apartment houses operating on top of unpredictably active volcanoes. When aspects of oil production go wrong, they easily degenerate into tragedy. Two catastrophic accidents— Sea Gem in 1965 and, especially, Piper Alpha in 1988—provoked politi-cal and social upheaval throughout Britain.20 In the wake of Piper Al-pha, a report by Lord William Douglas Cullen21 roundly condemned the flaws of the regulatory system.22 Lord Cullen concluded that al-

16 Leslie Eaton et al., Inspectors Adrift in Rig-Safety Push, Wall St. J., Dec. 3, 2010, at A1

(reporting on the extraordinarily difficult challenges U.S. inspectors encounter when po-licing safety in the Gulf of Mexico).

17 ALARP at a Glance, supra note 9. 18 Oil and Gas Law, supra note 3, at 117. 19 Id. at 123–24; see Charles Woolfson et al., Paying for the Piper: Capital and La-

bour in Britain’s Offshore Oil Industry 19 (1997) (“Britain’s oil was to be extracted at the fastest rate possible, with limited state control and in conditions of close commercial partnership between American oil companies and banks and those of Britain.”).

20 Woolfson et al., supra note 19, at 106–29, 301–27 (describing the Piper Alpha tragedy and its aftermath, especially the impact of these events on the British labor union movement).

21 Lord Cullen is a former member of the Scottish judiciary with an impeccable repu-tation for public service and integrity. See High Profile Judge’s Lockerbie Role, BBC News ( Jan. 22, 2002, 4:31 PM), http://www.simonbaker.me/2/hi/in_depth/1775558.stm.

22 Lord Cullen, The Public Inquiry into the Piper Alpha Disaster 1–5 (1990) [hereinafter Cullen Report] (presented to Parliament by the Secretary of State for En-ergy by command of Her Majesty).


though the British Department of Energy had inspected the facility in June 1987 and again in June 1988—only weeks before it blew into piec

ssing or monitoring

crucial to establish the inde-end

es—

those inspections were . . . superficial to the point of being of little use as a test of safety on the platform . . . [and] the evi-dence led me to question, in a fundamental sense, whether the type of inspection practiced by the [Department of En-ergy] could be an effective means of assethe management of safety by operators.23

Among the most important consequences of Lord Cullen’s report was the transfer of responsibility for controlling offshore safety hazards from the Department of Energy, which was also regarded as the oil in-dustry’s “sponsoring” department, to the HSE, the English equivalent of the U.S. Occupational Safety and Health Administration (OSHA).24 This separation of function was deemed p ence of regulatory oversight. At the time of Piper Alpha, the British health and safety regulators were already in the throes of adopting goal-oriented regulation to re-place prescriptive regulation. Proponents justified this transition by ar-guing that if companies assumed responsibility for designing their own safety systems, they would embrace a “culture of safety” far more enthu-siastically than if they were subject to rigid rules that led to mindless “box-ticking.”25 To develop redundant systems capable of preventing accidents on facilities operating in such a hostile environment would

23 Id. at 3. 24 Oil and Gas Law, supra note 3, at 124. 25 Id. at 125. The term “box-ticking” is a label intended to connote profound disdain for

a bureaucratic mindset that saps individual initiative and usurps corporate autonomy to the ultimate disadvantage of true safety. See, e.g., Angela Henshall, Deep Water, Deep Trouble, The Oil Industry Must Rethink Risk Management Procedures, Wall St. J. (Oct. 6, 2010, 4:05 AM), http://online.wsj.com/article/SB10001424052748703453804575479643629599782.html (“Piper Alpha caused the UK industry to evolve in a very different direction to the U.S. It adopted a principals [sic] based approach rather than more prescriptive rule setting. Risk experts argue a more flexible, ‘goal-setting’ strategy has proved far better suited to achieving cost-effective solutions to offshore safety. They believe there are a number of disadvantages to a prescriptive approach that will need to be addressed in the Gulf of Mexico, not least that it encourages a box-ticking mentality.”); see also Phil Davis, Economist Intelligence Unit, Beyond Box-Ticking: A New Era for Risk Governance 4, 18–19 (2009), available at http://www.acegroup.com/Attachments/EIU_risk_survey-report-Sept_09.pdf (reporting on a worldwide survey of business leaders who decry the perils of the rigid “box-ticking” mental-ity for the management of corporate financial risk that was prepared by staff of British maga-zine The Economist).


ta bottom-up, fully integrated cooperation by everyone on a rig, or so British policymakers reasoned. The core requirements of such planning depend heavily on quan-titative risk assessment and cost-benefit analysis conducted as an inte-gral part of the document and designed to reduce the cost of preven-tive measures. The application of both methodologies in the context of safety cases is based on the statutory requirement that employers pro-vide protection “so far as is reasonably practicable” (SFAIRP), which was originally established in the Health and Safety at Work etc. Act of 1974.

ke

efit balancing approach is ro

quantitatively, using algorithms that appear to be largely the province of a cottage industry of consulting firms.30 Duty holders are also en-

26 HSE has adopted its own regulatory mandate that risk offshore be reduced “as low as reasonably practical” (ALARP).27 At least so far as these verbal formulations go, their cost-benin ugh alignment with the analogous standard in the U.S. Occupa-tional Safety and Health Act (OSH Act).28 HSE instructs that safety cases should contain number crunching demonstrating that risks in any given area are not higher than one in 1000 fatalities and that preventive measures—e.g., the installation of equipment and training programs—do not result in expenditures greater than £1 million (about $1.6 million).29 Additional guidance advises duty holders, who range from the company or companies that own the rig to the multiple contractors brought in to install and main-tain drilling equipment, to calculate whether these numbers are met

26 Health and Safety at Work etc. Act, 1974, c. 37, § 2(1). HSE asserts that the statutory

formulation—SFAIRP—and the regulatory formulation—ALARP—are “interchangeable,” but warns duty holders to mind their terminology when referring to either standard in “legal” documents. ALARP at a Glance, supra note 9.

27 ALARP at a Glance, supra note 9. 28 See 29 U.S.C. § 655(b)(5) (2006) (employing a standard that takes into account fea-

sibility). 29 APOSC Regulations, supra note 8, ¶ 39 (“An individual risk of death of 10¯3 per year

has typically been used within the offshore industry as the maximum tolerable risk.”); id. ¶ 58 (“HSE’s ‘Reducing Risks Protecting People’ document sets the value of a life at £1,000,000 and by implication therefore the level at which the costs are disproportionate to the benefits gained.”).

30 See Cost Benefit Analysis (CBA) Checklist, Health & Safety Executive, http:// www.hse.gov.uk/risk/theory/alarpcheck.htm (last visited Apr. 15, 2011); HSE Principles for Cost Benefit Analysis (CBA) in Support of ALARP Decisions, Health & Safety Executive, http://www.hse.gov.uk/risk/theory/alarpcba.htm (last visited Apr. 15, 2011). The 2005 revisions to the ALARP guidance somewhat deemphasized the performance of quantitative risk assessment, acknowledging that some risks could be described qualitatively and that HSE had also prescribed requirements that must be implemented regardless of site-specific risk assessment. See APOSC Regulations, supra note 8, at 5 (“Changes to APOSC”).


couraged to refer to what is generally considered “good practice” at facilities like theirs.31 HSE documents are replete with exhortations that sound safety-minded:

In essence, making sure a risk has been reduced ALARP is about weighing the risk against the sacrifice needed to further reduce it. The decision is weighted in favour of health and safety because the presumption is that the duty-holder should implement the risk reduction measure. To avoid having to make this sacrifice, the duty-holder must be able to show that it would be grossly disproportionate to the benefits of risk re-duction that would be achieved.32

But the regulations also circumscribe expectations of how much com-panies are required to spend on limiting risk, preventing accidents, and providing protection. For example, in an “Information Sheet” designed to explain how safety cases should “demonstrate compliance with the relevant statutory provisions,” HSE disclaims the “precautionary prin-ciple,” viewed by many conservative commentators and industry repre-sentatives as the source of needlessly expensive regulatory require-ments that protect against risks that are far from certain:

[I]nvocation of the precautionary principle may be appropri-ate in addressing the introduction of genetically modified plants where there is good reason to believe that the modifica-tions could lead to harmful effects on existing habitats, and there is a lack of knowledge about the relationship between hazard and the consequence. In the offshore industry the hazards and consequences are well understood and hence conventional assessment techniques can be used to evaluate the risks, using a cautionary approach rather than application of the precautionary principle. Therefore invocation of the pre-

31 ALARP at a Glance, supra note 9 (“In most situations, deciding whether the risks are

ALARP involves a comparison between the control measures a duty-holder has in place or is proposing and the measures we would normally expect to see in such circumstances i.e. relevant good practice. . . . We decide by consensus what is good practice through a proc-ess of discussion with stakeholders, such as employers, trade associations, other Govern-ment departments, trade unions, health and safety professionals and suppliers.”).

32 ALARP at a Glance, supra note 9.


cautionary principle is extremely unlikely to be appropriate offshore.33

In 2005, HSE relaxed its rules, allowing duty holders to review safety cases once every five years rather than once every three years.34 The rules were further loosened to provide that a safety case— para-doxically described as a “living document” —lasts the life of a facility without being resubmitted for explicit approval to HSE, although duty holders continue to have the obligation to revise them “as appropri-ate.”35 “It can get very complicated,” HSE adds, in a throwaway sentence that is inadvertently both humorous and exasperating.36 Safety cases are often “bulky.”37 A recent PowerPoint presentation by Kevin Kinsella, a safety case expert at Environmental Resources Management, a global consulting firm, estimates that the typical safety case for a medium-size North Sea production platform covers anywhere from 490 to 660 pages.38 The entire system is summarized in the following diagram:39

33 Health & Safety Exec., Offshore Information Sheet No. 2/2006, Offshore In-

stallations (Safety Case) Regulations 2005: Regulation 12 Demonstrating Compli-ance with the Relevant Statutory Provisions 7 (2006) [hereinafter Safety Case Reg-ulations] (emphasis added), available at http://www.hse.gov.uk/offshore/is2-2006.pdf.

34 Guide to Offshore Installations, supra note 12, at 7. 35 Id. at 12. 36 Id. 37 Id. at 11. 38 Great Debate Conference, supra note 2 (follow “4. Kevin Kinsella_UK Offshore Safety

Cases_Lessons Learnt.pdf” hyperlink at bottom of page). For further information about Environmental Resources Management, see About Us, Envtl. Res. Mgmt., http://www. erm.com/About-Us/ (last visited Apr. 15, 2011).

39 Source: Safety Case Regulations, supra note 33, at 5.


Lengthy documents are common in the regulatory world. How-ever, the longer and more technical such documents become, the greater the need for them to be digested and implemented by highly trained technical experts. The real question is whether safety cases writ-ten by and for highly skilled engineers can be translated into meaning-ful changes in behavior among workers who differ greatly in education. The more dense and complex the document, the greater the effort re-quired to implement it among the large majority of workers who lack such advanced technical training.

II. But Does the Safety Case System Work?

Because no major catastrophes have occurred in the British sec-tion of the North Sea since Piper Alpha, it is tempting to conclude that the system is working, at least to the extent of preventing such hazards. However, two indicators suggest that Britain’s safety case system is not nearly as effective as it may appear. The first is a damning indict-ment of overall safety consciousness offshore prepared by HSE auditors on the basis of inspections of 100 individual facilities.40 The second in-volves figures compiled by the International Association of Drilling Contractors (IADC) showing routine offshore injury rates in Britain and the United States.41 These figures reveal a less disparate safety re-

40 Health & Safety Exec., Key Programme 3: Asset Integrity Programme 5 (2007) [hereinafter KP 3 Report], available at http://www.hse.gov.uk/offshore/kp3.pdf.

41 See infra Part II.B.


cord than we might expect given the supposedly superior British regu-latory system.

A. HSE’s Self-Audit

From 2005 to 2007, prompted by concerns that the North Sea in-frastructure was aging rapidly and that new, relatively inexperienced companies were assuming control of many North Sea facilities as the largest players moved to more lucrative production sites around the globe, HSE reviewed maintenance practices with respect to “Safety Criti-cal Elements” that are installed to “prevent, control, or mitigate major hazards.”42 Its report, entitled Key Programme 3 (KP 3 Report ), was ex-tremely troubling, concluding that at more than fifty percent of the 100 installations inspected, the state of the physical plant was “poor.”43 The report’s anonymous authors dismissed out of hand the oil industry’s defense that these problems occurred only in non-safety-critical aspects of the infrastructure: “This [claim] illustrates a lack of understanding in many parts of the industry that degraded non-safety-critical plant and utility systems can impact on safety critical elements in the event of a major accident reducing their performance.”44 Beyond concerns such as whether rusting external stairs could col-lapse in the event of a fire, the KP 3 Report inspectors found that systems critical to the survival of the workforce during major accidents were in terrible shape.45 For example, HSE inspectors tested so-called “TR HVAC” systems, the mechanical means by which a compartment con-taining people can be closed off from the incursion of flammable and toxic gases during an explosion or fire.46 Such systems failed to some degree in sixty-four percent of such tests, revealing a “picture of inade-

42 See KP 3 Report, supra note 40, at 8. (“The offshore oil and gas industry in the UK

Continental Shelf (UKCS) is a mature production area. Much of the offshore infrastruc-ture is at, or has exceeded, its intended design life. During the 1990s low oil prices and initiatives to reduce costs led to a reduction in the offshore workforce. This in turn led to reductions in levels of maintenance and, as a result, an overall decline in the integrity of fabric, structures, plant and systems.”); see also Walker Letter, supra note 12, at 3.

43 KP 3 Report, supra note 40, at 7. 44 Id. Unlike most American government reports, HSE documents are devoid of the

names of individual officials who wrote them or who can be contacted for further informa-tion. See Publications, Health & Safety Executive, http://www.hse.gov.uk/pubns/index. htm (last visited Apr. 15, 2011).

45 KP 3 Report, supra note 40, at 16. 46 See id. at 7, 16.


quate testing and very poor reliability” for a critical component of emergency response.47 As for the notion that safety cases are living documents that instill an ongoing commitment to the prevention of major hazards, the KP 3 Report concluded that managers of offshore facilities rely far too exten-sively on “operational risk assessments” —that is, theoretical modeling of how workers are supposed to react—to compensate for degraded infrastructure.48 The report also noted that at many facilities, “per-formance standards” —the fundamental building block of safety cases and their implementation—were “generic in nature without being spe-cific and measurable.”49 The report elaborated:

Examples of measureable criteria are valve maximum closure times and maximum allowable leak rates. An example of not being specific was where a dutyholder used the same performance standard across all their installations and there were differences in the actual systems on the installation that required changes to functionality.50

Of course, the problem of cut-and-paste generic standards in safety protocols emerged with savage irony in the aftermath of the BP Gulf spill, when the Associated Press discovered that the company’s spill pre-vention control plan included: a discussion of the consequences of a spill for walruses, when such animals do not live in the area; the name of a deceased consultant on a list of experts to consult in the event of a spill; and a series of disconnected or wrong phone numbers as contacts during an emergency response.51 In addition to overreliance on cookie-cutter prototypes of critical documentation, the HSE team mentions repeatedly that severe “skills shortages” in engineering disciplines have accelerated corporate inat-tention to infrastructure maintenance.52 The shortage, described as a

47 Id. at 17. 48 See id. at 6. 49 Id. at 21. 50 Id. (emphasis added). 51 Holbrook Mohr et al., BP’s Gulf Oil Spill Response Plan Lists the Walrus as a Local Spe-

cies. Louisiana Gov. Bobby Jindal Is Furious., Christian Sci. Monitor, June 9, 2010, http:// www.csmonitor.com/From-the-news-wires/2010/0609/BP-s-gulf-oil-spill-response-plan-lists-the-walrus-as-a-local-species.-Louisiana-Gov.-Bobby-Jindal-is-furious.

52 KP 3 Report, supra note 40, at 7, 12 (describing the dearth of technicians offshore, both because facility operators do not have enough employees with such skills and because of limited “bed space” —rooms that can accommodate visitors in addition to the perma-nent crew—aboard such facilities).


“problem of the industry’s own making,” began in the 1990s when low oil prices prompted companies to “shed significant numbers of onshore and offshore workers.”53 This kind of reaction is a strong indicator of a weak and ineffective regulatory regime that does not exert sufficient pressure on corporate decisions to eliminate, for profit-driven reasons, the human and technological resources essential to achieving compli-ance. In July 2009, HSE issued a follow-up “review report” (KP 3 Review) on the offshore industry’s progress in responding to the findings in its KP 3 Report.54 This review involved a sharply circumscribed methodology in comparison to the original report, relying to a significant extent on information provided by offshore companies. For example, HSE only inspected five facilities to check on their progress in addressing the safety concerns it found during the 100 inspections it conducted for KP 3 Report.55 The review concludes that “leadership is now firmly on the industry’s agenda” and that “progress has been made in key areas, which may produce a positive impact on safety culture offshore.”56 With some-what less equivocation, HSE concludes that “strong evidence” indicates that the most serious “red traffic light” problems identified in its original report were “closed satisfactorily.”57 The KP 3 Review does not explain further how HSE can have such confidence given the limited number of follow-up inspections that were conducted.

B. British and American Safety Records

In the aftermath of the Deepwater Horizon spill, investigations of the chain of events that produced the disaster came to discouraging conclusions about the effectiveness of the American regulatory system.58 Press accounts demonstrated that the Minerals Management Service (MMS) was a captive of the U.S. oil industry.59 The oil spill commission appointed by President Obama concluded:

53 Id. at 28. 54 Health & Safety Exec., Key Programme 3: Asset Integrity, A Review of In-

dustry’s Progress (2009), available at http://www.hse.gov.uk/offshore/kp3review.pdf. 55 Id. at 9. 56 Id. at 4. 57 Id. at 3. 58 See, e.g., Jason DeParle, Minerals Service Had a Mandate to Produce Results, N.Y. Times,

Aug. 8, 2010, at A1 (“The causes of the spill remain unclear, but a number of the agency’s actions have drawn fire . . . . The story has gained a bacchanal gloss because agency em-ployees in Louisiana and Colorado took meals, gifts and sporting trips paid for by the in-dustry, and several Colorado officials had sex and used drugs with industry employees.”).

59 Id.


The blowout was not the product of . . . aberrational decisions made by rogue industry or government officials . . . . Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur. The missteps were rooted in systemic failures by industry management (extending beyond BP to contractors that serve many in the industry), and also by failures of government to provide effective regulatory oversight of offshore drilling.60

In short order, the benighted agency was renamed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).61 But the renaming has yet to enhance the agency’s reputation. It continues to labor under the strong impression left by the Gulf spill that regula-tory oversight offshore approaches the end of the continuum where no effective government controls are maintained over offshore operations. It is somewhat disconcerting, then, to discover that, according to statistics compiled by the International Association of Drilling Contrac-tors (IADC), a trade association with scant motivation to exaggerate safety problems, the rates of offshore injuries in the United States and Europe were not as disparate as one might suppose they would be given the claims made about the efficacy of the British regulatory system. The IADC reports cover only the drilling industry, are submitted voluntarily, and are not audited.62 Here are those statistics for the reporting periods in 2007, 2008, and 2009:63

60 BP Commission Report, supra note 2, at 122. 61 U.S. Sec’y of the Interior, Order No. 3302, Change of the Name of the Minerals Man-

agement Service to the Bureau of Ocean Energy Management, Regulation, and Enforcement ( June 18, 2010), available at http://www.doi.gov/deepwaterhorizon/loader.cfm?csModule= security/getfile&PageID=35872.

62 ASP Report Disclaimer, Int’l Ass’n Drilling Contractors (Apr. 30, 2010), http://www.iadc.org/asp/2009%20Annual%20Report/ASPREPORTDISCLAIMER.htm.

63 Source: Incident Statistics Program, Int’l Ass’n Drilling Contractors, http://www. iadc.org/asp.htm (last visited Apr. 15, 2011).


U.S. Waters 2009 2008 2007 Total Man Hours 33,501,661 39,665,580 39,701,950 Total Medical Treatment Incidents 72 118 115 Total Restricted Work Incidents 40 100 97 Total Lost Time Incidents 32 26 56 Total Fatalities 2 3 0 Total Recordables 146 247 268 LTI Rate64 0.20 0.15 0.28

European Waters 2009 2008 2007 Total Man Hours 32,947,340 38,049,523 35,007,255 Total Medical Treatment Incidents 48 95 81 Total Restricted Work Incidents 24 43 42 Total Lost Time Incidents 48 51 72 Total Fatalities 1 0 0 Total Recordables 121 189 195 LTI Rate 0.30 0.27 0.41

The 2009 statistics were reported in a PowerPoint presentation by Ken Arnold, senior technical advisor to Worley Parsons, a global engi-neering firm.65 His presentation was part of a conference sponsored by the Society of Petroleum Engineers and held in Houston, Texas on Sep-tember 16, 2010.66 The conference appears to have been designed to provide an opportunity for global consultants familiar with the British system to sing its praises before American oil industry professionals.67 But Arnold actually opposed adoption of the safety case regime, argu-ing that “accidents are avoided by people operating in supportive or-ganizations” and that the oil industry in America does “NOT need an-other level of analysis and documentation.”68 Of course, routine injury rates are not a perfect proxy for “process safety,” a term of art in the engineering profession that connotes the

64 “Lost time incidence” (LTI) is defined as a work-related incident (injury or illness) to an employee in which a physician or licensed health care professional recommends days away from work due to the incident.

65 See generally Ken Arnold, Production Operations—The Need for a Safety Case, Ad-dress Before the Society of Petroleum Engineers, Gulf Coast Section (Sept. 20, 2010), available at http://www.spegcs.org/en/cev/1795 (follow “2. Ken Arnold _Safety Case Proc-ess in Production Operations.pdf” hyperlink at bottom of page).

66 See id.; Great Debate Conference, supra note 2. 67 See Great Debate Conference, supra note 2. 68 Arnold, supra note 65, at 34.


failure of manufacturing systems involving the use or extraction of ex-tremely hazardous substances.69 Individual workers may be hurt on the job despite the implementation of a sophisticated management system that is designed to prevent major mistakes in the system for processing chemicals or producing oil offshore.70 Workers may underreport inju-ries for a variety of reasons, including the fear of retaliation from su-pervisors seeking to cover up hazardous conditions.71 However, even if catastrophes are not on a straight linear continuum with inordinate daily injuries, poor maintenance, and weak regulatory controls, they are a foreseeable result of the cumulative consequences of neglect in those areas. It is also true that accidents are possible, even at companies with strong safety cultures. Yet analyses of the aftermath of major industrial catastrophes never conclude that a shipshape company, with a strong safety culture, operating in a rigorous regulatory environment, was in fact ambushed by a freak instance of bad luck. Instead, report after re-port concludes that the absence of a strong regulatory presence and corporate neglect of safety at the highest levels were quid pro quos for accidents that were waiting to happen.72 Poor maintenance and signifi-cant injury rates are reliable indicators that instilling a safety culture— the ostensible goal of the British system—remains elusive offshore.73

III. Conflicting Values in the Law

The fundamental principles of British and American worker pro-tection laws are superficially similar—agencies are instructed to balance anticipated risks against the costs of reducing them.74 These mandates have produced a pervasive reliance on quantitative risk assessment in both countries. But as implemented in the context of offshore regula-

69 See Andrew Hopkins, Thinking About Process Safety Indicators, 47 Safety Sci. 460, 460 (2009) (explaining the differences between process safety and personal safety at work).

70 See id. 71 See, e.g., Telos Group, BP Texas City Site Report of Findings 8 (2005), available

at http://www.propublica.org/documents/item/the-telos-report. 72 See e.g., BP Commission Report, supra note 2, at vii; Cullen Report, supra note 22,

at 1–5. 73 See Ben Ale, More Thinking About Process Safety Indicators, 47 Safety Sci. 470, 470

(2009) (“[S]ometimes the frequency of small scale accidents can be an indicator for the probability of a large one.”).

74 Compare Health and Safety at Work etc. Act, 1974, c. 37, § 2(1) (U.K.) (charging employers to ensure employee health and safety “so far as is reasonably practicable”), with Occupational Safety and Health Act (OSH Act), 29 U.S.C. §§ 652(8), 655(b)(5) (2006) (setting standards “which most adequately assure, to the extent feasible” the health and safety of employees).


tion, these surface similarities diverge in two key respects. Substantively, the British have been willing to tolerate a risk standard—one in 10¯³ (one in 1000)75—that is significantly less protective than what Ameri-can regulators, instructed by court decisions, are allowed to accept. Procedurally, the British are willing to delegate to industry the role of performing quantitative risk assessments on individual facilities, while American regulators generally conduct their own analyses and apply them in the context of industry-wide rulemaking.

A. The British Reliance on Numbers

The British Health and Safety at Work etc. Act of 1974 requires protection “so far as is reasonably practicable” (SFAIRP).76 This stan-dard is based upon a 1949 case, Edwards v. National Coal Board, decided by the Court of Appeal, Britain’s equivalent of the United States Su-preme Court.77 The case involved a worker in a coal mine who was killed by a collapsing wall of coal mining waste on the side of a road where he was walking; his widow won the case in the highest court after having lost it below.78 In the passage commonly considered to be the most significant in the opinion, Judge Asquith wrote:

“Reasonably practicable” is a narrower term than “physically possible” and seems to me to imply that a computation must be made by the owner, in which the quantum of risk is placed on one scale and the sacrifice involved in the measures neces-sary for averting the risk (whether in money, time or trouble) is placed in the other; and that if it be shown that there is a gross disproportion between them—the risk being insignifi-cant in relation to the sacrifice—the defendants discharge the onus on them. Moreover, this computation falls to be made by the owner at a point of time anterior to the accident.79

75 APOSC Regulations, supra note 8, ¶ 39. 76 Health and Safety at Work etc. Act § 2(1). HSE asserts that the statutory formula-

tion—SFAIRP—and the regulatory formulation—ALARP—are “interchangeable,” but warns duty holders to mind their terminology when referring to either standard in “legal” documents. ALARP at a Glance, supra note 9.

77 [1949] 1 K.B. 704 (Eng.). Excellent background on the British Court system is pro-vided by the Library of Congress. Legal Research Guide: United Kingdom, Libr. Congress, http://www.loc.gov/law/help/uk.php (last updated Aug. 30, 2010).

78 Edwards, [1949] 1 K.B. at 712. 79 Id. at 704.


As discussed earlier, HSE obtained jurisdiction over offshore work from the Department of Energy in 1992 and was immediately con-fronted with the need to further interpret what level of risk was accept-able in an industry that represented a crucial engine for the country’s economy, but that was compelled to operate in an environment as dan-gerous as it was unforgiving. The result was the “as low as reasonably practicable” standard that has been interpreted to establish one in 1000 deaths and a value of £1 million per life as the minimum levels of risk to be tolerated.80 Although HSE announced in 2005 that it would rely less on quantitative risk assessment, giving industry the flexibility to use qualitative (or non-numerical) assessments in safety cases,81 this flexibil-ity is unlikely to result in any meaningful increase in the levels of pro-tection provided to workers on rigs and platforms because HSE has not required any change in the substantive standard it will use to judge safety cases for the small number of new wells drilled each year.82

B. The United States’ More Protective Approach

The central judicial interpretation of the levels of protection re-quired by the OSH Act83 is the 1980 Supreme Court decision in AFL-CIO v. American Petroleum Institute, commonly known as the Benzene deci-sion.84 The case involved an OSHA decision to set the “permissible ex-posure limit” (PEL) for benzene at one part per million (ppm) in air.85 The Court reversed and remanded the decision, concluding that OSHA’s evidence did not rise to the level of proving a “significant risk”86—its interpretation of the statutory standard that the agency should adopt rules that are “reasonably necessary or appropriate” using the “best available evidence” to assure that “to the extent feasible” that “no employee will suffer material impairment of health or functional capacity.”87 The Court also discussed the question of how to measure risk levels numerically:

80 See supra notes 9–11 and accompanying text. 81 See Walker Letter, supra note 12. 82 See KP 3 Report, supra note 40, at 8 (explaining that the North Sea is a “mature pro-

duction area” where new investment in discovering and extracting oil is unlikely to occur). 83 29 U.S.C. § 655(b)(5) (2006). 84 448 U.S. 607 (1980). 85 Id. at 632. 86 Id. at 653. 87 Id. at 612. This paraphrase of the statute’s mandate is based on sections 3(8) and

6(b)(5) of the OSH Act. See 29 U.S.C. §§ 652(8), 655(b)(5).


[T]he requirement that a “significant” risk be identified is not a mathematical straitjacket. It is the Agency’s responsibility to determine, in the first instance, what it considers to be a “sig-nificant” risk. . . . If, for example, the odds are one in a billion that a person will die from cancer by taking a drink of chlo-rinated water, the risk clearly could not be considered signifi-cant. On the other hand, if the odds are one in a thousand that regular inhalation of gasoline vapors that are 2% ben-zene will be fatal, a reasonable person might well consider the risk significant and take appropriate steps to decrease or eliminate it.88

Seven years after remand, OSHA lowered the benzene limit after the International Agency for Research on Cancer concluded that workers exposed to ten to 100 ppm of benzene faced an excess leukemia risk of 170 per 1000.89 Like the OSH Act, other American health, safety, and environ-mental statutes and regulations almost always establish through verbal formulations the levels of protection to be provided to the public as a whole and workers in particular. In fact, American statutes contain only two examples of such numerical standards, both of which tolerate no more than a one in 1,000,000 level of risk. The first is section 408(b)(2)(A)(ii) of the Food Quality Protection Act, interpreting the statutory standard of a “reasonable certainty of no harm,”90 and the second is section 112 of the Clean Air Act, setting the maximum level of exposure for the “most exposed” individuals in the context of limiting exposure to carcinogens.91 Both of these provisions appear in sections of the statutes that do not allow the balancing of costs and benefits, and they involve the protection of the general public, not workers.92 All the same, congressional unwillingness to embrace a higher numerical level of risk is worth noting.

88 Benzene, 448 U.S. at 655. 89 Robert V. Percival et al., Environmental Regulation, Law, Science, and Pol-

icy 211 (6th ed. 2009). 90 See Food Quality Protection Act, 21 U.S.C. § 346a(b)(2)(A)(ii) (2006). 91 Clean Air Act, 42 U.S.C. § 7412(c)(9) (2006) (providing for the delisting of source

categories that emit carcinogens); id. § 7412(f)(2) (authorizing the EPA Administrator to regulate sources of carcinogens if Congress does not act).

92 See 21 U.S.C. § 346; 42 U.S.C. § 7412.


C. Comparing the Systems

The British comfort with numbers—especially a risk level meas-ured as one in 1000 deaths and a value per life lost of £1 million—is striking, as is HSE’s willingness to delegate the chore of deciding what actions to take to meet these numerical standards. Of course numerical risk factors, such as risk levels in deaths per thousands and cost-benefit analysis as dollars per statistical life, are routinely incorporated in documents used as the basis for regulation in the United States, includ-ing regulatory impact assessments prepared by the government.93 However, I have been able to find only two examples where an Ameri-can agency used numerical risk levels to explain how a final regulation would work.94 Embracing such numbers in safety cases largely as substi-tutes for regulation reflects comfort with the reliability of the method-ologies used to produce such numbers, a comfort that American regu-lators are rightly unwilling to accept. As for the British regulatory system’s decision to value a worker’s life at £1 million,95 this figure is 5.5 times lower than the $8.8 million “Value of Statistical Life” (VSL) used by the Environmental Protection

93 See, e.g., U.S. EPA, Regulatory Impact Analysis for EPA’s Proposed RCRA Regula-

tion of Coal Combustion Residues (CCR) Generated by the Electric Utility Industry 121–22 (2010) [hereinafter EPA Regulatory Impact Analysis for RCRA], available at http:// www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480ae5d01.

94 The first example is the EPA’s efforts to set a lifetime exposure risk for airborne benzene for the general population where it set up a system that established a “maximum level of a pollutant for a lifetime” (MIR) of one in 10,000 as “acceptable” and then prom-ised to consider other health and safety factors in making a final regulatory determination. National Emission Standards for Hazardous Air Pollutants; Benzene Emissions, 54 Fed. Reg. 38,044, 38,048 (Sept. 14, 1989) (codified at 40 C.F.R. pt. 61). “The presumptive level provides a benchmark for judging the acceptability of maximum individual risk (‘MIR’), but does not constitute a rigid line for making that determination.” Percival et al., supra note 89, at 291. The second is OSHA’s use of such figures in explaining how it sets permis-sible exposure levels (PELs) for toxic chemicals, which is typified by its Federal Register no-tice for the final rule controlling workplace exposures to hexavalent chromium. Occupa-tional Exposure to Hexavalent Chromium, 71 Fed. Reg. 10,100, 10,225 tbl.VII-2 (Feb. 28, 2006) (codified at 29 C.F.R. pt. 1910, 1915, 1917, 1918, 1926). The rule’s preamble con-tains a table showing the risk estimates following the imposition of OSHA PELs for a series of chemicals, including ethylene oxide, asbestos, benzene, formaldehyde, methylenediani-line, cadmium, 1,3-butadiene, methylene chloride, and chromium VI. Id. The table indi-cates risks as high as ten per 1000 workers that would occur if a worker was exposed con-tinuously to benzene at a level equivalent to the relevant PEL over a forty-five year period, although most of the estimated recorded risks were significantly lower than this figure. Id. OSHA does not assert that this level of risk is acceptable. Rather, it states that these levels of risk are “significant,” but were nevertheless tolerated in its past rules. Id.

95 See supra note 11 and accompanying text.


Agency (EPA) in recent rulemakings.96 The figure is one-third of the lowest VSL used by other agencies, such as the Department of Trans-portation and the Department of Health and Human Services, in con-ducting cost-benefit analyses.97

D. Secrecy

Last but not least, we have the question of how U.S. law deals with confidentiality of permitting regimes, the closest analogy to a safety case in the American system. Individual permits under the Clean Air Act and Clean Water Act, as well as other federal environmental stat-utes, are written to govern how regulated activities must be conducted at a specific facility—for example, how many and what types of air pol-lutants may be emitted,98 or the content and amount of effluent that may be discharged from a point source to surface waters.99 Those per-mits are always available to the public.100 Similarly, Congress has evi-denced a clear intent that rulemaking remain as transparent as possi-ble.101 In accord is President Obama’s often stated commitment to

96 EPA Regulatory Impact Analysis for RCRA, supra note 93, at 121. 97 John D. Graham, Saving Lives Through Administrative Law and Economics, 157 U. Pa. L.

Rev. 395, 403, 465, 497 (2008) (noting that, according to the author, who was the director of the Office of Information and Regulatory Affairs (OIRA) responsible for reviewing the economic impact of proposed regulations for President George W. Bush, OIRA advised agencies in 2003 to use VSLs ranging from one million dollars to ten million dollars, but states that the lower-end figures actually used ranged from three to five million dollars). In a recent report on the costs and benefits achieved by the Clean Air Act, the EPA used $7.4 million as the VSL in 2010. Office of Air & Radiation, U.S. EPA, The Benefits and Costs of the Clean Air Act: 1990 to 2020, at 5–20 (2010), available at http://www.epa. gov/oar/sect812/aug10/fullreport.pdf.

98 42 U.S.C. § 7503 (2006) (discussing the Clean Air Act permitting requirements for nonattainment areas).

99 See, e.g., 33 U.S.C. § 1342 (2006) (establishing the Clean Water Act’s national pollut-ant discharge elimination system permitting program).

100 See, e.g., 33 U.S.C. § 1342(j); 40 C.F.R. § 70.4(b)(3)(viii) (2009) (requiring that Clean Water Act and Clean Air Actpermits be made available to the public).

101 See, e.g., Natural Res. Def. Council v. U.S. EPA, 859 F.2d 156, 175 (D.C. Cir. 1988) (“The requirement of public participation in efforts to control water pollution is estab-lished in the congressional declaration of policy and goals of the Act . . . . The legislative history of the Act repeatedly echoes the desire ‘that its provisions be administered and enforced in a fishbowl-like atmosphere.’”); Conn. Light & Power Co. v. Nuclear Reg. Comm’n, 673 F.2d 525, 530 (D.C. Cir. 1982) (“In order to allow for useful criticism [in rulemaking], it is especially important for the agency to identify and make available tech-nical studies and data that it has employed in reaching the decisions to propose particular rules. To allow an agency to play hunt the peanut with technical information, hiding or disguising the information that it employs, is to condone a practice in which the agency treats what should be a genuine interchange as mere bureaucratic sport.”).


“open and transparent” government.102 A secret system for offshore safety cases would flout all of these well-established regimes, practices, and policies.

Conclusion: Future Directions

The best possible scenario for a safety case regime is that the own-ers and operators of offshore facilities take the preparation of such documents very seriously, to the point that the process of drafting them inculcates an effective safety culture from the top of the organization down and from the bottom of the organization up. The worst possible scenario is that safety cases are outsourced to consultants and devolve into cut-and-paste renditions of standard form reports, allowing the documents to be completed and filed without having any significant impact on the safety of the facility. In the absence of constant, stringent supervision by regulators, safety case regimes are unlikely to result in more than unsupervised exercises in self-regulation that fall at the worst scenario end of the spectrum most of the time. On December 15, 2010, the United States Chemical Safety and Hazard Investigation Board (the “Chemical Safety Board”) held a pub-lic hearing on “regulatory approaches to offshore oil and gas safety,” which involved testimony by senior regulators from Norway, Britain, and Australia, as well as by Dr. Andrew Hopkins, a world-renowned ex-pert in the incentives that inspire the inculcation of safety culture within high-hazard industries.103 All of these experts stressed that the success of safety case regimes depended on the capacity of regulators to provide concrete incentives for companies to take the preparation and implementation of such documents seriously. First and foremost, regu-lators must have adequate resources in terms of the number and qual-ity of the staff that is available to review the adequacy of safety cases, inspect facilities on a frequent basis, and bring swift enforcement action against violators. The operation of an offshore oil production facility is

102 See, e.g., Memorandum for the Heads of Executive Departments and Agencies: Transparency and Open Government, 74 Fed. Reg. 4685, 4685 ( Jan. 26, 2009) (“My Ad-ministration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration.”).

103 U.S. Chem. Safety & Hazard Bd., Public Hearing, Regulatory Approaches to Offshore Oil and Gas Safety 1–2, 7 (2010) [hereinafter CSB Safety Case Tran-script], available at http://www.csb.gov/assets/document/Transcript_of_Public_Meeting_ 12_15_2010.pdf. See generally Andrew Hopkins, Failure to Learn: The BP Texas City Refinery Disaster (2008) (analyzing the failure of management systems that led to an explosion at this refinery in 2005, killing fifteen workers).


enormously complex from a technical perspective, requiring an inter-disciplinary team of well-trained experts.104 A thorough inspection of such facilities can take several days and involve a multi-disciplinary team of several inspectors.105 As Dr. Hopkins put it:

[A successful safety case regime] requires a highly competent and well resourced and independent regulator. Without a well resourced regulator safety case is no better than any alterna-tive. Indeed, in some cases it can be worse. So any decision to introduce a safety vase regime must involve a commitment to ensure proper funding. . . . . . . .[A] safety case regime is worthless unless the regulator is properly funded.106

As for the importance of a deterrence-based regime that does not place the regulator in the position of counseling offshore owners and operators into compliance without creating the incentive for compa-nies to take the preparation and implementation of safety cases seri-ously in the first instance, John Clegg, the retired head of the Austra-lian National Offshore Petroleum Safety Authority, told the Chemical Safety Board:

The employer treats the whole process [the safety case re-gime] as a necessary evil to get a tick in the box and the regulator to operate, i.e. they see it as an impediment to op-eration. The employer treats it as a one-off event—it’s only a piece of paper, isn’t it . . . . Initially, we tried to work with industry to improve their safety cases. We did that for about 18 months. But we found that in the end the operators were . . . using the regulator as a free consultant. So we stopped that. And we just moved straight through rejection. And I think in the first year after we rejected half-dozen or so safety cases. And that certainly

104 CSB Safety Case Transcript, supra note 103 at 26–27 (describing the technical

complexity of oil production offshore). 105 As former British regulator Ian Whewell told the Chemical Safety Board, HSE typi-

cally conducted a “three-day inspection with three to four inspectors in various disciplines with areas identified prior to the visit as being a priority and needing review and needing to be properly looked at.” Id. at 120.

106 Id. at 35–36.


brought the attention of the industry to the need to do a bet-ter job.107

The regulators testifying before the Chemical Safety Board did not explicitly address how to ensure that regulators remain independent in relationship to the oil and gas industries. But it is worth noting that for the British in the wake of the Piper Alpha disaster, the separation of the functions of leasing drilling rights and overseeing the safety of such op-erations was deemed crucial to the effectiveness of the latter work. The regulators also did not address whether the confidentiality of safety cases was consistent with the fundamental values that define the Ameri-can regulatory system, but I would add that principle to the list of the conditions precedent for an effective safety case regime. At the moment and for the foreseeable future, the United States does not come close to satisfying any of these preconditions. The sup-posedly momentous conversion of MMS into BOEMRE did not trans-late into increased effectiveness in the actual policing of the over 3500 oil platforms and drilling rigs now located in the Gulf of Mexico. Inves-tigative reporting by the Wall Street Journal on December 3, 2010, was grim regarding the true significance of the reorganization, noting that BOEMRE was only able to field a “small cadre” of fifty-five inspectors armed with “checklists and pencils” to cover the entire offshore indus-try, resulting in the daunting ratio of one inspector for every sixty-three offshore facilities.108

[T]hese inspectors have been overruled by industry, under-mined by their own managers and outmatched by the sheer number of offshore installations they oversee. Inspectors come into the job with little or no hands-on experience in deep-water drilling, learning as they go. [They] are largely checking hardware [and] get good marks for reducing workplace injuries on rigs and platforms. But safety experts say the main causes of major accidents are almost always human error, not the mechanical failure that inspectors focus on. Inspectors aren’t looking for signs of sys-temic safety problems—poor decisions, cutting corners, mud-dled responsibilities—that investigators are linking to the Deepwater Horizon explosions. . . . .

107 Id. at 53–55. 108 Eaton et al., supra note 16.


No one knows if a more robust and sophisticated inspection program could have detected [the problems that caused the Deepwater Horizon disaster] explosion. But there is broad agreement among safety experts that a massive overhaul is needed to create the kind of inspection program that can help avoid such disasters in the future.109

I will go out on a sturdy limb and predict that a significant expan-sion of BOEMRE’s budget is unlikely in the foreseeable future. My evi-dence for this prediction is fourfold: (1) the results of the 2010 election that granted conservative Republicans a decisive majority in the House of Representatives and a significantly stronger hand in the operation of the Senate; (2) congressional failure to pass legislation to strengthen the government’s ability to police offshore and authorize higher fund-ing levels, even in the wake of the worst environmental disaster in American history; (3) President Obama’s refusal thus far to recognize the crisis in performance that afflicts every agency responsible for pre-serving public health, safety, and the environment; and (4) the oil in-dustry’s remarkable refusal to acknowledge problems offshore.110 As-suming BOEMRE will be compelled to stumble along as best it can, adoption of a safety case regime is not likely to improve offshore safety and could actually prove counterproductive. In the aftermath of the Deepwater Horizon spill, the Wall Street Journal reported that investors around the world were anxiously de-manding evidence that “companies have robust spill contingency plans and clear guidelines for contractor selection and oversight. Investors also want to make sure the compensation and incentive packages for senior management include specific links to environmental health and

109 Id. 110 As mentioned earlier, the oil industry argues that BP is a rogue company and that it

has safety issues. John M. Broder, Oil Executives Break Ranks and Criticize BP at Congressional Hearing, N.Y. Times, June 16, 2010, at A20 (“The chairmen of four of the world’s largest oil companies broke their nearly two-month silence on the major spill in the Gulf of Mexico on Tuesday and publicly blamed BP for mishandling the well that caused the disaster.”). According to an October 15, 2010 Federal Register notice publishing a final rule that strengthens to a modest degree the existing requirement that all offshore facilities imple-ment “environmental management systems,” BOEMRE reported that “[m]ost comments expressed the view that the safety and environmental protection record of the offshore industry is excellent, and that imposing these new requirements is not justified.” Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Safety and Environmental Management Systems, 75 Fed. Reg. 63,610, 63,612 (Oct. 15, 2010) (to be codified at 30 C.F.R. pt. 250) (strengthening the existing system of regulation that requires all offshore facilities to institute an environmental management system).


safety targets.”111 These concerns reflect an astute fingering of two of the most important problems now undermining offshore safety: the di-vided authority exerted onsite by diverse corporate entities that have conflicting economic interests, and top management’s neglect of safety

wering incentives to come up with a yst

efinery that killed fifteen people in March 2005. The re-port

it for a broader audience. We are under no illusion that defi-

issues. Divided authority occurs because, unlike the vast majority of indus-trial sites, offshore facilities house workers employed by the company that officially owns the rig or platform, along with a variety of inde-pendent contractors. In unraveling the causes of the Deepwater Hori-zon disaster, investigators have been compelled to disentangle the cul-pability of Transocean, the owner of the rig that was leased by BP; Halliburton, the company that provided the cement used to suppress volatile gases in the well; and BP itself.112 Those reports indicate that BP wanted the drilling to be completed as quickly as possible, while its drilling contractors had minimal economic incentives to rush their work.113 Bickering over how to complete this work was one cause of the accident.114 The distinct corporate entities involved in onsite decision-making obviously require overpocr al clear chain of command. The problem of top management neglect is underscored by the conclusions of independent investigations into BP’s operations in North America.115 The common themes of these reports are best sum-marized by the findings of a review commission headed by former Sec-retary of State James A. Baker III that investigated the explosion at BP’s Texas City R

stated:

Although we necessarily direct our report to BP, we intend

111 Henshall, supra note 25. 112 See, e.g., Ben Casselman & Russell Gold, Unusual Decisions Set Stage for BP Disaster,

Wall St. J., May 27, 2010, at A1 (explaining the conflicting pressures and resulting disso-nance among BP and its contractors in the events leading up to the spill).

113 See id. 114 See, e.g., Douglas A. Blackmon et al., There Was ‘Nobody in Charge,’ After the Blast, Hori-

zon Was Hobbled by a Complex Chain of Command, Wall St. J., May 27, 2010, at A6 (reporting that the only person who noticed that the rig had not sent a “Mayday” call to onshore ex-ecutives and took upon herself the job of calling in the alarm was reprimanded for taking such action without the express authorization by other higher ranking officials who were milling around the deck); see also Casselman & Gold, supra note 112, at A1.

115 See, e.g., James A. Baker, III, The Report of the BP U.S. Refineries Independent Re-view Panel, at viii (2007) [hereinafter Baker Report], available at http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/SP/STAGING/local_assets/assets/pdfs/Baker _panel_report.pdf; Frontline: The Spill, supra note 15.


ciencies in process safety culture, management, or corporate oversight are limited to BP. . . . The passing of time without a process accident is not neces-sarily an indication that all is well and may contribute to a dangerous and growing sense of complacency. When people lose an appreciation of how their safety systems were intended to work, safety systems and controls can deteriorate, lessons can be forgotten, and hazards and deviations from safe oper-ating procedures can be accepted. Workers and supervisors can increasingly rely on how things were done before, rather than rely on sound engineering principles and other controls. People can forget to be afraid.116

Until and unless an independent regulatory agency is established, and given adequate resources and political support, safety cases should not come to America. In the interim, the best we can do is to turn to another well-established government tool—in a word, liability, imposed by high-profile lawsuits brought by Attorney General Eric Holder and pursued with the full resources of the Justice Department behind them. On December 15, 2010, Holder announced such a case against BP and Transocean seeking civil damages.117 Criminal charges are still under consideration and will pack an even more powerful deterrent than civil penalties in amounts easily absorbed by the mammoth company. These actions are a start, and the best hope of averting any more such trage-dies.

116 Baker Report, supra note 115, at i. 117 John Schwartz, U.S. Sues Company for Spill Damages, N.Y. Times, Dec. 16, 2010, at A30

(explaining that the complaint filed in the case does not specify the amount of damages the Justice Department is seeking, but the fines and penalties available under the law could total tens of billions of dollars).

SUPREME FORESIGHT: JUDICIAL TAKINGS, REGULATORY TAKINGS, AND THE PUBLIC

TRUST DOCTRINE

Julia K. Bramley*

Abstract: Before the Supreme Court issued its decision in Stop the Beach Renourishment, Inc., v. Florida Department of Environmental Protection, many expected the Court to finally speak about whether the public trust doc-trine qualifies as a background principle for modern takings law, and whether judicial decisions can constitute an unconstitutional taking. In deciding against private property rights and in favor of states’ rights to protect their beaches, however, the Supreme Court once again avoided finally deciding these issues. Nonetheless, had the Court instead adopted the expected “foreseeability” approach to determine whether there was a judicial taking, the result would likely have been the same. That is be-cause the public trust doctrine, which is a background principle of prop-erty law under Lucas v. South Carolina Coastal Council, allows Florida to re-claim its beaches after a destructive storm and does not unconstitutionally take any private property rights.

Introduction

Whether the public trust doctrine has any role in regulatory takings analysis is a long-standing debate that exploded on the Supreme Court in Nollan v. California Coastal Commission.1 Although Justice Scalia’s origi-nal draft of the majority opinion made no reference to the doctrine, Justice Brennan wrote a powerful dissent in which he directly incorpo-rated the public trust doctrine into the regulatory takings analysis.2 Jus-tice Blackmun feared that Justice Brennan’s bold assertions would pro-

* Managing Editor, Boston College Environmental Affairs Law Review, 2010–11. 1 483 U.S. 825, 846–48 (1987); see generally Memoranda from Ellen E. Deason, Law

Clerk, to Harry A. Blackmun, Supreme Court Justice, on dissenting opinion in Nollan v. Cal. Coastal Comm’n ( June 9–25, 1987) (on file with the Collections of the Manuscript Divi-sion, Library of Congress).

2 See generally William J. Brennan, Jr., Supreme Court Justice, First Draft of Dissenting Opinion in Nollan v. Cal. Coastal Comm’n ( June 3, 1987) (on file with the Collections of the Manuscript Division, Library of Congress); Antonin Scalia, Supreme Court Justice, First Draft of Majority Opinion in Nollan v. Cal. Coastal Comm’n ( June 1, 1987) (on file with the Collections of the Manuscript Division, Library of Congress).

445


voke Justice Scalia to retaliate directly by condemning and restricting the doctrine, and he was right.3 As an eleventh-hour compromise to save the public trust doctrine—facilitated by Justice Blackmun—Justice Brennan removed all reference to the public trust doctrine from his dis-sent and Justice Scalia did not limit the doctrine in the majority opin-ion.4 Consequently, the only public remnant of this battle is one cryptic reference beginning Justice Blackmun’s dissenting opinion stating that the Court’s opinion in no way implicated the public trust doctrine.5 Thus, the Supreme Court remained silent on the public trust doctrine’s role in regulatory takings analysis, and lower courts have been left to grapple with this divisive issue without guidance ever since.6 Over twenty years later, many thought this silence would be broken as the Supreme Court wrestled with establishing a third category of tak-ings that applies to the courts—judicial takings.7 The Court, in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection (Stop the Beach Renourishment II), rendered a decision that once again dodged the question of the public trust doctrine’s role in takings analy-sis, and offered a dramatically different approach to judicial takings than had ever been offered before.8 In that case, the Florida Supreme Court declared in Walton County v. Stop the Beach Renourishment, Inc. (Stop the Beach Renourishment I ) that property owners suffered no regu-latory taking of their beachfront property rights, an opinion that rested largely on the role of the public trust doctrine in the analysis.9 Affected property owners claimed that this decision was an unconstitutional ju-dicial taking,10 while Florida maintained that no taking occurred.11

3 See generally Deason, supra note 1 (indicating that Justice Scalia did retaliate against

the public trust doctrine references in subsequent draft opinions, prompting Justice Bren-nan to remove all public trust doctrine references from his opinion).

4 See generally id.; see also Nollan, 483 U.S. at 825–64 (absent reference to public trust doctrine).

5 Nollan, 483 U.S. at 865 (Blackmun, J., dissenting); see also Deason, supra note 1 (in-sisting it be clear that the majority did not implicate the public trust doctrine).

6 See infra Parts I–III. 7See D. Benjamin Barros, What’s at Stake in Stop the Beach Renourishment, Proper-

tyProf Blog ( July 1, 2009), http://lawprofessors.typepad.com/property/2009/07/whats-at-stake-in-stop-the-beach-renourishment.html.

8 130 S. Ct. 2592 (2010). 9 998 So. 2d 1102, 1114–15 (Fla. 2008), aff’d sub nom., Stop the Beach Renourishment II,

130 S. Ct. 2592 (2010). 10 Petition for Writ of Certiorari at i, Stop the Beach Renourishment II, 130 S. Ct. 2592

(No. 08-1151), 2009 WL 698518 (asking the Supreme Court to decide if there had been a judicial taking).

11 Brief of Respondent in Opposition to Petition for Writ of Certiorari at 10–11, Stop the Beach Renourishment II, 130 S. Ct. 2592 (No. 08-1151), 2009 WL 1206633.

2011] Stop the Beach Renourishment, Judicial Takings, & the Public Trust 447

Ironically, it was an opinion penned by Justice Scalia that provided the legal hook necessary to assert the public trust doctrine’s role in regula-tory takings analysis by establishing background principles of state law.12 If recognized as a legitimate Fifth Amendment protection, a judi-cial taking will likely require that a court decision be unforeseeable.13 The decision in Florida, however, was entirely foreseeable because the public trust doctrine is well-established as a background principle.14 Therefore, even if the Supreme Court had adopted a traditional ap-proach to judicial takings, and addressed the public trust’s role in the analysis, the state court decision would still not be found to affect a ju-dicial taking.15 Part I of this Note provides the necessary background on modern takings jurisprudence and judicial takings doctrine.16 Part II explains how the public trust doctrine has been incorporated into takings analy-sis.17 Part III elaborates on the Florida Supreme Court’s decision, and the United States Supreme Court’s surprising judgment on review.18 Then, Part IV demonstrates that, even if the United States Supreme Court had met expectations and considered the public trust doctrine under the foreseeability standard, the Florida Supreme Court would still not have affected a judicial taking.19

I. Takings Analysis Under the Fifth Amendment

The Takings Clause of the Fifth Amendment prevents the gov-ernment from taking “private property . . . for public use, without just compensation.”20 This prohibits government from “forcing some peo-ple alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”21 The most traditional ap-plication of the Fifth Amendment takings protection is when govern-ment uses its police power to obtain private property through eminent

12 See generally Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992) (introducing the

concept of categorical taking and background principles). 13 See Hughes v. Washington, 389 U.S. 290, 296 (1967) (Stewart, J., concurring). 14 See infra Part II.C.1. 15 See infra Part IV. 16 See infra Part I. 17 See infra Part II. 18 See infra Part III. 19 See infra Part IV. 20 U.S. Const. amend. V. 21 Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 123 (1978).


domain.22 As a basic attribute of sovereignty, all governments have the power to physically appropriate private property for a proper public purpose.23 Nevertheless, any exercise of eminent domain must be ac-companied by just compensation—the fair market value of the prop-erty—for the property owner.24 Thus, although the government can sue a private property owner to obtain the owner’s land, the govern-ment must pay for the land.25

The Fifth Amendment also protects private property owners when government action takes a property right without going through the eminent domain process— “a taking.”26 A property owner who believes he is a victim of a taking can sue the government to either stop the ac-tivity that results in the taking,27 or obtain just compensation for the lost property.28 A taking can either be a physical taking of property, which is actual physical occupation of land,29 or a regulatory taking of property, when a government regulation goes “too far” and deprives private property owners of reasonable use of their land.30 Some advocate that takings protections should also be extended to a third class of government ac-tivity— “judicial takings.”31 A majority of the modern Supreme Court has yet to reach consensus on the subject of applying takings analysis to

22 Zygmunt J.B. Plater et al., Environmental Law and Policy: Nature, Law, and

Society 1116 (3d ed. 2004). 23 Id. at 1114–16. “Proper public purpose” does not necessarily mean a government

use—government can obtain private property through eminent domain and then give it to another private owner if the overall purpose of the appropriation is for the public benefit. See, e.g., Kelo v. City of New London, Conn., 545 U.S. 469, 488–92 (2005) (approving gov-ernment appropriation of private land that is given to a private developer).

24 Plater, supra note 22, at 1115. 25 Id. 26 E.g., United States v. Causby, 328 U.S. 256, 261–62 (1946); see also Plater, supra note

22, at 1122–27. 27 See, e.g., Nollan v. Cal. Coastal Comm’n, 483 U.S. 825 (1987) (filing suit to enjoin

government action); Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922) (suing to strike down the government regulation that prohibited coal mining in certain areas).

28 See generally Causby, 328 U.S. at 256 (suing the government to receive just compensa-tion for the taking of land).

29 See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 441 (1982). 30 Pa. Coal, 260 U.S. at 415. 31 See generally David J. Bederman, The Curious Resurection of Custom: Beach Access and Judi-

cial Takings, 96 Colum. L. Rev. 1375 (1996) (advocating that expanding the doctrine of cus-tom in Oregon amounts to a judicial taking); Barton H. Thompson, Jr., Judicial Takings, 76 Va L. Rev. 1449 (1990) (explaining why takings protections should apply to courts as well as legislatures and executives); W. David Sarratt, Note, Judicial Takings and the Course Pursued, 90 Va. L. Rev. 1487 (2004) (arguing that, under the Erie doctrine, state judge-made law should be afforded the same takings protections as statutes and regulations).


state court decisions, and thus it is unclear what exactly would consti-tute a judicial taking.32

A. Physical Takings

A physical taking occurs when the government physically occupies or appropriates private property.33 Physical takings come in multiple forms, including: constructing an airport that leads to air traffic in pri-vate property’s airspace;34 the nuisance caused by the noise of a nearby airport;35 and the placement of a cable television wire on an apartment building.36 If the government’s occupation of the land could ripen into a prescriptive easement37 over time, then it is likely that the property owner has suffered a physical taking and deserves compensation.38 To obtain just compensation, a property owner must first establish the threshold issue that a physical invasion of property has occurred, and then proceed to establish the value of the harm caused by the physical occupation.39

B. Regulatory Takings

Not only can government take private property physically, but a government regulation that deprives a property owner of a property right can also amount to a taking.40 When an owner takes title to land, the owner also acquires certain rights inherent in property ownership, such as the right to exclude others from the property and the right to

32 See Stop the Beach Renourishment II, 130 S. Ct. 2592, 2597, 2601–02 (2010) (only a plu-

rality reached a decision on the judicial takings issue); Stevens v. City of Cannon Beach, 510 U.S. 1207, 1207 (1994) (Scalia, J., dissenting from denial of certiorari) (majority de-clined to address judicial takings question); Hughes v. Washington, 389 U.S. 290, 294 (1967) (Stewart, J., concurring) ( judicial takings central to concurring but not majority opinion).

33 See, e.g., Loretto, 458 U.S. at 437 (requiring a television cable box be put on apart-ment buildings was a physical taking); Thornburg v. Port of Portland, 376 P.2d 100, 110 (Or. 1962) (flying planes so close to private property as to oust the owners from quiet en-joyment of their land results in a physical taking).

34 Griggs v. Allegheny Cnty., 369 U.S. 84, 89–90 (1962); United States v. Causby, 328 U.S. 256, 261–62 (1946).

35 Thornburg, 376 P.2d at 100. 36 Loretto, 458 U.S. at 419. 37 Plater, supra note 22, at 197. An easement is a right to use land. Id. A prescriptive

easement is an easement acquired by using land without permission for certain length of time, usually five to ten years. Id.

38 Thornburg, 376 P.2d at 103. 39 Plater, supra note 22, at 1122. 40 Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 124 (1978).


quiet enjoyment of the property.41 The collection of rights that a prop-erty owner receives is known as the owner’s “bundle of rights.”42 If a regulation goes “too far” in restricting these rights, then the owner has suffered a regulatory taking and is entitled to just compensa-tion.43 To determine if there has been a regulatory taking, courts con-sider three factors: (1) the economic impact of the regulation; (2) the regulation’s interference with distinct investment-backed expectations; and (3) the character of the governmental action.44 These factors are from the Penn Central Transportation Co. v. City of New York case, and are collectively known as the Penn Central balancing test.45 However, courts do not always apply the Penn Central balancing test in a regulatory takings dispute.46 If a regulation eliminates all eco-nomically beneficial uses of the land, then the owner has suffered a categorical taking and is entitled to compensation without applying the multi-factor test.47 Consequently, if a property owner believes that a government regulation goes too far in limiting certain property rights, then the owner must either satisfy the Penn Central test, or demonstrate that the regulation leaves the owner with no economic use of the land.48

mental branches.”50 Thus, state court decisions that favor the state over

C. Judicial Takings: A New Category of Takings?

Although the question of what amounts to a physical or regula-tory taking can be muddled, it is firmly established that the Takings Clause limits the extent to which the legislature and executive agen-cies can infringe upon private property rights.49 Proponents of apply-ing takings analysis to judicial decisions, which are known as judicial takings, fear that without such protection “courts may be motivated to accomplish judicially what cannot be accomplished by other govern-

41 Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 831 (1987); Thornburg, 376 P.2d at 103.

Meltz et al., The Takings Issue: Constitutional Lim se Control and Environmental Regulation 26–27 (1999).

Plater, supra note 22, at 1154. , 1019 (1992).

would not be made

42 Nollan, 483 U.S. at 831; Robertits on Land U43 Penn Cent., 438 U.S. at 123–24. 44 Id. at 124. 45 See id.; 46 See Lucas v. S.C. Coastal Council, 505 U.S. 100347 See id. 48 See id. at 1019; Penn Cent., 438 U.S. at 123–24. 49 Thompson, supra note 31, at 1449. 50 Roderick E. Walston, The Constitution and Property: Due Process, Regulatory Takings, and

Judicial Takings, 2001 Utah L. Rev. 379, 437; see also Thompson, supra note 31, at 1502 (“[B]ecause . . . courts can make valuable changes in the law that


private property rights51 would be appealable on the grounds that the decision was an unconstitutional taking of property.52 Essentially, judi-cial changes in the law would be subject to Fifth Amendment protec-tions.53 Those opposed to the prospect of judicial takings protection fo-cus on the inherent differences between the judiciary and the other branches of government,54 the breach such a decision would cause in the United States’ federal structure,55 and the impracticality of such a doctrine.56

1. Law of Judicial Takings in Flux

Although a majority of the modern Supreme Court has not for-mally addressed the prospect of judicial takings,57 the issue is not with-out precedent. The Supreme Court grappled with whether to apply tak-ings protections to judicial decisions around the turn of the twentieth century with inconsistent results.58 Ultimately, the Court “finally and flatly reject[ed] the notion that judicial changes in the law could violate the takings provisions of the Constitution.”59 Although the issue was through other branches of government, it remains useful to consider whether such in-stan

e would pred See Thompson, supra note 31, at 1450.

ra note 31, at 1511.

pra note 31, at 1499. Furthermore, courts do not wield political pow

d be overseeing state courts and ruling on areas of traditional state

court issues and state courts would be ef-fect

, 2597, 2601–02 (2010) (only a plural-ity r

U.S. 226, 233–35 (1897), with Muhlker v. N.Y. & Harlem R.R., 197 U.S. 544

ces call for exempting the courts from the takings protections.”). 51 See Hughes v. Washington, 389 U.S. 290, 296–97 (1967) (Stewart, J., concurring).

Because takings decisions involve government appropriations of private property, and property law is traditionally an area of state concern, a judicial takings doctrin

ominantly affect state court decisions.52 Thompson, sup53 See id. at 1463. 54 Courts do not make the law but rather interpret the law. Walston, supra note 50, at

437–38. Additionally, courts do not have the power of the purse to compensate for judicial takings. Thompson, su

er. See id. at 1506. 55 Federal courts woul concern. Id. at 1509. 56 Federal courts would be flooded with state

ively stifled from doing their jobs. Id. at 1511. 57 Stop the Beach Renourishment II, 130 S. Ct. 2592eached a decision on the judicial takings issue). 58 See Thompson, supra note 31, at 1463–65. Compare Chi., Burlington & Quincy R.R. v.

City of Chi., 166 , 568 (1905). 59 Thompson, supra note 31, at 1465. In 1930, Justice Brandeis emphasized that

changes in the law did not present constitutional questions. Brinkerhoff-Faris Trust & Sav. Co. v. Hill, 281 U.S. 673, 680 (1930). In a subsequent case, Justice Cardozo stated that the Constitution did not prohibit a court from retroactively applying a change in either com-mon law or the interpretation of a statute. Great N. Ry. v. Sunburst Oil & Ref. Co., 287 U.S. 358, 364–65 (1932). These statements directly contradict Justice Scalia’s most recent statement on the subject that “[o]ur precedents provide no support for the proposition


seemingly dead in the 1930s,60 the judicial takings movement was re-vived in 1967 by Justice Stewart.61 In his concurring opinion in Hughes v. Washington, Justice Stewart explained, “a State cannot be permitted to defeat the constitutional prohibition against taking property without due process of law by the simple device of asserting retroactively that the property it has taken never existed at all.”62

2. Modern Revival of the Judicial Takings Question

In the wake of Justice Stewart’s concurrence in Hughes, property holders tried to bring judicial takings claims to the Supreme Court, a number of state courts declined to overturn precedent for fear that to do so would be unconstitutional, and some lower federal courts held state court decisions to be unconstitutional takings.63 The Supreme Court, however, avoided readdressing the judicial takings question for over forty years, until it granted certiorari in Stop the Beach Renourishment II.64 In the interim, the entire bench did not remain silent on the is-sue.65 Dissenting from the denial of certiorari in Stevens v. City of Cannon Beach, Justice Scalia argued, “[n]o more by judicial decree than by legis-lative fiat may a State transform private property into public property without compensation.”66 Further, Justice Scalia stated plainly his belief that a judicial decision that is not grounded in a state’s prior common law amounts to an unconstitutional taking.67 In Stop the Beach Renourishment II, a four-justice plurality led by Jus-tice Scalia stated clearly that courts “[a]ffect a taking if they recharac-terize as public property what was previously private property.”68 In so doing, however, these justices flatly rejected the standard laid out in Hughes, stating that “[w]hat counts is not whether there is precedent

that takings affected by the judicial branch are entitled to special treatment” because they clearly state that the judiciary cannot affect a taking. Stop the Beach Renourishment II, 130 S. Ct. at 2601; see Thompson, supra note 31, at 1465.

60 Thompson, supra note 31, at 1468. 61 See Hughes v. Washington, 389 U.S. 290, 296–97 (1967) (Stewart, J., concurring). 62 Id. 63 Thompson, supra note 31, at 1469–71. 64 See 130 S. Ct. at 2601. 65 See generally Stevens v. City of Cannon Beach, 510 U.S. 1207 (1994) (Scalia, J., dis-

senting from denial of certiorari). 66 Id. at 1212. 67 Id. 68 Stop the Beach Renourishment II, 130 S. Ct. at 2601. The remaining justices declined to

reach a decision on the issue. Id. at 2613, 2618.


for the allegedly confiscatory decision,” but whether the court “declares that what was once an established right of private property no longer exists.”69 This standard is a sharp deviation from what was previously thought of as a judicial taking,70 has no precedential value,71 and could be difficult to apply.72 In the end, it is likely that applying the “estab-lished property right” standard will require employing tests similar to those advocated in Hughes, even though the Hughes standard was seem-

gly

in rejected.73 While the issue of judicial takings has been revived, what consti-tutes a judicial taking is still unclear.74 As of now, the clearest articula-tion of a judicial taking is paraphrased from Justice Stewart’s Hughes concurrence: “the [State] Supreme Court’s decision must be granted deference as long as it ‘conforms to reasonable expectations,’ but ‘to the extent that it constitutes a sudden change in state law, unpredict-able in terms of the relevant precedents, no such deference would be appropriate.’”75 The crux of judicial takings under this test rests on whether or not the state court decision was foreseeable.76 This standard was rejected, however, in Stop the Beach Renourishment II, where the al-ternative “established property right” test was proposed.77 Currently neither standard has precedential value, and it is unclear whether ei-ther will be adopted in the future.78 It is possible, though, that deciding

le L.J. Online 247,

10) (de-clin

lying that, afte

akings claim will fail if the contested decision is rea-sona

supra note 31, at 1522–41 (addressing the problems with defining a judi

hes dec

ey, supra note 70, at 255; Walston, supra note 50, at 432; Sarratt, supra note

0 S. Ct. 2592, 2602 (2010).

69 Id. at 2602, 2610. 70 See Timothy M. Mulvaney, The New Judicial Takings Construct, 120 Ya250–51 (2011), http://www.yalelawjournal.org/images/pdfs/946.pdf.

71 Sagarin v. City of Bloomington, 932 N.E.2d. 739, 744 n.2 (Ind. Ct. App. 20ing to follow plurality decision because it is “without precedential authority”). 72 See Mulvaney, supra note 70, at 256 (stating that the standard in Stop the Beach Renour-

ishment “falls prey to . . . malleability: it offers scant directives to future courts required to determine the bounds of ‘established’ property rights”); Daniel S. Siegel, Why We Will Prob-ably Never See A Judicial Takings Doctrine, 35 Vt. L. Rev. 459, 471–72 (2010) (imp

r Stop the Beach Renourishment, the judicial takings test is extremely unclear). 73 See D. Benjamin Barros, The Complexities of Judicial Takings, 45 U. Rich. L. Rev. 903,

934 (2011) (stating that a judicial tbly based on prior precedent). 74 See Thompson,cial taking). 75 Walston, supra note 50, at 432 (quoting Hughes v. Washington, 389 U.S. 290, 295–96

(1967) (Stewart, J., concurring)); see Barros, supra note 73, at 911 (stating that the Hugision is the clearest articulation of a judicial taking); Sarratt, supra note 31, at 1533.

76 See Mulvan 31, at 1533. 77 Stop the Beach Renourishment II, 1378 See Siegel, supra note 72, at 474.


the “establish ng the fore-

ood, that is, le

had full title to the property interest allegedly taken.89 A regulation de-priving the owner of that property interest does not take anything that

ed property right” standard will require applyiseeability standard already outlined in Hughes.79

D. Categorical Takings and Background Principles

Determining whether a regulation results in a categorical taking requires an analysis of background principles of law, one of which is the public trust doctrine.80 The Penn Central balancing test was the standard applied in all regulatory takings cases until 1992.81 Then, in Lucas v. South Carolina Coastal Council, penned by Justice Scalia, the Supreme Court established the categorical takings standard.82 In that case, a coastal landowner in South Carolina intended to develop his land, but the South Carolina Coastal Council subsequently enacted a regulation that prevented any development of the land.83 In deciding whether this amounted to a regulatory taking, the Supreme Court stated that an “owner of real property [who] has been called upon to sacrifice all economically beneficial uses in the name of the common gto ave his property economically idle, he has suffered a taking.”84 In such cases, the court can determine that a per se taking has occurred without needing to apply the three-part Penn Central test.85 This test is not absolute; courts must first engage in a threshold inquiry as to whether the proscribed use interests were initially a part of the owner’s title.86 The Court recognized that certain background prin-ciples of the state’s laws of property or nuisance are inherent in the title to land.87 A law or regulation that does “no more than duplicate the result that could have been achieved in the courts,” because of inher-ent background principles, does not constitute a taking and the prop-erty owner need not be compensated.88 Thus, if a background princi-ple of state law encumbers an owner’s property, then the owner never

l Council, 505 U.S. 1003, 1015, 1019 (1992); Penn Cent. Tra Y., 438 U.S. 104, 124 (1978).

015, 1019. 7.

029.

79 See generally Barros, supra note 73. 80 See infra Part II. 81 See Lucas v. S.C. Coasta

nsp. Co. v. City of N.82 505 U.S. at 183 Id. at 1006–084 Id. at 1019. 85 Id. at 1015. 86 Id. at 1027. 87 Id. at 188 Lucas, 505 U.S. at 1029. 89 See id.


the owner ever had to lose.90 The Court, however, left the meaning of “background principles of the State’s law of property” open to interpre-

tio

octrine or law may interfere with investment-backed ex-pectations.99

ta n.91 Nevertheless, a series of decisions established several criteria to guide lower courts in determining what constitutes a background prin-ciple: (1) it must be a state, not federal, law or doctrine;92 (2) the law or doctrine “cannot be newly legislated or decreed”;93 (3) the restriction must no more than duplicate what could have been achieved in the courts;94 (4) the restriction must apply to all landowners;95 and (5) the law or doctrine must not vacillate or have an ambiguous application.96 These five factors are collectively referred to as the Lucas factors. When these factors are satisfied, then a law or doctrine inheres in the title of any property owner who holds that property subject to that law or doc-trine—that is to say, the property owner never had full title to that property to begin with.97 Further, background principles also have a role in the Penn Central balancing test to determine whether there has been a regulatory taking when public resources are at issue.98 This is because the d

II. The Public Trust Doctrine as a Background Principle

Since the Supreme Court established the categorical takings stan-dard and the idea of background principles, legal scholars have argued that the public trust doctrine qualifies as a background principle.100

ical

Taki d the Public Trust Doctrine, 32 B.C. Envtl. Aff. L. Rev. 421, 429 (2005). s, 505 U.S. at 1029 (leaving open what constitutes a background principle).

n Beach, 510 U.S. 1207, 1212 n.4 (1994) (Scalia, J., dis-sent

on of Lucas on the Evolution of Takings Law and Sout

note 90, at 429.

(2002); Timothy J. Dowling, On History,

90 Zachary C. Kleinsasser, Note, Public and Private Property Rights: Regulatory and Physngs an91 Luca92 Id. 93 Id. 94 Id. 95 Palazzolo v. Rhode Island, 533 U.S. 606, 630 (2001). 96 See Stevens v. City of Cannoing from denial of certiorari); Kleinsasser, supra note 90, at 430–32. 97 Lucas, 505 U.S. at 1027–30. 98 See Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538 (2005); Jennifer Dick & Andrew

Chandler, Shifting Sands: The Implementatih Carolina’s Application of the Lucas Rule, 37 Real Prop. Prob. & Tr. J. 637, 685–86

(2003); Kleinsasser, supra99 See Lingle, 544 U.S. at 538; Dick & Chandler, supra note 98, at 685–86; Kleinsasser,

supra note 90, at 430. 100 See, e.g., David I. Callies & J. David Breemer, Selected Legal and Policy Trends in Takings

Law: Background Principles, Custom and Public Trust “Exceptions” and the (Mis)Use of Investment-Backed Expectations, 36 Val. U. L. Rev. 339, 361


The Supreme Court has not addressed the role of the public trust doc-trine in regulatory takings analysis,101 but many lower courts agree that the public trust doctrine is a background principle.102

state’s obliga-on

A. The Public Trust Doctrine

Based on ideas originating with the Roman Emperor Justinian,103 the Supreme Court identified the public trust doctrine as substantive state common law early in the Nation’s history.104 The public trust doc-trine vests states with the duty to hold public resources in trust for the people of the state.105 In Illinois Central Railroad v. Illinois, the Court ad-vanced the public trust doctrine by recognizing that the doctrine im-poses certain constraints on state action.106 A State cannot relinquish the trust simply by transferring title to public trust lands because the state’s obligations under the trust are analogous to the ti s to exercise police powers to preserve the peace.107 By the end of the twentieth century, the doctrine had expanded from its limited application to navigable and tidal waters to include lakes, tributaries, riparian banks, aquifers, marshes, wetlands, springs, groundwater,108 beach access,109 trees and forests,110 parks,111 wild-life,112 fossil beds,113 and entire ecosystems.114 Further, the public trust

Tak

U.S. 825, 825–64 (1987) (omitting, inten-tion octrine from published opinion); Brennan, supra note 2, at 1–14 (rel

he law of n

and rivers and bays and arm

05); Kleinsasser, supra note 90, at 424. U.S. 387, 453–55 (1892) (stating that Illinois could not transfer a portion of

Lak

1984).

63 N.E.2d 11, 15–16 (Ill. 1970). 519, 529 (1896), overruled on other grounds by

Hug

ings Jurisprudence, and Palazzolo: A Reply to James Burling, 30 B.C. Envtl. Aff. L. Rev. 65, 90–91 (2003); Kleinsasser, supra note 90, at 437.

101 See generally Stop the Beach Renourishment II, 130 S. Ct. 2592, 2597 (2010) (referencing the public trust doctrine and background principles separately, but not in relation to one another); Nollan v. Cal. Coastal Comm’n, 483

ally, the public trust dying substantially on public trust doctrine). 102 See infra Part II.C. 103 Nat’l Audubon Soc’y v. Superior Court, 658 P.2d 709, 718 (Cal. 1983) (“‘By tature, these things are common to mankind: the air, running water, the sea, and con-

sequently the shores of the sea.’” (quoting Institutes of Emperor Justinian, 2.1.1)). 104 Martin v. Waddell, 41 U.S. 367, 413 (1842) (“[T]he shores,s of the sea, and the land under them, [were to be] held as a public trust for the bene-

fit of the whole community . . . .”); see Brennan, supra note 2, at 5. 105 America’s Changing Coasts: Private Rights and Public Trust 184–85 (Diana

M. Whitelaw & Gerald R. Visgilio eds., 20106 146

e Michigan to a railroad company). 107 Id. 108 In re Water Use Permit Applications, 9 P.3d 409, 445–47 (Haw. 2000). 109 See, e.g., Matthews v. Bay Head Improvement Ass’n, 471 A.2d 355, 369 (N.J.110 See, e.g., Sierra Club v. Dep’t of the Interior, 376 F. Supp. 90, 95–96 (D. Cal. 1974). 111 See, e.g., Paepcke v. Pub. Bldg. Comm’n, 2112 See, e.g., Geer v. Connecticut, 161 U.S.hes v. Oklahoma, 441 U.S. 322, 325 (1979).


doctrine has been codified by many states, either in their constitutions, via statute, or both.115 In sum, the public trust doctrine is a state com-mon law doctrine, which is also expressed in the constitutions and stat-

tes

protected by the public trust doctrine expand to meet those needs.121

. T

cess,122 water use,123 navigable waters,124 tidelands,125 forests,126 and

u of many states.116 The increasingly expansive reach of the public trust doctrine is a function of evolving communal obligations— “[t]he public trust doc-trine, like all common law principles, should not be considered fixed or static, but should be molded and extended to meet changing condi-tions and needs of the public it was created to benefit.”117 The fusion of the public trust doctrine and evolving communal values necessarily im-plicates the relationship between the public and the public’s use and enjoyment of land.118 Thus, various state legislatures and state agencies have relied on public trust obligations to justify limiting the use and development of lands encumbered by the public trust doctrine.119 As one observer noted, “[a]s the public trust doctrine has gradually ex-panded to ‘meet changing conditions and needs of the public,’ so have land use restrictions gradually grown to encompass historically consis-tent, but nevertheless novel, natural resources.”120 As the needs and values of communities change, the resources

B he Public Trust Doctrine’s Historical Role in Regulatory Takings Analysis

In both public court decisions and unpublicized arguments, judges and justices alike have endorsed the public trust doctrine’s role in takings analysis. Courts have relied on public trust principles to re-strict private property rights in a variety of settings, including beach ac-

generally Robin Kundis Craig, A Comparative Guide to the Eastern Public Trust Doc-trine tates, Property Rights, and State Summaries, 16 Penn St. Envtl. L. Rev. 1 (2

erally id. 7, 54 (N.J.

197

uoting Neptune City, 294 A.2d at 54).

age5, 369 (N.J. 1984).

113 See Plater, supra note 22, at 1091–98. 114 See, e.g., Nat’l Audubon Soc’y v. Superior Court, 658 P.2d 709, 732 (Cal. 1983). 115 See s: Classifications of S007). 116 See gen117 Borough of Neptune City v. Borough of Avon-by-the-Sea, 294 A.2d 4

2). 118 Kleinsasser, supra note 90, at 426–27; see Brennan, supra note 2, at 6–10. 119 Dist. of Columbia v. Air Fla., Inc., 750 F.2d 1077, 1083 (D.C. Cir. 1984). 120 Kleinsasser, supra note 90, at 427 (q121 See id.; see also Jack H. Archer et al., The Public Trust Doctrine and the Man-ment of America’s Coasts 4 (1994). 122 See, e.g., Matthews v. Bay Head Improvement Ass’n, 471 A.2d 35123 Nat’l Audubon Soc’y v. Superior Court, 658 P.2d 709, 721 (Cal. 1983). 124 See, e.g., Ill. Cent. R.R. v. Illinois, 146 U.S. 387, 453–55 (1892).


subaqueous oil resources.127 The Supreme Court even acknowledged that the public trust doctrine encumbers private title to land.128 In Phil-lips Petroleum Co. v. Mississippi, the Court held that Mississippi had ac-quired title to all lands beneath waters subject to tides, not just naviga-ble waters.129 In writing for the majority, Justice White recognized that “[s]tates have the authority to . . . recognize private rights in [public trust] lands as they see fit.”130 Thus, the Court made clear that the pub-lic trust doctrine reaches beyond the traditional navigable waters boundary,131 and that states have a claim to privately owned property that is encumbered by the public trust doctrine.132 The Supreme Court has also directly grappled with the public trust doctrine’s role in regulatory takings.133 Justice Brennan’s first draft of his dissent in Nollan v. California Coastal Commission explicitly endorsed the limits that the public trust doctrine imposes on a property owner’s title to land.134 Justice Brennan began by explaining that the relevant California statutes merely duplicate what could have been accom-plished under the public trust doctrine.135 Justice Brennan pointed out that:

States have come to recognize the need to undertake regula-tion in order to preserve the character of, and public access to, their coastal areas . . . [and] States have come to acknowl-edge that the public’s use of public trust property encom-passes more than the traditional purposes of commerce, navi-gation, and fishing . . . [s]uch regulation is now more appropriately regarded as an employment of the police power for this particular purpose.136

Justice Brennan also explained that the California Constitution adopted the public trust doctrine explicitly137 and that this provision is “suffi-ciently flexible to encompass changing public needs.”138

125 See, e.g., City of Berkeley v. Superior Court, 606 P.2d 362, 367 (Cal. 1980).

illips Petroleum Co. v. Mississippi, 484 U.S. 469, 484–85 (1988).

eason, supra note 1, at 1–7. nan, supra note 2, at 1–14.

126 Sierra Club v. Dep’t of the Interior, 376 F. Supp. 90, 95–96 (D. Cal. 1974). 127 See, e.g., Ph128 Id. at 475. 129 Id. at 476. 130 Id. at 475. 131 Id. at 476. 132 Id. at 475. 133 Brennan, supra note 2, at 1–14; D134 Bren135 Id. 136 Id. at 6–10. 137 Id. at 10–11.


Justice Brennan concluded that the bundle of rights enjoyed by coastal property owners is subject to and subservient to the public trust doctrine; California property owners did not have “the right to use their property in any way that might impede public access to the beach.”139 Thus, Justice Brennan’s entire argument that there was no unconstitutional action in Nollan was premised upon establishing that the public trust doctrine was inherent in the title of coastal property owners and the owners’ rights being “qualified” by the public trust doc-trine.140 In other words, the public trust doctrine was relevant to the regulatory takings analysis.141

C. Lower Courts Find the Public Trust Doctrine to Be a Background Principle

The categorical takings standard, limited by background principles such as the public trust doctrine, dramatically altered the takings land-scape by giving both plaintiffs and defendants two additional factors to consider in a takings dispute.142 Plaintiffs could circumvent the Penn Central balancing test by demonstrating a complete loss of economically beneficial use of the property.143 Defendants could defend against a takings claim by demonstrating that the owner’s title was burdened by a background principle so the owner never held the property claimed to have been lost.144 Lower courts have found that the public trust doc-trine is a background principle in both the categorical and regulatory taking scenarios.

1. Public Trust Doctrine as a Background Principle

Several courts have explicitly held that the public trust doctrine is a background principle in categorical takings.145 The Ninth Circuit Court of Appeals, in Esplanade Properties, LLC v. City of Seattle, stated un-ambiguously that Lucas v. South Carolina Coastal Council “effectively rec-ognized the public trust doctrine” as a background principle.146 The Ninth Circuit then relied on the doctrine to find that restricting devel-

138 Id. at 7, 9–11. 139 Id. at 14. 140 Brennan, supra note 2, at 14. 141 Id. at 1–14. 142 See Walston, supra note 50, at 400; see also Lucas v. S.C. Coastal Council, 505 U.S.

1003, 1027–28 (1992); Meltz, supra note 42, at 29. 143 See Lucas, 505 U.S. at 1019. 144 See id. at 1027–29. 145 Kleinsasser, supra note 90, at 437–42. 146 307 F.3d 978, 986 (9th Cir. 2002).


opment of shoreline property near a public park was not a categorical taking, even though there was no other beneficial use of the property, because the development plans “never constituted a legally permissible

lic trust doctrine is a ack

use” of the property.147 Similarly, in McQueen v. South Carolina Coastal Council, the South Carolina Supreme Court held that compensation for a landowner who had lost all economically beneficial use of his property was unneces-sary.148 The property in question was “public trust property subject to the control of the State,” and therefore no taking had occurred when the landowner was denied a permit to do what he could not otherwise have done because of the public trust doctrine.149 Thus, courts at the state and federal level have found that the pubb ground principle under the Lucas factors.150 Beyond categorical takings, lower courts have also found the pub-lic trust doctrine relevant to the Penn Central balancing test.151 In Palaz-zolo v. Rhode Island, on remand from the Supreme Court, a Rhode Is-land court explicitly declared that the public trust doctrine is a background principle that “substantially impacts Plaintiff’s title to the parcel in question and has a direct relationship to Plaintiff’s reasonable investment-backed expectations.”152 Similarly, New Jersey recognized that a landowner’s rights to trust property were limited by the public trust doctrine.153 Because “the sovereign never waives its right to regu-late the use of public trust property,” the landowner “had notice in ad-vance of [his] investment decision” that government regulations had been, or would be, enacted on the property.154 The public trust doc-

147 Id. at 987. 148 580 S.E.2d 116, 119–20 (S.C. 2003). 149 Id. at 120; see also Hilton Head Plantation Prop. Owners’ Ass’n v. Donald, 651 S.E.2d

614, 617 (S.C. Ct. App. 2007) (reaffirming that the public trust doctrine is a background principle and stating that land owners cannot claim title to land up to the water’s edge when they artificially caused the land to expand).

150 See, e.g., Esplanade, 307 F.3d at 985–87; McQueen, 580 S.E.2d at 119–20. 151 Kleinsasser, supra note 90, at 429–30. 152 No. WM 88-0297, 2005 WL 1645974, at *7 (R.I. Super. Ct. July 5, 2005); see also R.W.

Docks & Slips v. State, 628 N.W.2d 781, 790 (Wis. 2001) (citing the public trust doctrine as weighing against a finding that the government action affected a compensable regulatory taking).

153 Karam v. State, 705 A.2d 1221, 1226–28 (N.J. Super. Ct. 1998). 154 Id. at 1228; see also Rith Energy, Inc. v. United States, 44 Fed. Cl. 108, 113–15

(1999); In re Water Use Permit Applications, 9 P.3d 409, 494 (Haw. 2000); Harrison v. Va. Marine Res. Comm’n, No. CL06-1664, 2007 WL 6013038, at *13 (Va. Cir. Ct. Mar. 22, 2007) (stating that the public trust doctrine must be considered as a “backdrop” to statu-tory law when considering whether to issue permits for development over submerged lands), rev’d on other grounds, Boone v. Harrison, 660 S.E.2d 704 (Va. Ct. App. 2008).


trine also restricts the rights of lakeshore property owners, thus confer-ring a right of public access across lakeshore property.155 In 2009, the Supreme Court of Florida, in Stop the Beach Renourishment I, Inc., recog-nized the public trust doctrine as a background principle in ruling that a Florida statute did not affect a regulatory taking of property rights of coastal land owners.156

E

epends on the property laws in a state hic

always been implied under ck

2. xceptions to the Public Trust Doctrine as a Background Principle

The public trust doctrine has not achieved total recognition as a background principle.157 In certain fact-specific situations, courts have refused to qualify the public trust doctrine as a background principle: (1) when a well-settled state regulation is directly contrary to the doc-trine; (2) when a regulation codifying the doctrine limits use of prop-erty beyond the doctrine’s widely accepted boundaries;158 and (3) when a case in federal court dw h has not spoken on the issue.159 The first scenario is illustrated by Tulare Lake Basin Water Storage District v. United States.160 The United States Court of Federal Claims did not recognize the public trust doctrine as a background principle be-cause California had explicitly authorized the unrestricted use of water that the public trust doctrine would have restricted.161 The court would “not be making explicit that which had ba ground principles of property law.”162 Similarly, illustrating the second scenario, the Supreme Court of New Hampshire would not recognize the public trust doctrine as a background principle when a statute codifying the public trust doctrine was inconsistent with New Hampshire’s traditional understanding of the doctrine.163 In Purdie v. Attorney General, the statute passed by the state legislature “went beyond the[] common law limits by extending

155 In re Sanders Beach, 147 P.3d 75, 85–86 (Idaho 2006); Glass v. Goeckel, 703 N.W.2d

58, 73 (Mich. 2005). 156 See Stop the Beach Renourishment I, 998 So. 2d 1102, 1114–15 (Fla. 2008), aff’d sub

nom., Stop the Beach Renourishment II, 130 S. Ct. 2592 (2010). 157 See Severance v. Patterson, 566 F.3d 490, 502–03 (5th Cir. 2009); Tulare Lake Basin

Water Storage Dist. v. United States, 49 Fed. Cl. 313, 324 (2001); Purdie v. Att’y Gen., 732 A.2d 442, 447 (N.H. 1999).

158 Kleinsasser, supra note 90, at 442. 159 Severance, 566 F.3d at 502–03. 160 49 Fed. Cl. at 324. 161 Id. at 323–24. 162 Id. at 323. 163 See Purdie v. Att’y Gen., 732 A.2d 442, 447 (N.H. 1999).


public trust rights to the highest high water mark” when traditional public trust rights only established “public ownership of the shorelands to the mean high water mark.”164 The doctrine, as codified by the legis-lature, would not have achieved the same results that could have been

hi

recognizing the public trust doctrine as a back-ground principle.170

III. Stop the Beac he Question of a

ac eved in the courts.165 Finally, illustrating the third scenario, the Fifth Circuit declined to decide whether the public trust doctrine was a background principle of Texas’ property law because Texas had not spoken on the issue.166 In Severance v. Patterson, to determine whether there was an unconstitu-tional taking of property rights when the Texas legislature declared a “rolling easement”167 along the Gulf Coast, the Fifth Circuit asked the Texas Supreme Court whether the easement was based on the public trust doctrine or was created by the statute.168 Thus, this case does not actually suggest that the public trust doctrine is not a background prin-ciple, but rather that in order to be declared as such the relevant state court precedent must be clear.169 In sum, the three instances in which the public trust doctrine was not recognized as a background principle are factually unique situations, and clear anomalies to the overwhelm-ing trend of courts

h Renourishment II Raises tJudicial Taking in Florida

The Supreme Court of the United States granted certiorari in Stop the Beach Renourishment II to decide whether the Florida Supreme Court’s decision resulted in a judicial taking.171 The Florida Supreme Court declared a statute to be so grounded in the public trust doctrine that the property rights limited by the statute were never present in the owner’s title to begin with.172 The property owners appealed the deci-

d beach up to the veg asement shifts as the vegetation line shifts. Id.

t 502–04.

2d 1102, 1114–15 (Fla. 2008), aff’d sub nom

164 Id. 165 See id. 166 Severance v. Patterson, 566 F.3d 490, 502–03 (5th Cir. 2009). 167 A rolling easement is an easement that changes as the vegetation line on the coast

changes. Id. at 493. The public has a right to use the wet and dry sanetation line, and this e

168 See id. a169 See id. 170 Kleinsasser, supra note 90, at 444. 171 Stop the Beach Renourishment II, 130 S. Ct. 2592, 2600–01 (2010). 172 See Stop the Beach Renourishment I, 998 So. ., Stop the Beach Renourishment, 130 S. Ct. 2592.


sion claiming that it was a judicial taking.173 Before one can understand the nuances of the Florida court’s decision, however, it is necessary to establish a foundation in Florida’s coastal property law.

A. A Brief Survey of Florida State Land Law

. R

t to use the water, and the

accretion or reliction be-

littoral owner’s land through erosion182 is lost from the land owner’s

1 ights to Land Bordering Water: Littoral Rights

In general, property owners in the eastern United States, who own land that touches a body of water, including rivers, lakes, and the ocean, own title to the land with certain rights commonly referred to as riparian174 or littoral rights.175 Common littoral rights include the right to have water pass in its natural state, the righright to an unobstructed view of the water.176 In Florida, coastal owners “hold several special or exclusive com-mon law littoral rights: (1) the right to have access to the water; (2) the right to reasonably use the water; (3) the right to accretion and relic-tion; and (4) the right to an unobstructed view of the water.”177 Accre-tion occurs when the littoral owner’s land is increased “‘by the gradual deposit, by water, of solid material, whether mud, sand, or sediment, so as to cause that to become dry land which was before covered by wa-ter.’”178 Reliction, on the other hand, refers to land that becomes dry land due to the removal of water instead of the build up of soil.179 In Florida, any new dry land created because of comes part of the littoral land owner’s title.180 The opposite is also true, however.181 Any land that is lost from a

173 Petition for Writ of Certiorari, supra note 10, at *24. 174 John W. Johnson, United States Water Law: An Introduction 35 (2009). Ri-

parian rights are traditionally used in the eastern states, whereas a different system of “ap-por

ners of land along rivers or streams, whereas “litt an ocean, sea, or lake. Stop the Beach Renourishment I, 99 rt refers to these rights as litto-ral r

supra note 174, at 36.

nson, supra note 174, at 43 (citation omitted).

tioned rights” is used in the western states. Id. Every state’s water law is different, how-ever, and many states now combine riparian and apportionment methods. Id. Currently, approximately twenty-nine states use a predominantly riparian method. Id. at 35–36.

175 Id. at 36. Although the terms are often used interchangeably, the Florida Supreme Court asserts that “riparian owners” are ow

oral owner” applies to land abutting8 So. 2d at 1105 n.3. Because the Florida Supreme Couights, this Note will also use that term. 176 Johnson, 177 Stop the Beach Renourishment I, 998 So. 2d at 1111. 178 Joh179 Id. at 43. 180 Stop the Beach Renourishment I, 998 So. 2d at 1113–14. 181 Id.


title. Land lost from the littoral owner’s title, because it is no longer dry land, becomes subject to the public trust doctrine and the protections of the state.183 The distinctive feature of land that is gained or lost from the coast due to accretion, reliction, or erosion, is the imperceptible change that occurs over a long period of time.184 The boundary between the littoral owner’s land and the land sub-ject to the public trust doctrine, is the mean high water line (MHWL).185 Because the MHWL regularly changes, due to the ebbs and flows and the tide, this boundary is known as a dynamic bound-ary.186 Thus, as more dry land is created due to accretion and reliction, the MHWL moves towards the water creating more land for the littoral owner.187 Correspondingly, as dry land is lost due to the process of ero-sion, the MHWL moves towards the littoral owner’s property, reducting the littoral owner’s land.188

However, not all landscape changes on the coasts happen imper-ceptibly over a long span of time.189 Avulsion is “the sudden or percep-tible loss of or addition to land by the action of the water or a sudden change in the bed of a lake or the course of a stream.”190 If the change in the land is due to avulsion, and not accretion, reliction, or erosion, then the MHWL does not change regardless of the different coast-line.191 Thus, if more land is created suddenly due to avulsion, and not gradually due to accretion or reliction, then the title to the new land lies with the state.192 Likewise, if land is lost due to sudden avulsion, instead of gradual erosion, then the land lost is the state’s land and not the littoral owner’s land.193 In addition, when land is lost due to avul-sion, the affected property owners have the right to reclaim the lost land within a reasonable time.194

182 Erosion is the “wearing away of something by action of the elements; esp., the

gradual eating away of soil by the operation of currents or tides.” Black’s Law Diction-ary 621 (9th ed. 2009).

183 The public trust doctrine encumbers all lands that lie beneath navigable waters. See supra notes 103–116 and accompanying text.

184 Stop the Beach Renourishment I, 998 So. 2d at 1113–14. 185 The MHWL is determined based on where the average high-tide line sits over a

nineteen-year period. Fla. Stat. Ann. § 177.27(14) (West 2000). 186 Stop the Beach Renourishment I, 998 So. 2d at 1112. 187 See id. at 1113–14. 188 See id. 189 Id. at 1113. 190 Id. 191 Id. at 1114. 192 See Stop the Beach Renourishment I, 998 So. 2d at 1114. 193 See id. 194 Id. at 1117.


2. Florida’s Beach and Shore Preservation Act

In 1961, Florida’s legislature adopted a comprehensive statutory scheme to protect the coasts, which included the Beach and Shore Preservation Act (BSPA) to address the problems associated with ero-sion.195 The statute provides a mechanism for Florida to restore and renourish critically eroded beaches.196 The Florida Department of En-vironmental Protection is charged with “determin[ing] ‘those beaches which are critically eroded and in need of restoration’” and “‘au-thoriz[ing] appropriations to pay up to 75 percent of the actual costs for restoring and renourishing a critically eroded beach.’”197 Under the statute, when a local government applies for funding, a survey of the shoreline is conducted to determine the MHWL for the area.198 After the MHWL is established, the erosion control line (ECL) is determined, and this represents the area to be protected by the res-toration project.199 The MHWL—the boundary between public and private property—is considered when determining the ECL, but it is not a controlling factor and the restoration project could include pri-vate property.200 The ECL is the new boundary between public and private coastal property once it is recorded, regardless of whether restoration has be-gun or not.201 At this point, “the common law no longer operates ‘to increase or decrease the proportions of any upland property lying landward of such line, either by accretion or erosion or by any other natural or artificial process.’”202 Although the right of accretion and the right for the coastal land owner’s property to touch the water are eliminated, all other littoral rights are preserved under the BSPA.203

195 Fla. Stat. Ann. § 161.088 (West 2006). 196 Id. at §§ 161.011–.45. A critically eroded beach is a shoreline that is so eroded that

upland development, recreational interests, wildlife habitat, or important cultural re-sources are threatened or lost. See Fla. Admin. Code. Ann. r. 62B-36.002(4) (2011).

197 Stop the Beach Renourishment I, 998 So. 2d at 1107–08 (quoting § 161.101(1)). 198 § 161.141. 199 Id. § 161.161(3). 200 See Stop the Beach Renourishment I, 998 So. 2d at 1108 (citing § 161.161(5)). 201 § 161.191(1). 202 Stop the Beach Renourishment I, 998 So. 2d at 1108 (quoting § 161.191(2)). 203 Id. (“[S]ection 161.201 expressly preserves the upland owners’ littoral rights, in-

cluding, but not limited to, rights of ingress, egress, view, boating, bathing, and fishing, and prevents the State from erecting structures on the beach seaward of the ECL except as required to prevent erosion.”). Furthermore, “the State has no intention ‘to extend its claims to lands not already held by it or to deprive any upland . . . owner of the legitimate and constitutional use and enjoyment of his or her property.’” Id. (quoting § 161.141).


3. The Florida Supreme Court’s Decision in Stop the Beach Renourishment I

In 1995, following coastal damage from Hurricane Opal, Destin and Walton Counties filed permits to repair the beaches.204 Stop the Beach Renourishment, Inc. (STBR), a not-for-profit association consist-ing of six owners of beachfront property in the area of the proposed project,205 quickly challenged the decision on procedural and constitu-tional grounds.206 STBR claimed that section 161.191(1) of the BSPA was unconstitutional because is severed common law littoral rights from coastal owners—in other words, the action of Destin and Walton Coun-ties, pursuant to the BSPA, affected a regulatory taking.207 On July 3, 2006, a Florida appeals court certified the following question to the Florida Supreme Court: “On its face, does the Beach and Shore Preser-vation Act unconstitutionally deprive upland owners of littoral rights without just compensation?”208 The Florida Supreme Court found that there was no taking at all because the BSPA merely reflected what could have been done under common law.209 The common law, the court said, balanced the public and private “interests in [the] ever-changing shoreline.”210 The State is interested in protecting the beaches, and allowing public access to the beaches, whereas property owners are interested in conserving their littoral property rights.211 The court began the discussion of common law with an acknowl-edgment that the public trust doctrine required the State to “own and hold the lands under navigable waters for the benefit of the people.”212 Furthermore, the Florida Constitution required the State to conserve and protect the entire beach as a natural resource and to fulfill its obli-gation under the public trust doctrine.213 As stated above, the MHWL—the boundary between private and public land—shifts to account for accretion and reliction but stays stag-nant when the coast is altered because of avulsion.214 This, the court reasoned, is the mechanism employed by the common law to balance

204 Id. at 1106. 205 Id. at 1106 n.5. 206 Id. at 1106. 207 See Stop the Beach Renourishment I, 998 So. 2d at 1107. 208 Id. at 1105. 209 Id. at 1120–21. 210 Id. at 1114. 211 Id. at 1114–15. 212 Id. at 1110. 213 See Stop the Beach Renourishment I, 998 So. 2d at 1110–11. 214 See supra notes 185–194 and accompanying text.


the competing interests of the public obligations and private rights to coastal property.215 Coastal owners get the benefit of accretion and reliction when the MHWL moves to accommodate the change, whereas the public is benefitted by the MHWL remaining stationary after an avulsive event.216 The BSPA, the court stated, achieves this same balance.217 The BSPA allows the State to fulfill its duty to protect the beaches, while serving private interests by protecting private property from future storm damage and erosion, and conserving the view of the water.218 Furthermore, coastal land owners retain their present littoral rights to use, access, and view the water.219 In particular, the act of fixing the ECL and suspending the common law rule of accretion is constitu-tional when considered with the common law rule of avulsion.220

Unlike accretion, when there is an avulsive event the boundary between public and private property does not change and the party that lost land due to avulsion has a right to reclaim the land.221 Hurri-canes are considered avulsion-causing events.222 Thus, because trust lands were lost due to avulsion, the State could take reasonable steps to restore those lands and reclaim title, which is what the BSPA author-izes.223 The Florida Supreme Court also disposed of the lower court’s ar-guments by demonstrating that the doctrine of accretion is not impli-cated by the BSPA because it is a right that is contingent on other fac-tors intended to balance the interests of the public and private rights to the water.224 These factors, according to the court, are not implicated under the statute.225 Thus, because the right to accretion and reliction is a future right that only materializes under specific conditions, which were not triggered in this case, that right could not be taken because it did not yet exist.226

215 See Stop the Beach Renourishment I, 998 So. 2d at 1114. 216 See id. 217 Id. at 1115. 218 Id. 219 Id. 220 Id. at 1116. 221 See supra notes 191–194 and accompanying text. 222 Stop the Beach Renourishment I, 998 So. 2d at 1116. 223 See id. 224 Id. at 1118. 225 Id. 226 See id. at 1119.


Finally, the court stated that under Florida common law, the right to have direct contact with the water is ancillary to the right to access the water.227 There is no explicit littoral right to contact the water in Florida.228 To the extent that there is, it only exists to ensure that prop-erty owners have access to the water.229 Because the right to access the water is not threatened by the BSPA, there was no loss by not having actual contact with the water.230 The court ultimately held that the right of coastal landowners to have their property touch the water’s edge was subject to the public trust doctrine and, thus, not inherent in their ti-tle.231

4. The United States Supreme Court’s Decision in Stop the Beach Renourishment II

The United States Supreme Court granted certiorari in Stop the Beach Renourishment II to determine whether a judicial taking, or any other kind of taking, had occurred.232 In a unanimous decision, the Court held that no taking had occurred, finding the Florida common law of avulsion clear, and that the state’s right to fill its submerged land was superior to any private rights to future accretions and contact with the water.233 This decision was a surprise to many, who predicted that the deci-sion would come out five-to-four in favor of the private property own-ers.234 Further, it was expected that Justice Scalia’s majority opinion would condemn the public trust doctrine’s role in takings analysis, and use the test outlined in Hughes v. Washington to firmly establish a judi-cial takings doctrine.235 The reverberations of such a decision would have reached far beyond land use disputes with coastal property own-ers, and would have affected private property disputes of any kind.236

227 Id. 228 Stop the Beach Renourishment I, 998 So. 2d at 1119. 229 Id. 230 Id. at 1120. 231 See id. at 1120–21. 232 130 S. Ct. 2592, 2600–01 (2010). 233 Id. at 2597, 2611–13. 234 See Zygmunt J.B. Plater et al., supra note 22, ch. 22, at 22 (3d ed. Supp. 2009)

(forecasting that the Supreme Court would reverse the decision in Stop the Beach Renour-ishment I); Barros, supra note 7.

235 Barros, supra note 7; see also Plater et al., supra note 234, at 22. 236 See Brief for the United States as Amicus Curiae Supporting Respondents at 16–18,

Stop the Beach Renourishment II, 130 S. Ct. 2592 (No. 08-1151), 2009 WL 3183079; Barros, supra note 7 (“[A]ccepting the idea of judicial takings would put the Supreme Court in the


Instead, the Court once again failed to decide whether the public trust doctrine had a role in takings analysis, and proposed an entirely new judicial takings standard around which Justice Scalia was not able to garner a majority.237

IV. Florida Supreme Court Did Not Commit a Judicial Taking Under Any Standard

The Supreme Court surprised many when deciding Stop the Beach Renourishment II.238 Not only did the Court decide against private prop-erty rights, but it did not speak about the role of the public trust doc-trine in takings analysis, nor did the justices reach consensus about ju-dicial takings, or even articulate a traditional judicial takings test.239 Even if the Court reached its decision based on a traditional approach to judicial takings and the public trust doctrine, the Florida Supreme Court decision would still not have amounted to a judicial taking.240 To constitute a judicial taking under pre-Stop the Beach Renourishment II doc-trine, a decision must be “a sudden change” and “unpredictable.”241 Thus, if the decision was foreseeable, then it is unlikely to be a judicial taking.242 The Florida Supreme Court’s decision in Stop the Beach Re-nourishment I was foreseeable because: (1) the public trust doctrine is a background principle under the Lucas v. South Carolina Coastal Council factors, generally and in Florida; and (2) the limits placed on private property by the public trust doctrine were established well before the concept of background principles was articulated by the Court.

awkward position of reviewing a state court’s decisions on the substance of state property law.”).

237 Stop the Beach Renourishment II, 130 S. Ct. at 2592. 238 See, e.g., Barros, supra note 7 (expecting a five-to-four decision in favor of judicial

takings and private property rights, and a statement regarding the public trust doctrine). 239 See generally Stop the Beach Renourishment II, 130 S. Ct. at 2592. 240 See Hughes v. Washington, 389 U.S. 290, 296–97 (1967) (Stewart, J., concurring). If

a judicial takings doctrine is established, it will likely be based on Justice Stewart’s Hughes opinion. See supra notes 74–79 and accompanying text. See Bederman, supra note 31, at 1436 (stating that the contemporary judicial takings doctrine can be traced to Hughes); Thompson, supra note 31, at 1468–71; Walston, supra note 50, at 432; Sarratt, supra note 31, at 1509–10.

241 See Hughes, 389 U.S. at 296. 242 See id.; Bederman, supra note 31, at 1436; Thompson, supra note 31, at 1468–71;

Walston, supra note 50, at 432; Sarratt, supra note 31, at 1509–10.


A. The Public Trust Doctrine Is a Background Principle in Florida Law

It is not surprising that the public trust doctrine is declared a background principle by any state because, even theoretically, the pub-lic trust doctrine satisfies the Lucas factors.243 Consider the following: (1) the public trust doctrine is a state doctrine;244 (2) the public trust doctrine is a settled rule of law that has even been codified in many states;245 (3) any restraint on private actions that jeopardize public trust resources merely duplicates what could have been achieved in the courts;246 (4) the doctrine applies to all landowners equally, because any owner of trust resources holds title subservient to the public inter-est;247 and (5) the public trust doctrine does not vacillate, because the doctrine has continuously and predictably expanded throughout our Nation’s history.248 Thus, any restriction of property rights that has its roots in the public trust doctrine was not, to begin with, part of the landowner’s original title.249 The Florida Supreme Court’s holding that the public trust doctrine fulfilled each of the Lucas factors in Stop the Beach Renourishment I was therefore entirely foreseeable.250 The Florida Supreme Court began the discussion by emphasizing that the public trust doctrine is part of Florida’s common law, has been adopted by Florida’s constitution, and the BSPA was enacted to carry

243 Kleinsasser, supra note 90, at 432–37; see also Archer, supra note 121, at 78 (stating

that the public trust doctrine is one of the most traditional common law property princi-ples); Meltz, supra note 42, at 376–77 (suggesting that the public trust doctrine is a back-ground principle and a defense against a takings claim). The Lucas factors are the five factors established by the Supreme Court as elements of a background principle. See supra notes 92–97 and accompanying text.

244 See Phillips Petroleum Co. v. Mississippi, 484 U.S. 469, 473 (1988); Martin v. Waddell, 41 U.S. 367, 413 (1842) (“[T]he shores, and rivers and bay, and arms of the sea, and the land under them, [were to be] held as a public trust for the benefit of the whole community . . . .”); Brennan, supra note 2, at 5.

245 Craig, supra note 115, at 1. 246 See, e.g., Kleinsasser, supra note 90, at 434; Patrick A. Parenteau, Unreasonable Expecta-

tions: Why Palazzolo Has No Right to Turn a Silk Purse into a Sow’s Ear, 30 B.C. Envtl. Aff. L. Rev. 101, 117 (2002) (stating that when Rhode Island passed a regulation protecting coastal resources it made explicit what had formerly been implicit—the public trust doctrine).

247 See Paul Sarahan, Wetlands Protection Post-Lucas: Implications of the Public Trust Doctrine on Takings Analysis, 13 Va. Envtl. L.J. 537, 557 (1994).

248 See Archer, supra note 121 (“[A]lthough the core of the public trust doctrine has remained stable over the past two centuries, it shares the inherent common law capacity to grow and adapt.”).

249 See Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1027–30 (1992); Kleinsasser, supra note 90, at 432–37.

250 See supra notes 242–248 and accompanying text.


out Florida’s public trust duties—satisfying the first two factors.251 The third Lucas factor was satisfied because the BSPA merely duplicated what could have been achieved at common law due to the balance be-tween accretion and avulsion.252 Specifically, “the Act effectuates the State’s constitutional duty to protect Florida’s beaches . . . .”253 Next, the BSPA applies to all coastal property in Florida so it affects all coastal owners equally—satisfying the fourth factor.254 Finally, the duty to pro-tect Florida coasts in such a way has existed since Florida was admitted to the Union as a state,255 and was recognized by Florida courts as early as 1912.256 Thus, as applied here, the public trust doctrine has been fairly static in its role protecting beaches.257 Given the public trust doc-trine’s role as a background principle generally, and in Stop the Beach Renourishment I specifically, it is entirely foreseeable that the public trust doctrine would place restrictions on an owner’s title to land in the manner outlined in Lucas.258 That this decision was foreseeable is amplified because the BSPA was enacted in 1961.259 One judicial takings scholar has argued that “statutory law, if enacted long ago, may itself form part of the state’s ‘background’ principles of law.”260 Therefore, even if the common law public trust doctrine does not restrict an owner’s title in the manner articulated in Stop the Beach Renourishment I, the BSPA itself is so long-established in Florida that it has also become a background princi-ple.261 With both the BSPA and the common law public trust doctrine functioning as background principles of Florida property law, it is cer-tainly predictable that these principles would place restrictions on

251 See Stop the Beach Renourishment I, 998 So. 2d 1102, 1109, 1114–15 (Fla. 2008), aff’d

sub nom., Stop the Beach Renourishment II, 130 S. Ct. 2592 (2010). 252 See id. at 1115. 253 Id. 254 See Fla. Stat. Ann. §§ 161.011–.45 (West 2006). The BSPA does not distinguish be-

tween coastal property owners. Id. 255 See Stop the Beach Renourishment I, 998 So. 2d at 1110. 256 See id.; Clement v. Watson, 58 So. 25, 26 (Fla. 1912). 257 See Stop the Beach Renourishment I, 998 So. 2d at 1107, 1110, 1120–21. 258 See Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1027–30 (1992); Stop the Beach Re-

nourishment I, 998 So. 2d at 1120–21; Archer, supra note 121, at 110–11 (stating that the BSPA demonstrates a legitimate exercise of state power under the public trust doctrine).

259 See § 161.011; Walston, supra note 50, at 403. 260 Walston, supra note 50, at 403. 261 See § 161.011; Walston, supra note 50, at 403.


coastal owners’ title to land.262 At the very least, the longevity of the BSPA implies the probability that the statute would be enforced.263 In sum, the public trust doctrine easily satisfies the five Lucas fac-tors, making the doctrine a background principle that places limits on an owner’s title to land.264 The common law and statutory public trust doctrine function as background principles of Florida property law that place limits on the title of coastal land owners.265 Thus, it is fully fore-seeable that the Florida Supreme Court would recognize these restric-tions on coastal land owners’ titles and find that the BSPA does not af-fect a regulatory taking.266

B. Public Trust Doctrine Is Long Established and Thus Foreseeable

The restrictions that the public trust doctrine can place on an owner’s title to land even pre-date the establishment of the background principle concept in Lucas.267 The substantial case history268 and Justice Brennan’s unpublished dissenting opinion in Nollan v. California Coastal Commission serve as further evidence that the Stop the Beach Renourish-ment I decision was predictable.269 The public trust doctrine has restricted an owner’s title to land for over a century.270 In 1892, the Supreme Court declared that private property owners could not acquire full title to public trust lands held by the state under any circumstances.271 Throughout the twentieth cen-tury, courts have restricted private citizens’ use of water,272 private land

262 See Lucas, 505 U.S. at 1027–30; Stop the Beach Renourishment I, 998 So. 2d at 1107–20. 263 Cf. Walston, supra note 50, at 403 (implying that statutes with a long history are

more likely to be enforced; thus, their enforcement is foreseeable). 264 See supra notes 92–97 and accompanying text. 265 See Lucas, 505 U.S. at 1027–30; Stop the Beach Renourishment I, 998 So. 2d at 1107–20;

Walston, supra note 50, at 403. 266 See Lucas, 505 U.S. at 1027–30; Hughes v. Washington, 389 U.S. 290, 296–97 (1967)

(Stewart, J., concurring); Stop the Beach Renourishment I, 998 So. 2d at 1120–21. 267 See supra Part II.B. 268 See id. Although not directly relevant, because background principles are decided

based on the law of a particular state, it is worth noting the substantial movement of state and federal courts towards establishing the public trust doctrine as a background princi-ple. See supra Part II.C.1. That Florida was preceded by several states, as well as federal courts, in declaring that the public trust doctrine was a background principle makes it even more foreseeable that Florida would also find that the public trust doctrine is a back-ground principle. See id.; see also Hughes, 389 U.S. at 296–97.

269 See supra Part II.B–.C. 270 See Ill. Cent. R.R. v. Illinois, 146 U.S. 387, 453–55 (1892). 271 Id. 272 Nat’l Audubon Soc’y v. Superior Court, 658 P.2d 709, 732 (Cal. 1983).


owners’ ability to exclude the public from private property,273 and pri-vate claims to the use of oil fields.274 In a 1988 dispute over oil reserves located under water, the Supreme Court declared that states recognize private rights in public trust lands “as they see fit.”275 Thus, even before Lucas, it was well established that the public trust doctrine placed re-strictions on private citizens’ use of land,276 and that states were entitled to define the parameters of those restrictions.277 This history renders it even more predictable that the Florida Supreme Court would define certain restrictions on private property rights due to the public trust doctrine—and certainly makes it less unforeseeable.278 Although Justice Brennan never used the term background prin-ciple, the fourteen-page analysis at the beginning of his unpublished dissenting opinion in Nollan satisfied all the Lucas factors necessary to demonstrate that the public trust doctrine was a background principle of California property law.279 Justice Brennan began the first draft by outlining how the public trust doctrine was incorporated as a funda-mental part of California coastal law through adoption in the Califor-nia Constitution in 1879, and embodiment in statutes.280 This history indicates that the public trust doctrine is a California state doctrine,281 and that it is not “newly legislated or decreed.”282 Justice Brennan continued by outlining how California state courts have interpreted private rights pursuant to the public trust doctrine.283 Not only had California courts previously found that private parties holding tidelands were “subject to an easement for the public trust . . . provid[ing] access thereto,” but also that “[t]he public uses to which tidelands are subject are sufficiently flexible to encompass changing public needs . . . .”284 Thus, Justice Brennan demonstrated that the

273 Matthews v. Bay Head Improvement Ass’n, 471 A.2d 355, 369 (N.J. 1984). 274 Phillips Petroleum Co. v. Mississippi, 484 U.S. 469, 473–77 (1988). 275 Id. at 475. 276 See supra Part II.B. 277 See Phillips Petroleum, 484 U.S. at 475. 278 See Stop the Beach Renourishment I, 998 So. 2d 1102, 1109, 1114–15 (Fla. 2008), aff’d

sub nom., Stop the Beach Renourishment II, 130 S. Ct. 2592 (2010); see also Hughes v. Washing-ton, 389 U.S. 290, 296–97 (1967) (Stewart, J., concurring).

279 See Brennan, supra note 2, at 1–14; supra notes 83–90 and accompanying text. 280 Brennan, supra note 2, at 92–97. 281 See Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1027–30 (1992); Brennan, supra

note 2, at 2–12 (satisfying the first Lucas factor). 282 See Lucas, 505 U.S. at 1029; Brennan, supra note 2, at 2–12 (satisfying the second

Lucas factor). 283 See Brennan, supra note 2, at 11. 284 See id.


right to access along the beach is well established in California, as is the recognition by California courts that the trust is flexible and expan-sive.285 Given this, the result achieved by the condition placed on the Nollans’ permit286 “no more than duplicate[d] the result that could have been achieved in the courts.”287 Furthermore, the consistent manner in which California courts have increasingly expanded the doctrine’s breadth suggests that the doctrine neither vacillates greatly nor is it applied ambiguously.288 Fi-nally, because the public trust doctrine applies to all private owners of trust property, the doctrine applies equally to everyone.289 Thus, Justice Brennan demonstrated that coastal landowners never had a full title to their land because the public trust doctrine “in-here[d] in the title itself.”290 This point is made explicit when Justice Brennan concluded the public trust doctrine analysis by stating:

Thus, for more than a century California’s basic governing document has expressed a commitment to preserving the public’s ancient right of access to the sea. The State has de-clared that the bundle of property rights enjoyed by property owners along the coast does not include the right to use their property in any way that might impede public access to the beach. California courts have consistently affirmed the fact that coastal property rights are so qualified.291

This unpublished portion of Justice Brennan’s Nollan dissent adds fur-ther support to the assertion that the public trust doctrine is a back-ground principle.292 The analysis independently establishes the same criteria that later evolved into the model for determining what consti-tuted a background principle.293 This adds further support to the con-tention that the Stop the Beach Renourishment I decision, declaring the

285 See Lucas, 505 U.S. at 1027–30; Brennan, supra note 2, at 11 (satisfying the third Lu-

cas factor). 286 Specifically, allowing the public to walk across their land to get to the public beach. 287 See Lucas, 505 U.S. at 1029. 288 See Stevens v. City of Cannon Beach, 510 U.S. 1207, 1212 n.4 (1994) (Scalia, J., dis-

senting from denial of certiorari); Brennan, supra note 2, at 11. 289 See supra note 238. 290 See Lucas, 505 U.S. at 1029; Brennan, supra note 2, at 13–14. 291 Brennan, supra note 2, at 13–14. 292 See Lucas, 505 U.S. at 1027–30; Brennan, supra note 2, at 1–14 (fulfilling all of the

Lucas factors of a background principle). 293 See Kleinsasser, supra note 90, at 430–32 (explaining the Lucas factors); Brennan,

supra note 2, at 1–14 (fulfilling the Lucas factors).


public trust doctrine to be a background principle, was predictable.294 Therefore, even if the Supreme Court had employed the expected ju-dicial takings test in Stop the Beach Renourishment II—foreseeability— and finally addressed the public trust doctrine’s role in takings analysis, the Florida court in Stop the Beach Renourishment I clearly did not affect a judicial taking.295

Conclusion

When the Supreme Court decided Stop the Beach Renourishment II, the Court once again failed to answer several questions that have plagued legal scholars for years. There was no consensus as to whether Fifth Amendment takings protections apply to the judiciary—a “judicial takings” doctrine. Also, the Court did not clarify the definition of a “background principle” as articulated in Lucas v. South Carolina Coastal Commission. Furthermore, the Court again evaded addressing whether or not the public trust doctrine plays a role in takings analysis. This Note argues that the public trust doctrine should, and does, play a role in takings analysis. The doctrine satisfies all apparent criteria for a background principle under the Lucas model, and a substantial history of decisions, rendered both prior to and after Lucas, recognize that the public trust doctrine imposes limits on a private property owner’s title to trust resources. Because the public trust doctrine is a background principle, the decision in Stop the Beach Renourishment I does not constitute a judicial taking under any standard, including that standard articulated in Hughes v. Washington. A judicial taking, as thus perceived, requires that a

294 See Hughes v. Washington, 389 U.S. 290, 296–97 (1967) (Stewart, J., concurring);

Stop the Beach Renourishment I, 998 So. 2d 1102, 1109, 1114–15 (Fla. 2008), aff’d sub nom., Stop the Beach Renourishment II, 130 S. Ct. 2592 (2010). The decision appears even more predictable when one considers the similarities between Justice Brennan’s unpublished Nollan dissent and Stop the Beach Renourishment I. Compare Brennan, supra note 2, at 1–14, with Stop the Beach Renourishment I, 998 So. 2d at 1102–21. Both opinions begin by tracing the common law history of the public trust doctrine in the state, then trace the history of the relevant statutes in the state, and then declare that the statute is merely a reflection of what could have been achieved at common law. Compare Brennan, supra note 2, at 1–14, with Stop the Beach Renourishment I, 998 So. 2d at 1102–21.

295 See Hughes, 389 U.S. at 296–97; Stop the Beach Renourishment I, 998 So. 2d at 1109, 1114–15. In fact, given the substantial precedent towards recognizing the restrictions that the public trust doctrine places on private property rights, a decision that broadly declared the public trust doctrine not to be a background principle would itself be unpredictable, and constitute judicial taking. See supra notes 31, 51. Perhaps this dichotomy should be considered when determining whether judicial takings are legitimate claims at all. See supra Part I.C.


decision be unreasonable and unpredictable given the relevant prece-dents—or be unforeseeable. Even though the Supreme Court articu-lated a novel judicial takings standard in this case—the “established property rights” standard—the decision would have been the same had they applied Hughes as expected. Despite the Court’s unwillingness to speak on this issue, the public trust doctrine is a background principle, so the decision in Stop the Beach Renourishment I was entirely foreseeable. The strength and longevity of the precedents establishing the public trust doctrine as a background principle are so strong that the Stop the Beach Renourishment I decision was not a judicial taking under any test. Ironically, even though the Court reached the correct result, the test for judicial takings offered in Stop the Beach Renourishment II was such a dramatic shift from all prior takings precedent, that, had the decision received a majority vote, it may have been a judicial taking in and of itself.296

296 See Mulvaney, supra note 70, at 266 (stating that under the “established” standard,

even recent landmark Supreme Court decisions would have been judicial takings, and Stop the Beach Renourishment II itself constitutes a judicial taking).

THE CITIZEN PARTICIPATION ACT OF 2009: FEDERAL LEGISLATION AS AN EFFECTIVE

DEFENSE AGAINST SLAPPS

Jesse J. O’Neill*

Abstract: The First Amendment to the United States Constitution ex-pressly guarantees the right of citizens to petition the government. Citi-zen efforts have been particularly crucial to the process of creating, shap-ing, and enforcing environmental laws. Nevertheless, citizen participants in government can often find themselves facing retaliation in the form of a strategic lawsuit against public participation (SLAPP). SLAPPs are law-suits brought to interfere with a party's exercise of its right to petition the government, typically by draining the party's time and resources. Al-though many states have adopted anti-SLAPP protections, similar protec-tions are lacking at the federal level. Because so many federal environ-mental statutes rely on citizen participation, the threat of a SLAPP is especially high. This Note argues that current federal anti-SLAPP protec-tions are inadequate, and that legislation proposed in 2009 would better protect the right of citizens to petition the government.

Introduction

“The problem of freedom in America is that of maintaining a competition of ideas, and you do not achieve that by silencing one brand of idea.”1 In recent years, citizen and non-governmental organi-zation (NGO) environmental watchdogs have experienced the silenc-ing of their brand of idea at the hands of a legal construct known as a SLAPP.2 A SLAPP is a “strategic lawsuit against public participation.”3 Although only a subject of study over approximately the last twenty years, SLAPPs have existed in the American judicial system almost since its beginning.4 SLAPPs are used to prevent or punish others for exercis-

* Managing Editor, Boston College Environmental Affairs Law Review, 2010–11. 1 Max Lerner, The Muzzling of the Movies, in Actions and Passions: Notes on the

Multiple Revolution of Our Time 75, 77 (Kennikat Press 1969) (1949). 2 See George W. Pring & Penelope Canan, SLAPPs: Getting Sued for Speaking

Out 84 (1996). 3 Penelope Canan & George W. Pring, Strategic Lawsuits Against Public Participation, 35

Soc. Probs. 506, 506 (1988). 4 See Pring & Canan, supra note 2, at x, 17.

477


ing their right to petition, a right protected by the First Amendment’s Petition Clause.5 As lawsuits brought to interfere with a party’s exercise of petitioning activity, SLAPPs have a chilling effect on constitutionally protected speech.6 Although many citizen environmental enforcers may find them-selves fighting a SLAPP in federal court, there is currently no effective defense against a SLAPP brought in federal court.7 SLAPP defenses in federal courts are presently limited to a narrow set of options: use of the Federal Rules of Civil Procedure, arguing for the extension of a definition of protected petitioning rooted in antitrust caselaw, or at-tempting to apply state anti-SLAPP statutes under the Erie doctrine.8 None of these defenses adequately or effectively address the needs of those facing a SLAPP in federal court.9 In December 2009, Representative Steve Cohen introduced fed-eral anti-SLAPP legislation in the form of the Citizen Participation Act of 2009.10 This Act attempts to provide an effective federal SLAPP de-fense by allowing SLAPPs to be quickly identified and dismissed before their costs can grow to excessive amounts.11 In addition, the Act con-tains a fee-shifting provision, which can further lighten any resource-draining effects of the litigation.12 This Note examines the Citizen Participation Act of 2009 and its likely efficacy as a SLAPP defense. Part I explores the concept of SLAPPs in general, including a discussion of SLAPPs and environmental law-suits.13 Part II examines the right to petition, its modern interpretation, and the interplay between SLAPPs and the right to petition.14 Part III investigates the effects of SLAPPs on speech.15 Part IV surveys the SLAPP defenses that are currently available in the court system.16 Part V considers each one of those defenses and explains why they offer inade-

5 Canan & Pring, supra note 3, at 506–07. 6 See George W. Pring, SLAPPs: Strategic Lawsuits Against Public Participation, 7 Pace

Envtl. L. Rev. 3, 8 (1989). 7 See Pring & Canan, supra note 2, at 190. 8 See Fed. R. Civ. P. 11, 12(b)(6), 56; City of Columbia v. Omni Outdoor Adver., Inc.,

499 U.S. 365, 379–80 (1991); United States ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963, 973 (9th Cir. 1999).

9 See Fed. R. Civ. P. 11, 12(b)(6), 56; Omni, 499 U.S. at 379–80; Newsham, 190 F.3d at 973. 10 Citizen Participation Act of 2009, H.R. 4364, 111th Cong. (2009). 11 See id. §§ 3–5. 12 See id. § 8. 13 See infra Part I. 14 See infra Part II. 15 See infra Part III. 16 See infra Part IV.

2011] Federal Legislation to Protect SLAPP Defendants 479

quate protection in the federal courts.17 Finally, Part VI argues for fed-eral anti-SLAPP legislation as the best federal SLAPP defense and ana-lyzes the proposed federal bill.18

I. SLAPPs Generally

SLAPPs were first identified and studied in the mid-1980s by Pro-fessors Penelope Canan and George W. Pring.19 An early study defined SLAPPs as “civil lawsuits . . . filed against non-governmental individuals and groups for having communicated their views to a government body or official on an issue of some public interest.”20 Stated in different terms, SLAPPs are lawsuits that “claim injury from citizen efforts to in-fluence a government body or the electorate on an issue of public sig-nificance.”21 All SLAPPs fulfill four defining characteristics.22 First, to be a SLAPP, a lawsuit must primarily “involve communications made to in-fluence a governmental action or outcome.”23 Subsequently, those communications must “result[] in (a) a civil complaint or counterclaim (b) filed against nongovernment individuals or organizations . . . on (c) a substantive issue of some public interest or social significance.”24 In other words, a SLAPP requires an underlying communication, gener-ally to the government, which becomes the object of the SLAPP suit.25 SLAPPs generally take the form of common torts, and can appear in practically any area of law.26 A 1989 study of 228 SLAPP cases revealed that while the majority of these suits were brought as charges of defa-mation, SLAPPs were also brought as claims of business torts, judicial torts, conspiracy, constitutional civil rights violations, and nuisance.27 As an example, consider a corporation that applies for a permit to conduct a restricted activity, perhaps some form of waste disposal. A private citizen writes a letter to the permitting body, attempting to con-

17 See infra Part V. 18 See infra Part VI. 19 Pring & Canan, supra note 2, at x. 20 Pring, supra note 6, at 4. 21 Canan & Pring, supra note 3, at 507. 22 Pring & Canan, supra note 2, at 8–9. 23 Id. at 8. 24 Id. at 8–9. 25 See Pring, supra note 6, at 7–8. 26 See id. at 9. 27 Id. Business torts included charges of interference with contract, restraint of trade,

and other antitrust activities, while judicial torts included charges of abuse of process and malicious prosecution. Id. nn.12–13.


vince the permitting body to deny the permit. In response, the corpo-ration files suit for damages against the private citizen, possibly alleging defamation or libel. The corporation’s lawsuit would be a SLAPP—a civil complaint for monetary damages against a non-governmental in-dividual who communicated to a government body on an issue of pub-lic concern.28 The corporation would be the “SLAPP filer,” and the pri-vate citizen would be the “SLAPP target.”29

A. A Brief History of SLAPPs

SLAPPs have been used to threaten public participation in gov-ernment since the early days of the American judicial system.30 Early SLAPPs were generally struck down by the courts, and eventually disap-peared almost completely.31 It wasn’t until the 1970s and the resurgence of political activism, particularly the environmental movement, that SLAPPs were again used as a legal tool.32

B. SLAPPs and Environmental Lawsuits

Environmental issues are common subjects of SLAPPs.33 Of the 228 cases analyzed by Professors Pring and Canan in 1989, at least forty-three concerned potential environmental issues.34 Many federal envi-ronmental statutes contain citizen-enforcement provisions.35 For ex-ample, the Clean Water Act allows “any citizen” to file suit against al-leged violators.36 Similarly, the Clean Air Act bestows enforcement

28 See Pring & Canan, supra note 2, at 8–9. 29 As lawsuits overlying other communications, which may themselves be lawsuits, the

language of SLAPPs can get confusing. For this reason, this Note will refer to the bringer of the overlying civil complaint or counterclaim as the “SLAPP filer,” and the non-governmental individual or group who made the initial communication as the “SLAPP target.”

30 See, e.g., Harris v. Huntington, 2 Tyl. 129, 4 Am.Dec. 728 (Vt. 1802). In Harris, five citizens wrote to the Vermont legislature to protest Ebenezer Harris’s reappointment as Justice of the Peace, painting Harris in less-than-favorable terms. Id. at 729. Harris re-sponded with a SLAPP against the citizens. See id. The Vermont Supreme Court reversed a jury’s verdict in favor of Harris, noting that “[a]n absolute and unqualified indemnity from all responsibility in the petitioner is indispensible, from the right of petitioning the su-preme power for the redress of grievances.” Id. at 733.

31 See Pring & Canan, supra note 2, at 18. 32 See id. 33 See Pring, supra note 6, at 9. 34 See id. Twenty-five of the cases involved urban/suburban development and zoning,

and eighteen of the cases involved environmental/animal rights. Id. 35 See, e.g., Clean Water Act § 505, 33 U.S.C. § 1365 (2006). 36 Id. § 505(a).


authority on “any person.”37 Citizen environmental enforcement also includes activities such as “report[ing] violations, sit[ting] on govern-ment boards, testify[ing] at public hearings, . . . [and] lobby[ing] agen-cies.”38 Citizen efforts have been described as having the “central role . . . in creating and shaping environmental law.”39

Citizen and NGO enforcement of environmental laws is protected Petition Clause activity.40 However, if the violator is a large corporation that decides to sue a private citizen in response to her petitioning activ-ity, the corporation likely has the resources to use the costly litigation process to “break” the citizen.41 At the very least, these threats of retalia-tion may cause the citizen to reconsider or even abandon her petition-ing activity, chilling her desire to engage in activity the First Amendment protects.42 Because of the resource-draining, speech-chilling effects of SLAPPs, opponents of citizen and NGO environmental watchdogs have used SLAPPs as a method of intimidation since the beginning of the envi-ronmental movement.43 As early as 1975, scholars noted that “[p]arties whose interests are threatened by environmental suits . . . have jeopard-ized the continued development and future effectiveness of citizen en-forcement of environmental protection laws by devising a new litigation strategy—the assertion of a multi-million dollar counteraction . . . against the environmental plaintiff.”44

II. The Right to Petition

Scholars have recognized the importance of citizen involvement in a democratic government for thousands of years.45 As Aristotle ob-served, “if liberty and equality . . . are chiefly to be found in democracy, they will be best attained when all persons alike share in the govern-

37 Clean Air Act § 304(a), 42 U.S.C. § 7604(a) (2006). 38 Pring & Canan, supra note 2, at 83. 39 Zygmunt J.B. Plater et al., Environmental Law and Policy: Nature, Law, and

Society 398 (3rd ed. 2004). 40 See Pring & Canan, supra note 2, at 84; infra Part II. 41 See Stacy J. Silveira, Comment, The American Environmental Movement: Surviving

Through Diversity, 28 B.C. Envtl. Aff. L. Rev. 497, 529 (2001) (“litigation is too long and costly for most grassroots groups”).

42 See Pring, supra note 6, at 8. 43 See Pring & Canan, supra note 2, at 83–84. 44 Note, Counterclaim and Countersuit Harassment of Private Environmental Plaintiffs: The

Problem, Its Implications, and Proposed Solutions, 74 Mich. L. Rev. 106, 106–07 (1975). 45 See Aristotle, Aristotle’s Politics bk. IV, at 156 (H. W. C. Davis ed., Benjamin

Jowett trans., Oxford Univ. Press 1916) (c. 350 B.C.E.).


ment to the utmost.”46 The right to petition grew out of pre-Magna Carta practices and was protected in the Great Charter itself.47 The right to petition continued to mature throughout English history, and was enshrined by the Founding Fathers in the First Amendment of the United States Constitution.48 Modern courts have given the right to petition a very broad interpretation, even going so far as to designate the right as one of the “fundamental principles of liberty and justice which lie at the base of all civil and political institutions.”49

A. The Modern Interpretation of the Right to Petition

Today, the courts give the right to petition a broad interpretation.50 In its modern form, the right to petition covers any peaceful, legal at-tempt to influence any branch of government at any level.51 “Protected activities include . . . filing complaints, reporting violations of law, testify-ing before government bodies, writing letters, lobbying legislatures, ad-vocating before administrative agencies, circulating petitions, conduct-ing initiative and referendum campaigns, and filing lawsuits. It even protects peaceful demonstrations, protests, picketing, and boycotts aimed at producing government action.”52 The right to petition the government for a redress of grievances “is implicit in ‘[t]he very idea of government, republican in form.’”53

B. Are SLAPPs Themselves Protected Exercises of the Right to Petition?

Under the modern interpretation of the right to petition, filing lawsuits is generally a protected activity.54 SLAPPs represent the conflict between the parties’ petitioning activities—the initial petition by the SLAPP target and the following lawsuit by the SLAPP filer.55 “When two sides each have fundamental constitutional rights, they must be bal-anced, must somehow be quantified or limited so that each does not

46 Id. 47 See Gregory A. Mark, The Vestigial Constitution: The History and Significance of the Right

to Petition, 66 Fordham L. Rev. 2153, 2163–64 (1998). 48 See id. at 2165–70, 2203. 49 De Jonge v. Oregon, 299 U.S. 353, 364 (1937); accord Pring & Canan, supra note 2, at 16. 50 See Pring & Canan, supra note 2, at 16. 51 See id. 52 Id. 53 McDonald v. Smith, 472 U.S. 479, 482 (1985) (quoting United States v. Cruikshank,

92 U.S. 542, 552 (1875)). 54 Pring & Canan, supra note 2, at 16. 55 See id.


cancel out the other.”56 In general, policy and constitutional considera-tions result in a tipping of the balance in favor of the SLAPP target and against the SLAPP filer.57 Tipping the balance against certain lawsuits is not a new idea in American jurisprudence.58 The judicial system already presupposes that certain lawsuits fall outside of First Amendment protections.59 For ex-ample, the Federal Rules of Civil Procedure go so far as to allow the court to impose sanctions for lawsuits unwarranted by law or fact, as well as those brought for an “improper purpose.”60 While both SLAPP filers and targets represent their own private interests and injuries, SLAPP targets also implicate “the additional, broader concerns of continued public participation in government, the viability of the representative political process itself.”61 A SLAPP target petitions the government with the goal of participating in and affecting a governmental decision.62 In contrast, the SLAPP filer has “completely different goals . . . not a government result or outcome but monetary compensation from the target.”63 Therefore, when there is a conflict between a SLAPP filer’s right to petition and that of a SLAPP target, the balance often tips in favor of the SLAPP target.64

III. The Effect of SLAPPs on the Right to Petition

By their very moniker, SLAPPs imply a conflict with the right to petition—a SLAPP is a lawsuit, strategically brought “against” public participation to discourage or disrupt petitioners.65 Public participation is the very essence of the right to petition and is protected by the First Amendment’s Petition Clause.66 Although SLAPPs look like normal lawsuits, they are often brought for an ulterior motive.67 SLAPPs are typically brought in an attempt to block citizen involvement in the po-

56 Id. at 12. 57 See id. at 12, 87. 58 See Fed. R. Civ. P. 11(b)–(c) (providing a means to sanction bringers of undesirable

lawsuits). 59 See id. 11(b). 60 Id. 11(b)–(c). 61 Pring & Canan, supra note 2, at 12. 62 See id. at 87. 63 Id. 64 Id. at 12. 65 See Canan & Pring, supra note 3, at 506. 66 Id. 67 See Pring & Canan, supra note 2, at 29.


litical process or to punish citizens who have already participated.68 Prevailing on a SLAPP in court is typically not the goal of a SLAPP filer;69 rather, filers hope to transform a political debate into a legal one, chilling speech and draining their opponent’s resources.70 A SLAPP is an example of what the Supreme Court was referring to when it wrote that “[a] lawsuit no doubt may be used . . . as a power-ful instrument of coercion or retaliation.”71 Targets of a SLAPP will likely have to incur legal expenses to deal with the SLAPP and may ex-perience a chilling effect on their willingness to petition the govern-ment.72 As one SLAPP filer wrote, “[s]ee even if I lose the cases. [sic] I’m still going to win because I’m [going to force them] to spend at least $50,000.00 each in legal fees. Either way. I win.”73 Protect Our Mountain Environment v. District Court (POME ) is a well-known example of the resource-draining and speech-chilling effects of a SLAPP.74 In 1978, at the request of developers Gayno, Inc., and Lock-port Corporation (collectively Gayno), Jefferson County, Colorado, re-zoned over 500 acres of land in order to allow Gayno to proceed with a planned development.75 Later that year a local environmental group, Protect Our Mountain Environment (POME), and nine individuals sued the county zoning board and Gayno, accusing the board of exceed-ing its jurisdiction and abusing its discretion.76 POME did not prevail.77 In 1980, Gayno filed a SLAPP against POME and its legal counsel in Colorado state court, alleging abuse of the legal process and civil conspiracy and seeking $10 million in compensatory damages and $30 million in exemplary damages.78 POME filed a motion to dismiss on the ground that POME’s action “was an exercise of the First Amend-

68 Pring, supra note 6, at 5–6. 69 See id. Over three-quarters of SLAPPs are won in court by the SLAPP targets. Id. at 12. 70 See id. 71 Bill Johnson’s Rests., Inc. v. NLRB, 461 U.S. 731, 740 (1983). 72 See id. at 740–41. 73 Sean P. Trende, Defamation, Anti-SLAPP Legislation, and the Blogosphere: New Solutions

for an Old Problem, 44 Duq. L. Rev. 607, 607 (2006) (quoting an e-mail from Anthony Di-Meo to “Scott” ( July 10, 2006) (on file with Sean P. Trende)). Anthony DiMeo was the plaintiff in DiMeo v. Max, 433 F. Supp. 2d 523 (E.D. Pa. 2006), aff’d, 248 F. App’x 280 (3rd Cir. 2007), where he brought suit against Max for offensive comments posted by anony-mous others on a website hosted by Max. Id. at 524–25. DiMeo’s suit was dismissed and his motion to file an amended complaint was denied. Id. at 533.

74 See 677 P.2d 1361 (Colo. 1984). 75 Id. at 1362–63. 76 Id. at 1363. 77 Id. at 1364. 78 Id.


ment right to petition the government for redress of grievances.”79 The district court denied POME’s motion.80 On appeal in 1984, the Colo-rado Supreme Court handed down a new rule for resolving motions to dismiss based on the right to petition for redress of grievances and re-manded the case.81 After another year in district court, Gayno finally dropped the entire matter.82 Gayno’s lawsuit against POME satisfies the four defining character-istics of a SLAPP.83 First, Gayno’s complaint against POME, the SLAPP, involved a communication POME made to influence a governmental outcome.84 Gayno’s complaint against POME was made in response to POME’s lawsuit against Gayno and the board—the communication— which was brought in an attempt to overturn the board’s approval of Gayno’s rezoning petition.85 The communication at issue, POME’s 1978 lawsuit, resulted in a civil complaint, Gayno’s 1980 lawsuit.86 Gayno’s complaint was filed against POME, a non-governmental or-ganization.87 Finally, the issue was a substantive issue of some public interest—rezoning.88 Examining the POME case illustrates the resource-draining effect of a SLAPP.89 Gayno’s “development has never been built, and in 1995 community and county leaders [were] completing plans to acquire and preserve the property as open space—exactly what POME wanted in the first place.”90 Although it appears that POME “won” the battle, the result came at a very high price:

The lawsuit dragged on for nearly four years, taking a tre-mendous toll in stress, lost time and work, and mounting legal costs. POME’s leaders ceased being environmental watchdogs in their community and withdrew from public life; some liter-ally moved out of town. Popular support for POME faded, contributions dried up, and the organization died.91

79 Id. 80 POME, 677 P.2d at 1364. 81 Id. at 1369. 82 Pring & Canan, supra note 2, at 44. 83 See id. at 8–9. 84 POME, 677 P.2d at 1363–64. 85 Id. 86 See id. at 1364. 87 See id. at 1362, 1364. 88 Id. at 1362. 89 See Pring & Canan, supra note 2, at 6. 90 Id. 91 Id.


In addition to the resource-draining effect the SLAPP had on POME, the case also exemplifies the chilling effect SLAPPs can have on the public’s exercise of the right to petition.92 “[A] decade later, envi-ronmental campaigns in [Jefferson County] can be withered by the phrase: ‘Remember POME.’”93

IV. Current Defenses for SLAPP Targets

There are a number of current defenses for SLAPP targets at both the state and federal level.94 SLAPP targets can use the Federal Rules of Civil Procedure in their defense,95 and turn to an expansive definition of protected petitioning activity that evolved in the context of antitrust caselaw.96 In addition, many states have passed anti-SLAPP legislation that SLAPP targets can use to move for the early dismissal of a SLAPP suit.97 These state statutes can be used in some federal jurisdictions un-der the Erie doctrine, but this use is not consistent in all federal courts.98 Recently, anti-SLAPP legislation was introduced at the federal level.99 As of late 2010, the bill was being considered by the House Ju-diciary Committee’s Subcommittee on Courts and Competition Policy, although it appears to have stalled.100

A. Federal Rules of Civil Procedure

The Federal Rules of Civil Procedure can be used defensively by SLAPP targets.101 The Federal Rules provide SLAPP targets with the opportunity to move for the early dismissal of the SLAPP, as well as seek

92 See id. 93 Id. 94 See Fed. R. Civ. P. 11, 12(b)(6), 56; City of Columbia v. Omni Outdoor Adver., Inc.,


95 See Fed. R. Civ. P. 11, 12(b)(6), 56. 96 See Omni, 499 U.S. at 379–80. 97 Michael Eric Johnston, A Better SLAPP Trap: Washington State’s Enhanced Statutory Pro-

tection for Targets of “Strategic Lawsuits Against Public Participation,” 38 Gonz. L. Rev. 263, 275–76 (2002–2003).

98 Compare Newsham, 190 F.3d at 973 (applying California’s anti-SLAPP statute to a fed-eral diversity case), with Stuborn Ltd. P’ship v. Bernstein, 245 F. Supp. 2d 312, 316 (D. Mass. 2003) (holding that Massachusetts’ anti-SLAPP statute is not available in federal court).

99 Citizen Participation Act of 2009, H.R. 4364, 111th Cong. (2009). 100 Bill Summary & Status 111th Congress (2009–2010) H.R. 4364, Libr. of Congress, Tho-

mas, http://hdl.loc.gov/loc.uscongress/legislation.111hr4364 (last visited Apr. 15, 2010). 101 See Fed. R. Civ. P. 11, 12(b)(6), 56.


sanctions against the SLAPP filer.102 Since a SLAPP is, by definition, a civil lawsuit,103 the Federal Rules of Civil Procedure are available to all targets of SLAPPs brought in federal court.104 Rule 12(b)(6) allows a SLAPP target to assert, as a defense, that the SLAPP “fail[s] to state a claim upon which relief can be granted.”105 Under Rule 8(a)(2), a complaint requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.”106 Rule 8(a)(2) does not require detailed factual allegations, but the alle-gations “must be enough to raise a right to relief above the speculative level.”107 The Supreme Court recently held in Bell Atlantic Corp. v. Twombly that a complaint must contain enough facts to show a plausi-ble, rather than merely possible, entitlement to relief.108 This pleading standard applies to all civil actions.109 Rule 56 gives federal SLAPP targets another defense.110 This rule provides targets with the opportunity to move for summary judgment in an attempt to end the adjudication.111 A motion for summary judgment can be brought any time until thirty days after the close of discovery.112 The opposing party, the SLAPP filer in this case, must “set out [in its response] specific facts showing a genuine issue for trial.”113 If necessary to the opposing party’s response, the court may order a continuance in order to enable further discovery.114 “The judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and the movant is entitled judgment as a matter of law.”115 In addition to early dismissal of the SLAPP, the Federal Rules of Civil Procedure provide a means whereby the court may impose sanc-tions on a SLAPP filer.116 As a matter of law, the filing of a SLAPP acts as a certification that the lawsuit “is not being presented for any im-

102 See id. 103 Pring & Canan, supra note 2, at 8. 104 See Fed. R. Civ. P. 1. 105 Id. 12(b)(6). 106 Id. 8(a)(2). 107 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). 108 See id. at 570. 109 Ashcroft v. Iqbal, 129 S.Ct. 1937, 1953 (2009). 110 See Fed. R. Civ. P. 56. 111 See id. 56(b). 112 Id. 56(c)(1)(A). 113 Id. 56(e)(2). 114 Id. 56(f)(2). 115 Id. 56(c)(2). 116 See Fed. R. Civ. P. 11.


proper purpose, such as to harass, cause unnecessary delay, or need-lessly increase the cost of litigation.”117 Should the court find, upon motion by the SLAPP target or the court’s initiative, that the lawsuit was brought for an improper purpose, Rule 11 allows the court to impose sanctions.118 Improper purposes can include motives “such as personal or economic harassment.”119 A Rule 11 sanction “must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated,”120 but may include an “award to the pre-vailing party [of] the reasonable expenses, including attorney’s fees, incurred for the motion.”121

B. Federal Caselaw

Key Supreme Court decisions in the antitrust realm have developed an expansive constitutional definition of protected petitioning activity, creating a possible SLAPP defense in other areas of law.122 Beginning in the early 1960s, the Court has considered multiple SLAPPs brought where the underlying communication made to influence governmental action allegedly violated the Sherman Antitrust Act.123 Throughout these cases, the Court has held that petitioning the government is a pro-tected activity, even if the petitioning would otherwise violate the Sherman Act.124 Petitioning activity is protected regardless of intent or purpose, unless the petitioning itself is the group’s only goal.125

117 Id. 11(b)(1). 118 Id. 11(c)(2)–(3). 119 Greenberg v. Sala, 822 F.2d 882, 885 (9th Cir. 1987). 120 Fed. R. Civ. P. 11(c)(4). 121 Id. 11(c)(2). 122 See City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365 (1991); United

Mine Workers v. Pennington, 381 U.S. 657 (1965); E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961).

123 See Omni, 499 U.S. at 369; Pennington, 381 U.S. at 659; Noerr, 365 U.S. at 129, 132. Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States.” 15 U.S.C. § 1 (2006). Section 2 punishes “[e]very person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States.” Id. § 2. In sum, the Sherman Act comprehensively “provide[s] against combinations or conspiracies in restraint of trade or commerce, the monopolization of trade or commerce, or attempts to monopolize the same.” D.R. Wilder Mfg. Co. v. Corn Prods. Ref. Co., 236 U.S. 165, 173–74 (1915).

124 See Omni, 499 U.S. at 379–80 (summarizing Noerr and Pennington). 125 See id. at 380.


1. The “Sham Exception” from Noerr-Pennington’s Definition of Protected Petitioning Activity

In the early 1960s, the Supreme Court reviewed SLAPP suits in the antitrust context in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc. and United Mine Workers v. Pennington. In the former case, the Court was faced with cross SLAPPs between a group of truck opera-tors and a group of railroads alleging petitioning activity in violation of the Sherman Act.126 The Court gave great latitude to the right to peti-tion, holding that the petitioning activity of both groups was protected and that “mere group solicitation of governmental action” did not vio-late the Sherman Act, even if done solely for an anticompetitive pur-pose.127 Four years later, the Court, in Pennington, reached a similar conclusion when presented with allegations of Sherman Act violations in response to the United Mine Workers’ efforts to enforce a royalty contract in the courts.128 The Court again emphasized that “[j]oint ef-forts to influence public officials do not violate the antitrust laws even though intended to eliminate competition.”129 Despite its protection of the right to petition even when the peti-tioning activity might otherwise violate the Sherman Act, the Noerr-Pennington doctrine left one exception that could be used to infringe upon this right.130 The Noerr Court was careful to identify the possibility that a petition might merely be a “sham” to cover otherwise illegal be-havior.131 “There may be situations in which a publicity campaign, os-tensibly directed toward influencing governmental action, is a mere sham to cover what is actually nothing more than an attempt to inter-fere directly with the business relationships of a competitor and the ap-plication of the Sherman Act would be justified.”132 In these situations, a campaign would lose its Petition Clause protection.133 In a later antitrust case, the Court explained that even a petitioning activity performed with the mere intent to block access to meaningful adjudication and “usurp [the] decisionmaking process” was not protected under the Peti-tion Clause.134 The Court explicitly focused on intent, stating that “such

126 See Noerr, 365 U.S. at 129, 132. 127 Id. at 138–39. 128 381 U.S. at 659, 670. 129 Id. at 670. 130 See Noerr, 365 U.S. at 144. 131 Id. 132 Id. 133 See id. 134 Cal. Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 511–12 (1972).


a purpose or intent . . . would be to discourage and ultimately prevent the respondents from invoking the processes of the administrative agencies and courts and thus fall within the exception to Noerr.”135

2. The Supreme Court Strengthened SLAPP Defenses When it Eliminated the Sham Exception

In time, the Supreme Court limited Noerr-Pennington’s sham excep-tion, shifting the focus from the petitioner’s intent to the expected out-come of the petitioning.136 In City of Columbia v. Omni Outdoor Advertising, Inc., the Court considered an antitrust SLAPP between two companies engaged in the billboard business.137 The SLAPP filer attempted to use the sham exception against a lobbying campaign that allegedly violated the Sherman Act.138 However, the Supreme Court explained that the lobbying activities were not a sham and were protected under Noerr-Pennington so far as any Sherman Act violations were concerned.139 Rather than focusing on petitioner’s intent as it had previously, the Court instead focused on the expected outcome of the petitioning.140 “Although [the SLAPP target] indisputably set out to disrupt [the SLAPP filer]’s business relationships, it sought to do so not through the very process of lobbying, . . . but rather through the ultimate product of that lobbying . . . .”141 Regarding intent, the Court wrote “[t]hat a pri-vate party’s political motives are selfish is irrelevant: ‘Noerr shields from the Sherman Act a concerted effort to influence public officials regard-less of intent or purpose.’”142 Omni’s holding protected SLAPP targets by removing from the scope of the sham exception any petitioning ac-tivity undertaken in an attempt to influence government action, re-gardless of the petitioners’ intent.143

3. Extension Beyond the Antitrust Realm

Noerr, Pennington, and Omni all deal with the issue of whether a pe-titioning activity, which would otherwise be in violation of the Sherman

135 Id. (internal quotation omitted). 136 See City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 379–80 (1991). 137 See id. at 367, 369. 138 See id. at 368–69, 382. 139 Id. at 382. 140 See id. at 381–82. 141 Id. at 381. 142 Omni, 499 U.S. at 380 (quoting United Mine Workers v. Pennington, 381 U.S. 657,

670 (1965)). 143 See id.


Act, is nevertheless protected under the First Amendment’s Petition Clause and immunized from Sherman Act liability.144 Although devel-oped in the antitrust realm, some federal courts have shown a willing-ness to extend Noerr-Pennington to protect Petition Clause activity in other subject areas.145 In Brownsville Golden Age Nursing Home, Inc. v. Wells, the Third Circuit recognized the application of Noerr-Pennington to protect private citizens’ petitioning activity to report aborrent condi-tions in a nursing home.146 In a decision later affirmed by the Fourth Circuit, the Maryland District Court applied the Noerr-Pennington doc-trine to protect petitioning activity from the common law claims of ma-licious use of process, abuse of process, tortious interference with pro-spective advantage, fraud, and conspiracy.147 The Supreme Court has not given a clear pronouncement as to its willingness to extend Noerr-Pennington beyond the antitrust realm.148

C. Statutory Defenses

Anti-SLAPP laws can provide SLAPP targets with additional de-fenses.149 These defenses include procedural mechanisms allowing SLAPP targets to get the SLAPP dismissed from court, as well as provi-sions allowing SLAPP targets who prevail on a motion to dismiss to re-cover attorney’s fees and costs.150

144 See supra Parts IV.B.1–.2. 145 See, e.g., Brownsville Golden Age Nursing Home, Inc. v. Wells, 839 F.2d 155, 160

(3rd Cir. 1988). In Brownsville, two private citizens visited the nursing home in their efforts to find a suitable home for a relative. Id. at 157–58. Appalled by the conditions they ob-served, the two citizens reported their observations to state and federal officials, as well as the general public. Id. at 158. The nursing home was eventually decertified. Id. In re-sponse, Brownsville filed a SLAPP against the two citizens, alleging that they had engaged in a civil conspiracy to interfere with the nursing home’s business relations. Id. at 157.

146 See id. at 160 (citing the Noerr-Pennington doctrine as grounds for holding that “de-fendants’ actions in calling Brownsville’s violations to the attention of state and federal authorities and eliciting public interest cannot serve as the basis of . . . liability”).

147 Baltimore Scrap Corp. v. David J. Joseph Co., 81 F. Supp. 2d 602, 620 (D. Md. 2000) (“Because the defendants’ behavior is protected from antitrust liability by the First Amendment under Noerr-Pennington, it is likewise protected from state common law liabil-ity.”), aff’d, 237 F.3d 394 (4th Cir. 2001).

148 Compare Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 59 (1993) (“[w]hether applying Noerr as an antitrust doctrine or invoking it in other contexts”), with Omni, 499 U.S. at 380 (noting that the Noerr-Pennington doctrine rests ulti-mately on an interpretation of antitrust laws).

149 See Pring & Canan, supra note 2, at 189. 150 See, e.g., Minn. Stat. Ann. § 554.02–.04 (West 2010).


1. State Statutory Defenses

To protect citizens who wish to participate in government, states have begun to pass anti-SLAPP legislation.151 As of early 2011, twenty-seven states have passed anti-SLAPP legislation.152 In many instances, this legislation was passed in order to provide an expedited way for the courts to deal with SLAPPs, rather than forcing SLAPP targets to deal with standard, lengthy court procedures.153 The precise workings and the scope of anti-SLAPP legislation can differ widely between states.154 The scope of state statutes protecting petitioning activity generally falls into one of several different categories. Some states follow the POME standard, protecting a SLAPP target’s petitioning activity unless the petitioning does not contain any reasonable factual support or any arguable basis in law and causes actual compensable injury to the SLAPP filer.155 These states include Arizona, Massachusetts, and Ver-mont.156 Other states, including Illinois, Minnesota, and Rhode Island, follow the Omni standard and protect petitioning activity unless the pe-titioning is not genuinely aimed at procuring favorable government action.157 A third class of states protects petitioning activity unless the SLAPP filer can show some chance of prevailing in its claim against the

151 John G. Osborn & Jeffrey A. Thaler, Maine’s Anti-SLAPP Law: Special Protection

Against Improper Lawsuits Targeting Free Speech and Petitioning, 23 Me. B.J. 32, 32 (2008). 152 See Your State’s Free Speech Protections, Publ. Participation Project, http://anti-

slapp.org/?q=node/12 (last visited Apr. 15, 2011). 153 See Johnston, supra note 97, at 279. 154 See, e.g., id. at 276–80 (discussing differing policy objectives and statutory defenses

among state anti-SLAPP laws). 155 See, e.g., Ariz. Rev. Stat. Ann. § 12-752(B) (Supp. 2010); Mass. Gen. Laws Ann.

ch. 231, § 59H (West 2000); Vt. Stat. Ann. tit. 12, § 1041(e)(1) (Supp. 2010); see also Pro-tect Our Mountain Env’t v. Dist. Court, 677 P.2d 1361, 1369 (Colo. 1984) (protecting SLAPP targets unless “(1) the [SLAPP target]’s administrative or judicial claims were de-void of reasonable factual support, or, if so supportable, lacked any cognizable basis in law for their assertion; [or] (2) the primary purpose of the [SLAPP target]’s petitioning activ-ity was to harass the [SLAPP filer] or to effectuate some other improper objective; [or] (3) the [SLAPP target]’s petitioning activity had the capacity to adversely affect a legal interest of the [SLAPP filer]”).

156 See Ariz. Rev. Stat. Ann. § 12-752(B); Mass. Gen. Laws Ann. ch. 231, § 59H; Vt. Stat. Ann. tit. 12, § 1041(e)(1).

157 See 735 Ill. Comp. Stat. Ann. 110/15 (West Supp. 2011); Minn. Stat. Ann. § 554.03 (West 2010); R.I. Gen. Laws § 9-33-2(a) (1997); see also City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 380 (1991).


SLAPP target.158 These states include California, Delaware, and Ore-gon.159 Some state anti-SLAPP statutes create an expedited process for de-termining whether the SLAPP target’s petitioning activity is protected and, if so, dismissing the SLAPP.160 Some states, such as Nevada and Oregon, allow a special motion to dismiss, which SLAPP targets can bring early in judicial proceedings in order to raise the defense that their petitioning activity is protected.161 In some states, once the SLAPP target brings a motion to dismiss, discovery is suspended and the court is required to hold a hearing on the motion within a short amount of time.162 This time frame may either be defined, such as Arkansas’ thirty days,163 or open to the court’s discretion, such as Maryland’s “as soon as practicable” standard.164 Many states award attorney’s fees and costs to a SLAPP target who prevails on a motion to dismiss.165 Some states also allow the courts to award compensatory and punitive damages to the SLAPP target.166

2. Federal Statutory Defenses

Currently there is no federal statute specifically designed to defend SLAPP targets.167 A small number of statutes protect specific uses of the right to petition,168 but comprehensive protections have yet to be passed by Congress.169 In December 2009, comprehensive anti-SLAPP legislation was introduced in the House of Representatives, but this bill appears to be stalled in committee.170 At the present, the strongest

158 See, e.g., Cal. Civ. Proc. Code § 425.16(b)(1) (West 2004); Del. Code Ann. tit. 10,

§ 8137 (1999); Or. Rev. Stat. § 31.150(3) (2009). 159 See Cal. Civ. Proc. Code § 425.16(b)(1); Del. Code Ann. tit. 10, § 8137; Or. Rev.

Stat. § 31.150(3). 160 See Johnston, supra note 97, at 280. 161 See Nev Rev. Stat. Ann. § 41.660(1)(a) (LexisNexis 2006); Or. Rev. Stat. § 31.150(1). 162 See, e.g., Ark. Code Ann. § 16-63-507(a)(1)–(2) (2005); Ind. Code Ann. § 34-7-7-6

(LexisNexis 2008). 163 Ark. Code Ann. § 1663-507(a)(2). 164 Md. Code Ann., Cts. & Jud. Proc. § 5-807(d)(1) (LexisNexis 2006). 165 See, e.g., Cal. Civ. Proc. Code § 425.16(c) (West 2004); 735 Ill. Comp. Stat. Ann.

110/25 (West Supp. 2011); Or. Rev. Stat. § 31.152(3). 166 See, e.g., Minn. Stat. Ann. § 554.04(2)(b) (West 2010). 167 See Pring & Canan, supra note 2, at 190; Trende, supra note 73, at 643–44. 168 Pring & Canan, supra note 2, at 190 (citing federal laws protecting those giving tes-

timony in federal courts and before Congress, as well as whistleblowers). 169 See id.; Trende, supra note 73, at 643–44. 170 Bill Summary & Status 111th Congress (2009–2010) H.R. 4364, Libr. of Congress, Tho-

mas, http://hdl.loc.gov/loc.uscongress/legislation.111hr4364 (last visited Apr. 15, 2010).


statutory option for SLAPP targets in federal court is to attempt to use state anti-SLAPP statutes under the Erie doctrine.171

a. Use of State Statutes in Federal Court

There is currently a circuit split as to whether state anti-SLAPP statutes can be used in federal court under the Erie doctrine.172 This split is rooted in the courts’ judgment of whether state anti-SLAPP pro-tections directly conflict with the Federal Rules of Civil Procedure.173 The Massachusetts District Court found that a dismissal provision in the Massachusetts anti-SLAPP law directly conflicted with Rule 12(b)(6) of the Federal Rules, and held that “the Federal Rules of Civil Procedure supplant the state Anti-SLAPP procedures.”174 In contrast, the Ninth Circuit Court of Appeals found that a similar provision in California’s anti-SLAPP law could exist side-by-side with the Federal Rules, “‘each controlling its own intended sphere of coverage without conflict.’”175 Therefore, the Ninth Circuit held that the statute was available to SLAPP targets in diversity actions.176 Recent decisions in federal jurisdictions that permit the use of state anti-SLAPP statutes have limited that use to state law claims on-ly.177 In 2007, the Southern District of California considered a SLAPP that alleged civil rights and conspiracy claims under 42 U.S.C. §§ 1983 and 1985.178 The court denied the SLAPP target’s special motion to strike, brought under California’s anti-SLAPP law, and held that “the

171 See Pring & Canan, supra note 2, at 190; Trende, supra note 73, at 643–44. 172 Compare United States ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d

963, 973 (9th Cir. 1999) (applying California’s anti-SLAPP statute to a federal diversity case), with Stuborn Ltd. v. Bernstein, 245 F. Supp. 2d 312, 316 (D. Mass. 2003) (holding that Massachusetts’ anti-SLAPP statute is not available in federal court).

173 Compare Newsham, 190 F.3d at 973 (not in direct conflict), with Stuborn, 245 F. Supp. 2d at 316 (direct conflict). The Erie doctrine relies on direct conflict analysis to solve procedural choice of law issues. See Walker v. Armco Steel Corp., 446 U.S. 740, 749 (1980); Hanna v. Plumer, 380 U.S. 460, 472 (1965). Under Hanna, when a state procedural rule directly collides with the Federal Rules of Civil Procedure, the Federal Rules will prevail due to their authorization by the Rules Enabling Act. 380 U.S. at 471, 473–74; see also 28 U.S.C. § 2072 (2006). In the absence of a direct collision, Erie’s twin aims of discouraging forum shopping and avoiding inequitable administration of the law govern the outcome. See Walker, 446 U.S. at 752–53; Hanna, 380 U.S. at 468, 471.

174 Stuborn, 245 F. Supp. 2d at 316 (citing Hanna, 380 U.S. at 463–65). 175 Newsham, 190 F.3d at 972 (quoting Walker, 446 U.S. at 752). 176 Id. at 973. 177 See Best v. Hendrickson Appraisal Co., No. 06-CV-1358 W( JMA), 2007 WL 1110632,

at *3 (S.D. Cal. Mar. 28, 2007); Globetrotter Software, Inc. v. Elan Computer Group, Inc., 63 F. Supp. 2d 1127, 1130 (N.D. Cal. 1999).

178 Best, 2007 WL 1110632, at *1.


[California] anti-SLAPP statute does not, in general, apply to federal claims in federal court.”179

b. Proposed Federal Legislation

In December 2009, Representative Steve Cohen introduced a fed-eral anti-SLAPP bill in the House of Representatives.180 The bill, known as the Citizen Participation Act of 2009 (the “Act”), recognizes the im-portance of public participation in government, damaging effects of SLAPP suitson that participation, and the need to identify and elimi-nate SLAPPs early.181 The Act contains broad protections for petition-ing activity, including “any written or oral statement made in a place open to the public or a public forum in connection with an issue of public interest,”182 and “any written or oral statement made or submit-ted before a legislative, executive, or judicial body, or any other official proceeding authorized by law.”183 The Act creates a special motion to dismiss that, after a prima facie showing by SLAPP targets that their pe-titioning activity was protected, shifts the burden to the SLAPP filer to demonstrate “a prima facie showing of facts to sustain a favorable judgment.”184 Once the special motion to dismiss is filed, the Act would stay discovery in the case until the motion is disposed.185 Furthermore, the Act creates federal removal jurisdiction, allowing SLAPP targets in state court to remove the case to federal court and obtain the Act’s pro-tections.186 Finally, the Act awards a reasonable attorney’s fee to SLAPP targets who prevail on the special motion to dismiss.187 Currently, the Act has garnered three cosponsors,188 but is stalled awaiting considera-

179 Id. at *3; accord Globetrotter Software, 63 F. Supp. 2d at 1130 (holding that the Califor-nia anti-SLAPP statute only applies to pendent state law claims, not federal question claims, when both are asserted in the same action).

180 Citizen Participation Act of 2009, H.R. 4364, 111th Cong. (2009). 181 See id. §§ 2, 5. 182 Id. § 11(1)(B). The Act defines an “issue of public interest” as “includ[ing] an issue

related to health or safety; environmental, economic or community well-being; the gov-ernment; a public figure; or a good, product or service in the market place,” while explic-itly excluding “statements directed primarily toward protecting the speaker’s business in-terests.” Id. § 11(5).

183 Id. § 11(2)(A). 184 Id. § 5(b). 185 H.R. 4364 § 5(c). 186 Id. § 6(a). 187 Id. § 8(a). 188 Bill Summary & Status 111th Congress (2009–2010) H.R. 4364—Cosponsors, Libr. of Con-

gress, Thomas, http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR04364:@@@P (last visited Apr. 15, 2010) (showing Representatives Charles A. Gonzalez (D-TX), Pete Stark (D-CA), and Mike Doyle (D-PA) as cosponsors).


tion by the House Judiciary Committee’s Subcommittee on Courts and Competition Policy.189

V. All Current Defenses Fail as Effective Defenses for Federal SLAPP Targets

To be effective, a SLAPP defense must cover all activity protected by the Petition Clause.190 Furthermore, a SLAPP defense must provide a way to identify SLAPPs early in the judicial process, so as to remove those SLAPPs from the judicial process, and to discourage and warn against future filing of SLAPPs.191 The best SLAPP defense will strike an appropriate balance between protecting the SLAPP itself as a manifesta-tion of the SLAPP filer’s right to petition and saving the SLAPP target from the resource-draining effects of the SLAPP.192 Since one harmful consequence of a SLAPP is its chilling effect on protected First Amend-ment activity, the best SLAPP defense will tip slightly in favor the SLAPP target in order to avoid or prevent as much of that chilling effect as pos-sible.193 The current defenses available to federal SLAPP targets are the Federal Rules of Civil Procedure, the Noerr-Pennington doctrine, and state anti-SLAPP statutes as applied in diversity actions through the Erie doctrine.194 Each of these defenses has shortfalls that prevent any of them from being as effective as well-drafted federal legislation.195

A. The Federal Rules of Civil Procedure

The Federal Rules of Civil Procedure, although available to every SLAPP target in federal court,196 fail at being an effective SLAPP de-fense because they do not allow for efficient and quick identification and elimination of SLAPPs, and because they have a very limited deter-ring effect.197

189 Id. 190 See Pring & Canan, supra note 2, at 189. 191 See id. 192 See id. at 200–01. 193 See id. at 12; Pring, supra note 6, at 8. 194 See Fed. R. Civ. P. 11, 12(b)(6), 56; City of Columbia v. Omni Outdoor Adver., Inc.,


195 See Fed. R. Civ. P. 11, 12(b)(6), 56; Omni, 499 U.S. at 379–80; Newsham, 190 F.3d at 973. 196 See Fed. R. Civ. P. 1; supra notes 103–104 and accompanying text. 197 See Fed. R. Civ. P. 11, 12(b)(6), 56.


Nonetheless, a successful Rule 12(b)(6) defense would grant a SLAPP target dismissal of the SLAPP for failure to state a claim based on the Petition Clause’s protections.198 SLAPP targets who prevail on a Rule 12(b)(6) defense would avoid much of the resource-draining effect of a SLAPP.199 Although early dismissal would keep the SLAPP target from having to waste resources on a meritless suit, the Federal Rules’ lenient pleading requirements could make it difficult for a SLAPP target to pre-vail.200 Rule 8(a)(2) requires only that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to re-lief.”201 Although the Supreme Court’s recent decision in Bell Atlantic Corp. v. Twombly could make it slightly easier for a 12(b)(6) defense to prevail by requiring that the SLAPP filer show a plausible, as opposed to a possible, entitlement to relief,202 trial judges tend to take a wait-and-see approach when faced with questions about the legitimacy of a suit.203 If, in its 12(b)(6) motion, the SLAPP target attempts to clarify the nature of the SLAPP by presenting matters outside the SLAPP filer’s pleadings, Rule 12(d) would treat the SLAPP target’s motion as one for summary judgment, which could implicate a whole new host of prob-lems for the SLAPP target’s defense.204 Rule 12(b)(6) could be an effec-tive SLAPP defense if the SLAPP filer’s pleading obviously presents itself as a SLAPP, but otherwise Rule 12(b)(6) provides only an uncertain de-fense that will likely be denied and will allow the trial to continue into the expensive discovery phase.205

A motion for summary judgment made under Rule 56(b) fails as an effective SLAPP defense for essentially the same reasons that a Rule 12(b)(6) motion fails.206 A motion for summary judgment may be made at any time until thirty days after the close of discovery.207 However, the summary judgment standard depends in part on the discovery com-pleted in the case, implying that at least some discovery, with its atten-

198 See id. 12(b)(6). 199 A Rule 12(b)(6) defense can be raised very early in the trial. See id. 12(a)–(b). A

SLAPP target who raises—and prevails upon—a 12(b)(6) defense before discovery begins will avoid much of the cost of litigation. See Ezra Friedman & Abraham L. Wickelgren, Chilling, Settlement, and the Accuracy of the Legal Process, 26 J.L. Econ. & Org. 144, 153 (2010) (“discovery is often the most costly part of litigation”).

200 See Fed. R. Civ. P. 8(a)(2). 201 Id. 202 550 U.S. 544, 570 (2007). 203 See Pring & Canan, supra note 2, at 158. 204 Fed. R. Civ. P. 12(d); see discussion infra notes 206–211. 205 See Fed. R. Civ. P. 8(a)(2), 12. 206 See id. 56. 207 Fed. R. Civ. P. 56(c)(1)(A).


dant costs, will likely take place before a motion for summary judgment can be made.208 Additionally, if the SLAPP filer shows the court that it cannot present facts essential to justify its opposition to the motion, the court may allow further discovery before ruling on the motion.209 Once a trial moves into the discovery phase, SLAPP targets are exposed to the full resource-draining effect of the SLAPP.210 Therefore, a Rule 56(b) motion for summary judgment is also an ineffective SLAPP defense.211 The Federal Rules also provide limited options for deterring the filing of future SLAPPs.212 Rule 11 authorizes courts to impose sanc-tions when a lawsuit has been brought for an improper purpose.213 These sanctions are “aimed at deterring, and, if necessary punishing improper conduct.”214 Nevertheless, in another manifestation of the Petition Clause, courts have held that Rule 11 “[s]anctions should be sparingly imposed . . . and care should be taken to avoid chilling crea-tivity or stifling enthusiasm.”215 This type of standard could lead to in-consistency in the application of sanctions against SLAPP filers, whereas effective deterrence is best achieved through consistent appli-cation of sanctions against SLAPP filers.216

B. Noerr-Pennington Doctrine

The Noerr-Pennington doctrine also fails as an effective SLAPP de-fense because of its uncertain application outside the antitrust realm.217 Although it appears to be a boon for SLAPP targets, the Noerr-Pennington doctrine is constrained by its very facts to the antitrust realm.218 In all of the major cases in which the doctrine finds root— Noerr, Pennington, and Omni—the Supreme Court held that petitioning activity that otherwise may have violated the Sherman Act was in fact

208 See id. 56(c)(2). 209 Id. 56(f)(2). 210 See Friedman & Wickelgren, supra note 199, at 153. 211 See Fed. R. Civ. P. 56. 212 See id. 11. 213 Id. 11(b)(1), (c). 214 United States ex rel. Leno v. Summit Const. Co., 892 F.2d 788, 791 n.4 (9th Cir.

1989) (internal quotation and citation omitted). 215 Guzzello v. Venteau, 789 F. Supp. 112, 118 (E.D.N.Y. 1992) (citing Secs. Indus.

Ass’n. v. Clarke, 898 F.2d 318, 322 (2d Cir. 1990)). 216 See Pring & Canan, supra note 2, at 204. 217 See id. at 28. 218 City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 369, 380 (1991) (not-

ing that the Noerr-Pennington doctrine rests ultimately on an interpretation of antitrust laws); United Mine Workers v. Pennington, 381 U.S. 657, 659 (1965); E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 129, 132 (1961).


protected under the Petition Clause.219 These holdings could arguably create a strong defense of general petitioning activity under the First Amendment, but, when limited to their facts, really only help resolve questions of conflicts between the Petition Clause and Sherman Act violations.220 Although federal courts have applied Noerr-Pennington to areas outside the antitrust realm,221 the Supreme Court has not clearly stated its willingness to invoke the doctrine in non-antitrust contexts.222 Many SLAPP targets will have to argue before a judge before they know whether the judge will determine that Noerr-Pennington covers their spe-cific petitioning activity.223 Furthermore, any argument advancing the Noerr-Pennington doctrine would likely be made as part of a motion to dismiss or motion for summary judgment, which would implicate the same problems discussed above with the Federal Rules of Civil Proce-dure in general.224

C. State Anti-SLAPP Statutes in Federal Court

The final defense available to SLAPP targets in federal court is the use of state anti-SLAPP statutes through the Erie doctrine.225 Setting aside the obvious fact that the effectiveness of this defense depends on the existence of an available state statute and the effectiveness of that statute, this defense also fails due to its inconsistent application across federal jurisdictions.226 Jurisdictional availability depends on the juris-diction’s view as to whether there is a direct conflict between the statute and the Federal Rules of Civil Procedure.227 While this split can result

219 See Omni, 499 U.S. at 379–80 (summarizing Noerr and Pennington). 220 See id. 221 See Brownsville Golden Age Nursing Home, Inc. v. Wells, 839 F.2d 155, 160 (3rd Cir.

1988) (citing Noerr-Pennington as grounds for holding that the acts of two private citizens in reporting a nursing home’s health code violations were immune from liability); Baltimore Scrap Corp. v. David J. Joseph Co., 81 F. Supp. 2d 602, 620 (D. Md. 2000) (applying Noerr-Pennington to state common law liability), aff’d, 237 F.3d 394 (4th Cir. 2001).

222 Compare Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 59 (1993) (“[w]hether applying Noerr as an antitrust doctrine or invoking it in other contexts”), with Omni, 499 U.S. at 380 (noting that the Noerr-Pennington doctrine rests ulti-mately on an interpretation of antitrust laws).

223 See Pring & Canan, supra note 2, at 28. 224 See supra Part V.A. 225 See United States ex rel. Newsham v. Lockheed Missiles & Space Co., Inc., 190 F.3d

963, 973 (9th Cir. 1999). 226 Compare id.(applying California’s anti-SLAPP statute to a federal diversity case), with

Stuborn Ltd. v. Bernstein, 245 F. Supp. 2d 312 (D. Mass. 2003) (holding that Massachu-setts’ anti-SLAPP statute is not available in federal court).

227 Compare Newsham, 190 F.3d at 973 (not in direct conflict), with Stuborn, 245 F. Supp. 2d at 316 (direct conflict).


in good news for SLAPP targets in certain federal jurisdictions, the split provides inconsistent protection of a First Amendment right.228 In ad-dition, recent decisions limiting the use of state anti-SLAPP statutes in federal jurisdictions, where such use is allowed, further diminish the effectiveness of these statutes as a defense in federal courts.229

VI. Strong Federal Legislation Is the Best Defense for Federal SLAPP Targets

Given the flaws in current federal-level SLAPP defenses, the best defense for federal SLAPP targets would be a well-drafted, comprehen-sive federal law.230 Currently there is no federal anti-SLAPP legisla-tion.231 A strong federal law can avoid the Rule 12(b)(6) and 56(b) pit-falls and limit a SLAPP target’s discovery costs by staying discovery while the court determines how to handle the SLAPP.232 A strong fed-eral law can also avoid the Noerr-Pennington uncertainty by explicitly protecting all petitioning activity that falls under the Petition Clause.233 Finally, a strong federal law can avoid the failures of state laws used un-der the Erie doctrine by providing a uniform law available to all SLAPP targets in all federal jurisdictions.234

A. Legislative Standard

Experts have identified three key points that effective anti-SLAPP legislation should address:

1. Communications: It “must cover all public advocacy and communications to government, whether direct or indirect and whether in the form of testimony, letters, reports of crime, peaceful demonstrations, or petitions.”235

228 Compare Newsham, 190 F.3d at 973 (petitioning activity protected by state anti-SLAPP

statute), with Stuborn, 245 F. Supp. 2d at 316 (petitioning activity not protected by state anti-SLAPP statute).

229 See Best v. Hendrickson Appraisal Co., No. 06-CV-1358 W( JMA), 2007 WL 1110632, at *3 (S.D. Cal. Mar. 28, 2007); Globetrotter Software, Inc. v. Elan Computer Group, Inc., 63 F. Supp. 2d 1127, 1130 (N.D. Cal. 1999).

230 See supra Part V. 231 See Trende, supra note 73, at 643–44. 232 See Pring & Canan, supra note 2, at 203. 233 See id. 234 See id. 235 Id.at 189.


2. Forums: “It must cover all government bodies and agents, whether federal, state, or local, and whether legislative, execu-tive, judicial, or the electorate.”236 3. Prevention and Cure: It “must set out an effective early re-view for filed SLAPPs, shifting the burden of proof to the filer and, in so doing, serving a clear warning against the future fil-ing of such suits.”237

Legislation that meaningfully addresses all three of these areas will ef-fectively protect SLAPP targets.

B. Critique of Currently Proposed Federal Legislation

The recently introduced Citizen Participation Act of 2009 largely succeeds in the three key areas by broadly defining protected activity and providing an expedited process for dismissing meritless SLAPPs.238 Furthermore, the Act includes additional protections which will make it available as a strategic choice to SLAPP targets in state courts.239 Never-theless, state court interpretations of state anti-SLAPP provisions with similar language to the Act indicate a potential weakness, and the pro-tections included in the Act could be further bolstered with a few key changes.240

1. Communications and Forums

The Act’s scope of protected constitutional activity is sufficiently broad to cover all Petition Clause activity.241 Legislation that effectively protects public participation in government must be sufficiently broad to cover a variety of communication in a variety of forums. The Act suf-ficiently addresses the proper communications made to the proper fo-rums.242

236 Id. 237 Id. 238 See Citizen Participation Act of 2009, H.R. 4364, 111th Cong. §§ 5, 11(1)–(2) (2009). 239 Id. § 6. 240 See, e.g., Evans v. Unkow, 45 Cal. Rptr. 2d 624, 627–28 (Ct. App. 1995). Compare Cal.

Civ. Proc. Code § 425.16(b)(1) (West 2004) (dismissing the SLAPP unless the SLAPP filer shows “that there is a probability that the [SLAPP filer] will prevail on the claim”), with H.R. 4364 § 5(b) (dismissing the SLAPP unless the SLAPP filer shows “that the [SLAPP] is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment”).

241 See H.R. 4364 § 11(1)–(2). 242 See id.


The Act protects activities in furtherance of the right of free speech and acts of petitioning the government.243 Acts in furtherance of the right of free speech include written or oral statements made in connection with an issue under review by a governmental body or other authorized proceeding or made in public on an issue of public inter-est.244 Acts of petitioning the government include written or oral state-ments made or submitted to a governmental body or other authorized proceedings that encourage such a statement.245 The language of these definitions is very broad, and neither definition is meant to provide a comprehensive list of protected activity.246 The definition of acts in fur-therance of the right of free speech also includes a catch-all clause, bringing even more activity under the Act’s protection and aligning the Act with constitutional jurisprudence.247 The Act’s scope is similar to the scope used by Professors Pring and Canan in their model anti-SLAPP legislation.248 Like the Act, the model legislation also includes within its scope “[a]cts in furtherance of the constitutional right to petition.”249 This model scope is based on the Omni ruling, and “spells out the acts or communications covered with the maximum constitutional breadth under . . . Omni.”250 The Act’s catch-all clause brings the Omni holding into its scope, and will protect petitioning activity “regardless of intent or purpose.”251

The Act also succeeds in protecting petitioning activity in all the appropriate forums.252 Protections are not limited to just one branch of government or one particular jurisdiction.253 The Act covers statements made to “legislative, executive, or judicial bod[ies], or any other official

243 Id. §§ 3, 4. 244 Id. § 11(1). 245 Id. § 11(2). 246 See id. § (11)(1),(2) (containing the comprehensive language “includes but is not

limited to”). 247 Id. § (11)(1)(C) (“any other conduct in furtherance of the exercise of the constitu-

tional right of petition or the constitutional right of free speech in connection with an issue of public interest”).

248 See Pring & Canan, supra note 2, at 203. Pring and Canan’s model legislation “melds the most effective elements of the U.S. Supreme Court’s Omni decision, the federal Model State Volunteer Service bill, and the California, New York, and Minnesota [anti-SLAPP statutes].” Id. at 201.

249 Id. at 203. 250 Id. at 205. 251 City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 380 (1991) (internal

quotation and citation omitted); see H.R. 4364 § 11(1)(C). 252 See H.R. 4364 § 11(1)–(2). 253 See id.


proceeding authorized by law,”254 as well as “the public or a public fo-rum.”255 This language effectively “cover[s] all government bodies and agents, whether federal, state, or local, and whether legislative, execu-tive, judicial, or the electorate.”256 Some states, such as Maryland, have chosen to be more explicit as to covered jurisdictions, protecting com-munications “with a federal, State, or local government body or the public at large.”257 However, there is no reason to believe that the Act’s broad language would not apply to the named government branches in any jurisdiction.

2. Prevention and Cure

The Act could be stronger at providing a judicial cure to SLAPP targets as well as discouraging SLAPPs from being filed.258 To effectively protect public participation in government, legislation “must set out an effective early review for filed SLAPPs, shifting the burden of proof to the filer and, in so doing, serving a clear warning against the future fil-ing of such suits.”259 The Act provides separate procedural protections to acts of peti-tioning the government and acts in furtherance of the constitutional right of petition or free speech.260 Acts of petitioning the government are strongly and effectively protected by the Act.261 The Act completely immunizes all acts of petitioning the government from any civil liability except those made with knowledge of falsity or reckless disregard of falsity.262 The SLAPP filer must prove knowledge of falsity or reckless disregard of falsity by clear and convincing evidence.263 The “clear and convincing” standard is very demanding.264 Therefore, nearly all acts of petitioning the government will be immune from SLAPPs.265

254 Id. 255 Id. § 11(1)(B). 256 See Pring & Canan, supra note 2, at 189. 257 See, e.g., Md. Code Ann., Cts. & Jud. Proc. § 5-807(b)(1) (LexisNexis 2006). 258 See H.R. 4364 §§ 5(b), 8(a). 259 Pring & Canan, supra note 2, at 189. 260 Compare H.R. 4364 § 3 (acts of petitioning the government), with id. § 5 (acts in fur-

therance of the constitutional right of petition or free speech). 261 See id. § 3. 262 Id. § 3(a). 263 Id. § 3(b). 264 See In re Martin, 538 N.W.2d 399, 410 (Mich. 1995) (“the clear and convincing evi-

dence standard [is] the most demanding standard applied in civil cases”). 265 See H.R. 4364 § 3.


Acts in furtherance of the constitutional right of petition or free speech are afforded separate, potentially weaker procedural protec-tions.266 The Act creates a special motion to dismiss, which contains a burden-shifting provision requiring the SLAPP target to “mak[e] a prima facie showing that the claim at issue arises from an act in fur-therance of the constitutional right of petition or free speech.”267 Once that burden is met, responsibility shifts to the SLAPP filer to show “that the claim is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment.”268 This motion protects the SLAPP target’s resources by staying discovery upon filing of the motion, as well as requiring that the motion be considered in an expedited hearing.269 The Act’s protections of acts in furtherance of the constitutional right of petition or free speech are likely weak due to the low standard imposed on the SLAPP filer.270 California’s anti-SLAPP law employs a similar standard, where the special motion to strike can be defeated if the SLAPP filer establishes a “probability” of prevailing on the SLAPP.271 California courts have interpreted this to mean that a SLAPP filer must present evidence to show that the SLAPP filer would establish a prima facie case at trial,272 which is very similar to the language used by the Act.273 Furthermore, California courts have held that the SLAPP filer’s right to a jury trial prevents the court from weighing this evidence.274 This has created a “very easy standard of proof for [SLAPP] filers.”275 If the Act is interpreted in a similar way, this easy standard of proof could

266 See id. § 5. These separate procedural protections, markedly different from the

complete immunization from liability that protects acts of petitioning the government, doubtless stem from the more public nature, by the Act’s own definition, of acts in fur-therance of the right of free speech. Compare id. § 11(2), with id. § 11(1).

267 Id. § 5(a)–(b). 268 Id. § 5(b). 269 See id. § 5(c)–(d). 270 See Evans v. Unkow, 45 Cal. Rptr. 2d 624, 627–28 (Ct. App. 1995); see also Church of

Scientology v. Wollersheim, 49 Cal. Rptr. 2d 620, 635 (Ct. App. 1996), overruled on other grounds by Equilon Enters. v. Consumer Cause, Inc., 52 P.3d 685 (Cal. 2002).

271 Cal. Civ. Proc. Code § 425.16(b)(1) (West 2004). 272 Evans, 45 Cal. Rptr. 2d at 627–28. 273 See H.R. 4364 § 5(b) (“[T]he burden shifts to the [SLAPP filer] to demonstrate that

the claim is . . . supported by a sufficient prima facie showing of facts to sustain a favorable judgment.”).

274 Wollersheim, 49 Cal. Rptr. 2d at 635. 275 Pring & Canan, supra note 2, at 198.


transfer to the federal courts and weaken the Act’s utility as a SLAPP defense.276 The Act would be stronger if it followed Pring and Canan’s model anti-SLAPP legislation.277 The model legislation does not contain any provision for considering the SLAPP filer’s ability to prevail on the SLAPP at trial.278 The only way a SLAPP filer can defeat a motion to dispose of the SLAPP under the model legislation is by producing “clear and convincing evidence that the acts of the [SLAPP target] are not immunized from liability.”279 This affords a very strong defense to SLAPP targets because it unconditionally protects all petitioning activity that falls within the model legislation’s scope.280 The Act could also be more effective at deterring SLAPP filings.281 SLAPP targets who prevail on a special motion to dismiss under the Act will only be awarded reasonable attorney fees and costs.282 Although the Act makes these fees and costs nondischargeable in bankruptcy,283 the Act could further strengthen its deterrent effect by allowing addi-tional monetary judgments against SLAPP filers.284 Minnesota’s anti-SLAPP law requires courts to award actual damages upon a showing of injury by the SLAPP target and allows courts to award punitive damages as well.285 Pring and Canan’s model legislation allows courts to impose sanctions “sufficient to deter repetition of such conduct and compara-ble conduct by others similarly situated,” and also enables injured SLAPP targets to seek compensatory and punitive damages.286

3. Other Benefits of the Act

In addition to its efforts to address communications and forums, and serve both as a prevention and cure of SLAPPs, the Act includes additional benefits for SLAPP targets.287 Perhaps the Act’s strongest benefit is the freedom it affords a SLAPP target to remove from state

276 See Wollersheim, 49 Cal. Rptr. 2d at 635; Evans, 45 Cal. Rptr. 2d at 627–28; H.R. 4364

§ 5(b). 277 See Pring & Canan, supra note 2, at 203. 278 See id. 279 Id. 280 See id. 281 See H.R. 4364 § 8. 282 Id. § 8(a). 283 Id. § 9. 284 See Pring & Canan, supra note 2, at 204. 285 Minn. Stat. Ann. § 554.04(2)(b) (West 2010). 286 Pring & Canan, supra note 2, at 204. 287 See H.R. 4364 § 6–7.


court to federal court, provided that the SLAPP target’s speech activi-ties would otherwise fall within the scope of the Act.288 Removal juris-diction is generally only allowed in cases brought in state court where the federal district courts have original jurisdiction.289 Therefore, the target of a SLAPP that masquerades as a state common law claim and is brought by a filer whose citizenship is not diverse from that of the tar-get would typically be “trapped” in state court.290 Such a SLAPP target would be at the mercy of that particular state’s chosen method—or lack thereof—of SLAPP protection.291 However, all participants in protected First Amendment activity as defined by the Act would be able to remove a state case to federal court and obtain the Act’s procedural protec-tions.292 This removal jurisdiction would be available regardless of the presence of complete diversity among the parties to the SLAPP, and regardless of the presence of a federal question.293 The Act’s removal jurisdiction would be available as an option for the SLAPP targets, al-lowing targets who prefer the options available in state court to remain there as a strategic choice.294 There is no parallel provision to allow the SLAPP filer to transfer the lawsuit into federal court;295 as the plaintiff in the SLAPP suit, the filer presumably already had first choice as to the venue in which to file.296

Conclusion

SLAPPs are insidious lawsuits brought to interfere with a party’s constitutionally protected right.297 Without an appropriate defense, SLAPP targets will likely suffer the resource-draining effects of a SLAPP, as well as experience a chilling effect on their right to petition.298 SLAPP targets in the environmental realm are especially vulnerable due

288 Id. § 6(a). 289 28 U.S.C. § 1441(a) (2006). 290 See 28 U.S.C. §§ 1331–1332, 1441(a) (2006). 291 See supra Part IV.C.1. 292 See H.R. 4364 § 6(a). 293 Compare id., with 28 U.S.C. §§ 1331, 1332. 294 See H.R. 4364 § 6(a). 295 See H.R. 4364. 296 See Jamelle C. Sharpe, Beyond Borders: Disassembling the State-Based Model of Federal Fo-

rum Fairness, 30 Cardozo L. Rev. 2897, 2898 (2009) (“[P]laintiffs . . . have the first-mover advantage in choosing the forum in which their civil suits will be litigated.”).

297 See Canan & Pring, supra note 3, at 506. 298 See Pring & Canan, supra note 2, at 189; Pring, supra note 6, at 8.


to the prevalence of citizen and NGO participation in environmental enforcement.299 Many defenses exist that a federal SLAPP target could use on its behalf.300 However, none of these defenses are entirely effective at both shielding the SLAPP target and deterring future SLAPPs.301 The best and most effective defense for a federal SLAPP target would be well-drafted, comprehensive federal anti-SLAPP legislation.302 The Citizen Participation Act of 2009 would provide strong protections for many federal SLAPP targets and is far more effective than any of the current defenses.303 Congress should pass this legislation incorporating the changes suggested in this Note in order to guarantee that citizen and NGO enforcers of environmental laws are effectively protected in their petitioning activity.

299 See Plater, et al., supra note 39, at 398; Pring & Canan, supra note 2, at 83. 300 See supra Part IV. 301 See supra Part V. 302 See supra Part VI. 303 See Citizen Participation Act of 2009, H.R. 4364, 111th Cong. (2009); supra Part VI.

INSERTED BLANK PAGE

ENDOCRINE-DISRUPTING CHEMICALS: TESTING TO PROTECT FUTURE

GENERATIONS

Alana Van der Mude*

Abstract: Endocrine-disrupting chemicals (EDCs) are chemicals that inter-fere with human hormone processes. EDCs are omnipresent: pesticides, plastics, and drugs, among other common chemicals, all demonstrate en-docrine-disrupting properties. Scientific studies have demonstrated the frightening effects EDCs have on human health, particularly for fetuses while they develop in utero. Given these health concerns, Congress passed the Food Quality Protection Act of 1996, which requires the EPA to test pes-ticides for their endocrine-disrupting properties. Frustratingly this testing, fifteen years later, has still not begun. Therefore this Note argues that citi-zens should bring suit under the Administrative Procedure Act to compel EPA to complete testing of pesticides for endocrine-disrupting properties, all with the goal of furthering effective regulation of EDCs.

Introduction

The ultimate success of this reform will rest with the professionalism and the common sense of the Environmental Protection Agency. Congress will be watching closely as we try to implement these reforms. We will, to ensure that science, not emotion, is the basis of pesticide regulation.1

The synthetic estrogen drug, DES, is one of many known endo-crine-disrupting chemicals, and an infamous example of why these chemicals need to be tested and regulated.2 In the late 1960s, an un-usual cluster of clear-cell adenocarcinoma—a rare form of vaginal can-cer—appeared in Boston.3 Doctors were particularly concerned not only because clear-cell adenocarcinoma is an incredibly unusual form of cancer, but also because the women diagnosed were all under twen-

* Editor in Chief, Boston College Environmental Affairs Law Review, 2010–11. 1 142 Cong. Rec. 18,588 (1996). 2 See Theo Colborn et al., Our Stolen Future: Are We Threatening Our Fertility,

Intelligence, and Survival?—A Scientific Detective Story 67 (Plume 1997) (1996). 3 Id. at 55.

509


ty-two years old, when this cancer was previously reported predomi-nantly in elderly women.4 Researchers struggled to find a link between the cancers until they discovered that seven of the eight women’s mothers took the drug DES while pregnant.5 Now that scientists were alerted to the potentially carcinogenic ef-fects of DES on children in utero, they began to study the affects of DES in mice studies and compare those to humans exposed to DES in utero.6 Evidence from animal studies, and from studies monitoring the health of DES offspring, shows that DES children are at greater risk for a startling array of health ills: gross abnormalities in the shape and size of cervix and uteri; stunted penises and testes in sons; ectopic pregnan-cies, miscarriages, and premature births in daughters; higher risk of prostate and breast cancers; and infertility in both sons and daughters.7 Endocrine-disrupting chemicals (EDCs) are chemicals, like DES, that interfere with human hormone processes.8 Endocrine disruptors have been linked to a litany of health harms, ranging from reproduc-tive abnormalities to metabolic disorders like insulin resistance, type 2 diabetes, and obesity.9 Additionally, EDC exposure in the womb has a disproportionately large affect on fetuses’ immediate and long-term health compared to EDC exposure in grown adults.10 While there are on-going scientific studies on DES, there has been far too little scien-tific study of the potentially 87,000 chemicals that are also endocrine disruptors.11 This leaves society without enough information to deter-mine whether or not to restrict the use of EDCs.12

4 Id. at 54–55; Ctrs. for Disease Control & Prevention, DES: Yesterday, Today,

Tomorrow 1 (n.d.), available at http://www.cdc.gov/DES/consumers/download/know2_ des.pdf.

5 See Colborn et al., supra note 2, at 55. Diesthylstilbestrol (DES), the first man-made estrogen, was developed in 1938. Id. 47–48. DES was immediately seen as a wonder drug for pregnant women, especially those at risk of miscarriage. Id. DES was widely prescribed be-tween 1938 and 1971, initially to suppress miscarriage and later for other uses. Id.

6 See id. at 58–59. 7 Id. at 59; Ctrs. for Disease Control & Prevention, supra note 4, at 3. 8 Colborn et al., supra note 2, at xv. 9 Al Gore, Foreward to id. at vii; Noah Sachs, Blocked Pathways: Potential Legal Responses to

Endocrine Disrupting Chemicals, 24 Colum. J. Envtl. L. 289, 290 (1999); Living on Earth: Bisphenol A on the Burner (Public Radio International broadcast Aug. 3, 2007) [hereinafter Living on Earth], available at http://www.loe.org/shows/segments.html?programID=07-P13- 00031&segmentID=4 (interviewing two major endocrine disruption researchers, Dr. Ana Soto of Tufts University and Retha Newbold of the National Institute of Environmental Health Sciences, explaining their research into DES and BPA).

10 See Colborn et al., supra note 2, at 73–74. 11 See Sachs, supra note 9, at 302–03, 306. 12 See id.

2011] Testing & Regulating Endocrine-Disrupting Chemicals 511

In 1996, Congress recognized this concern and amended the Food, Drug, and Cosmetic Act to require the Environmental Protection Agency (EPA) to test all pesticides to determine their effects on the en-docrine, or hormone, system.13 Although Congress gave EPA a strict three-year deadline to conduct these pesticide studies, EPA only began to mandate testing in 2009—ten years after its original deadline passed.14 Additionally, and most disturbingly, EPA’s testing policy allows pesticide companies to submit outdated testing data,15 data that in many cases is specifically designed to show these chemicals are safe.16 If EPA accepts outdated testing data instead of requiring new testing, pesticide companies will be allowed to side-step Congress’s explicit mandate that pesticides are to be tested for endocrine effects.17 If EPA does not force chemical companies to comply with new testing procedures it will fail to achieve the “ultimate purpose of the [testing program, which is] to pro-vide information to the Agency that will allow the Agency to evaluate the risks associated with the use of a chemical and take appropriate steps to mitigate any risks.”18 If EPA fails to understand and properly mitigate risks from EDCs, society will continue to be exposed to potentially harmful chemicals on a daily basis.19 The purpose of this Note is to show that if EPA accepts outdated testing data, it will exceed its statutory authority, or alternatively, accept-ing outdated test data is an arbitrary and capricious action.20 Congress in no uncertain terms dictated that EPA shall establish an endocrine testing program and shall test all pesticide chemicals under the testing program.21 However, EPA promulgated a testing order that potentially allows pesticide producers to submit outdated, inaccurate data.22 This Note argues, therefore, if EPA accepts outdated testing data, a review-

13 Food Quality Protection Act of 1996, Pub. L. No. 104-170, 110 Stat. 1489 (codified as

amended at 21 U.S.C. § 346a(p) (2006)); Colborn et al., supra note 2, at xvi. 14 Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 346a(p)(7) (2006); see Endo-

crine Disruptor Screening Program; Tier 1 Screening Order Issuing Announcement, 74 Fed. Reg. 54,422, 54,425 (Oct. 21, 2009) [hereinafter Testing Order].

15 See Testing Order, supra note 14, at 54,427. 16 Alexander C. Hart, Worries on Old Toxicity Data, L.A. Times, Oct. 17, 2009, at A18

(“The order . . . would allow the pesticide makers to selectively submit outdated studies that show the pesticides are safe.”).

17 See 21 U.S.C. § 346a(p). 18 Endocrine Disruptor Screening Program; Policies and Procedures for Initial Screen-

ing, 74 Fed. Reg. 17,560, 17,561 (Apr. 15, 2009) [hereinafter Testing Policies]. 19 See Colborn et al., supra note 2, at 110, 219. 20 See Administrative Procedure Act, 5 U.S.C. § 706(2)(A), (C) (2006). 21 21 U.S.C. § 346a(p). 22 See Testing Order, supra note 14, at 54,427.


ing court must set aside the provision of the testing order allowing in-dustry to submit old testing data in place of conducting new testing.23 Furthermore, this Note argues that testing is an important first step, and should be extended to non-pesticide EDCs, but these chemicals must be properly regulated once EPA receives testing information. Part I of this Note further explains what endocrine-disrupting chemicals are and enumerates their potential health harms.24 Part II explains the current statutory and regulatory framework for testing chemical effects on the endocrine system.25 Part III argues that the Administrative Procedure Act provides a tool for challenging EPA’s fi-nal agency action as either in excess of statutory authority, or alterna-tively, as arbitrary and capricious.26 Part IV identifies potential avenues for regulating EDCs that are found to negatively affect human health.27

I. Endocrine-Disrupting Chemicals

EDCs include a wide-ranging group of man-made as well as natu-rally occurring compounds that “trick the body and disrupt its own chemical messengers.”28 People absorb and store EDCs in small doses from many common sources every day.29 Small amounts of these chemicals are in everything from drinking water to plastics used for water bottles and food storage. Atrazine, an herbicide used widely on crops, golf courses, and lawns, is now among the most common pollut-ants in drinking water.30 Bisphenol-A (BPA) is one of the most com-monly used chemicals in plastics in the United States.31 EDCs were previously considered benign because people are ex-posed to doses well below those that are fatal or known to cause can-cer.32 However, scientific studies are beginning to show these chemicals are, counter-intuitively, often more dangerous in lower doses than in

23 See 5 U.S.C. § 706(2)(A), (C). 24 See infra Part I. 25 See infra Part II. 26 See infra Part III. 27 See infra Part IV. 28 Colborn et al., supra note 2, at 68. 29 See generally Rachel Carson, Elixirs of Death, in Silent Spring 15–37 (Houghton

Mifflin 1994) (1962) (explaining the omnipresence of chemicals in the environment, and the storage and latency of DDT and other chemicals in the human body).

30 Charles Duhigg, Debating How Much Weed Killer Is Safe in Your Water Glass, N.Y. Times, Aug. 23, 2009, at A1.

31 Sachs, supra note 9, at 305. 32 See Colborn et al., supra note 2, at 205.


massive doses.33 Scientists do not fully understand why small doses of EDCs can have greater ill effects than larger doses, especially because scientists generally expect that chemicals follow the adage “the dose makes the poison.”34 Nonetheless, it is clear that the body can be tricked into action by a hormone or hormone-mimicker at low doses, but as hormone levels rise the system eventually shuts off, thus stopping any ill effect.35 Additionally, it is clear that when it comes to endocrine disrup-tors, the timing of exposure can have far more impact than the size of the dose.36 This is why exposure to EDCs in the womb can have such a large impact on the health of a developing fetus, especially when EDC exposure occurs at certain points in fetal development.37 A fetus ex-posed to an EDC after sexual differentiation or other major develop-mental milestone may suffer no ill effects, while a fetus exposed at cru-cial points in development may be permanently harmed.38 Endocrine disruptors are linked to a wide range of maladies. Among other ill effects, EDCs can potentially cause infertility, obesity, immune disorders such as type 2 diabetes, and cancers.39 Although these disorders are wide-ranging, they all have a common link: these diseases affect components of the endocrine system.40

A. The Endocrine System and Hormones

The endocrine system, along with the immune and nervous sys-tems, is one of the major regulating and integrating systems in the hu-man body.41 The endocrine system is composed of hormone-secreting glands including the pituitary, thyroid, and pancreas, among others.42 Hormones regulate many of the body’s most important functions, in-cluding metabolism, blood pressure, developmental mechanisms, and the nervous system.43 Hormones travel through the blood stream to

33 Id. 34 Id. 35 Id. at 206. 36 Id. 37 See id. at 43, 62. 38 See Colborn et al., supra note 2, at 43, 62. 39 See Sachs, supra note 9, at 290; Living on Earth, supra note 9. 40 See Sachs, supra note 9, at 290; Living on Earth, supra note 9. 41 Risk Assessment Forum, EPA, Special Report on Environmental Endocrine

Disruption: An Effects Assessment and Analysis 2 (1997) [hereinafter EPA Study], available at http://www.p2pays.org/ref/07/06070.pdf.

42 Id. 43 Id.


hormone receptors.44 Once bonded to those receptors, hormones ex-ert their influence and can cause systemic changes.45 Endocrine disrup-tors can interfere with our endocrine system in many different ways.46 EDCs can mimic our natural hormones and bond with receptors in or-gans and tissues, interfere with receptor bonding, or enhance or inhibit naturally occurring hormones.47 EDCs’ interruption of normal hor-mone functions can cause a cascade of effects.48 Additionally, and crucially, glands excrete hormones that act in infinitesimally small doses, registering as low as parts-per-trillion con-centration in the bloodstream.49 Therefore, it potentially only takes a tiny amount of a hormone or hormone-mimicker to affect huge changes in our bodies, particularly at crucial points in development.50 EDCs therefore have a significantly more pronounced effect on fetuses than on adults, and correspondingly “[t]here are . . . concerns that ex-posure to low doses of certain chemicals at critical stages in organ de-velopment can result in abnormalities that lead to irreversible changes in the functioning of organ systems later in life.”51 Hormones in the womb are responsible for permanently programming cells, organs, the brain, and behavior, profoundly influencing physical and mental char-acteristics of the developing fetus.52 The consequences of malfunctioning hormones in the womb can appear immediately after birth, as physical deformities, but also in long-term diseases that arise well into adulthood.53 For example, chil-dren whose mothers took the synthetic estrogen drug DES during pregnancy were not only born with physical abnormalities that were evident at birth,54 they also were at greater risk for different kinds of

44 Id. 45 See id. 46 See Colborn et al., supra note 2, at xvi. 47 See Sachs, supra note 9, at 293 (describing the ways in which EDCs can interfere with

normal hormone function). 48 See id. 49 Colborn et al., supra note 2, at 40. 50 See id. at 40–42. 51 Nat’l Research Council, Nat’l Academies, Hormonally Active Agents in the

Environment 119 (1999) [hereinafter NRC Report], available at http://www.nap.edu/open book.php?record_id=6029&page=R1.

52 Colborn et al., supra note 2, at 39–40. 53 Id. at 57–58. 54 Id. at 59.


cancer, auto-immune diseases, and depression later in life.55 On-going research is discovering other long-range harms.56

B. Some Common Endocrine-Disrupting Chemicals

Many common chemicals are known or suspected to interact with the endocrine system, and thus are in the family of endocrine disrup-tors.57 Some of the most common classes of EDCs are described below.

1. Pharmaceuticals

Drugs like DES are designed specifically to mimic hormones.58 There is popular concern that excess estrogen from birth-control pills, which are a synthetic version of estrogen and progestin, makes its way out of women’s bodies, into wastewater treatment plants, and out into major water bodies.59 However, estrogen from drugs used in humans accounts for approximately one percent of estrogen in the environ-ment.60 Meanwhile, approximately ninety percent of estrogen in the environment comes from livestock operations.61 This is the result of injecting livestock with growth hormones and leaving hormone-rich manure untreated, which runs into surface and ground waters.62 Re-gardless of the direct source, estrogenic pharmaceuticals are a signifi-cant source of endocrine disruptors in the environment.63

2. Estrogenic Additives

Compounds with estrogenic effects are widely used in detergents, paints, herbicides, pesticides, and cosmetics.64 These chemicals are washed out of our homes and off our lawns in huge quantities.65 Estro-

55 Id. at 62, 63, 65. See generally Ctrs. for Disease Control & Prevention, Recent

DES Research (n.d.), available at http://www.cdc.gov/DES/consumers/download/learn-ing2_research.pdf.

56 See id. 57 See id. 58 Colborn et al., supra note 2, at 48. 59 See id. at 133; Nicholas D. Kristoff, It’s Time to Learn from Frogs, N.Y. Times, June 28,

2009, at WK9. 60 Endocrine Disrupting Compounds and Intersex Fish, UCSF Program Reprod. Health &

Env’t, http://prhe.ucsf.edu/prhe/learn/kristof_edcs.html (last visited Apr. 15, 2011). 61 Id. 62 Id.; Ariele Lessing, Killing Us Softly: How Sub-Theraputic Dosing of Livestock Causes Drug-

Resistant Bacteria in Humans, 37 B.C. Envtl Aff. L. Rev. 463, 467–68 (2010). 63 See id. 64 Colborn et al., supra note 2, at 129; Sachs, supra note 9, at 304. 65 See Sachs, supra note 9, at 304.


genic additives that wash away either pass through water treatment sys-tems or run directly into surface and ground waters, often polluting water bodies with high concentrations of estrogenic additives.66 These water bodies then serve as drinking water sources.67 These estrogenic additives have shown serious endocrine effects in fish. When govern-ment fisheries staff in England discovered that fish near the outfalls of wastewater treatment plants exhibit both male and female characteris-tics, referred to as “intersex,” they investigated the source of the fishes’ sexual confusion.68 The major culprit turned out to be the detergents we use to clean our clothes and houses, which breaks down into the alkylphenol family of chemicals that act as estrogen mimickers.69

3. Pesticides

Endocrine-disrupting pesticides include infamous compounds such as DDT and kepone.70 DDT was banned as a general use pesticide in the United States in 1972,71 but is still manufactured for sale over-seas.72 However, DDT and other pesticides persist in the U.S. environ-ment because they build up and remain stored in the fatty deposits of wildlife and humans.73 This means that organisms further up the predatory food chain have larger concentrations of DDT in their sys-tems.74 Though DDT is banned as a pesticide, many pesticides still used on crops have similar impacts: heightening estrogen effects in the body while suppressing testosterone function.75

4. Industrial Chemicals

This class of suspected endocrine disruptors includes polychlori-nated biphenyls (PCBs), which were used as heat transfer and hydraulic fluids, adhesives, and flame retardants among other purposes.76 Con-gress banned production of most PCBs in 1976, but similar to DDT, PCBs

66 See Colborn et al., supra note 2, at 129; Sachs, supra note 9, at 304. 67 See Colborn et al., supra note 2, at 129; Sachs, supra note 9, at 304. 68 Colborn et al., supra note 2, at 132. 69 See id. at 134. 70 See Sachs, supra note 9, at 303. 71 Press Release, EPA, DDT Ban Takes Effect (Dec. 31, 1972), available at http://www.

epa.gov/history/topics/ddt/01.htm. 72 See id. 73 Carson, supra note 29, at 24, 48, 108. 74 Id. at 48. 75 See Sachs, supra note 9, at 303. 76 Id. at 304.


persist in the environment and bio-accumulate in the food chain.77 PCBs are particularly prevalent in fish that live in contaminated waters.78

5. Bisphenol-A (BPA)

BPA has gained national recognition in the past three years.79 BPA, a “strong and resilient plastic,” is one of the highest production volume EDCs because it is used in a wide variety of products.80 BPA is used in plastic water bottles—including the popular Nalgene brand, which has recently switched to non-BPA plastics—contact lenses, baby bottles, and as a liner for many canned food products including infant formula.81 BPA has been shown to interfere with hormone activity at very low lev-els, and there is concern that BPA causes an increase in prostate cancer, breast cancer, early onset of puberty in girls, and neurobehavioral prob-lems.82

C. Endocrine Disruption in Humans

There is a paucity of scientific studies directly linking EDCs to hu-man health effects, which is precisely why Congress directed EPA to implement a testing program.83 To date, EPA has not conducted any endocrine chemical testing, and independent scientists have only stud-ied the human health effects of select endocrine disruptors, among them BPA.84 This is primarily because BPA is used in so many products that exposure to BPA is nearly universal.85 A recent study by the Cen-ters for Disease Control and Prevention found that ninety-five percent of people tested have traces of BPA in their urine.86 Additionally, a re-cent study commissioned by the Environmental Working Group found that nine out of every ten samples of blood taken from umbilical cords

77 Id. at 304; Colborn et al., supra note 2, at 27. 78 Sachs, supra note 9, at 304. 79 Editorial, Heightened Concern over BPA, N.Y. Times, Jan. 21, 2010, at A38. 80 See Living on Earth, supra note 9. 81 Sachs, supra note 9, at 305; Living on Earth, supra note 9; Elaine Shannon, BPA: Why

Are We Still Easting This Stuff?, Envtl. Working Group (Jan. 18, 2010), http://www.ewg. org/kid-safe-chemicals-act-blog/2010/01/bpa-why-are-we-still-eating-this-stuff/.

82 See Living on Earth, supra note 9. 83 Sachs, supra note 9, at 306; see Federal Food, Drug, and Cosmetic Act, 21 U.S.C.

§ 346a(p)(2006). 84 See Testing Order, supra note 14, at 54,427; Living on Earth, supra note 9. 85 See supra Part I.B.5. 86 Living on Earth, supra note 9.


of newborn babies shows BPA contamination.87 The effect of endocrine disruption on fetal development is much greater than in adults, and can lead to both immediate and life-long health consequences for an exposed fetus.88 Although it is challenging to establish a causal link be-tween exposure to endocrine disruption and specific outcomes in hu-mans, scientific studies have shown a strong association between BPA and many health effects: cognitive and behavioral impairments, repro-ductive system abnormalities, obesity, and some cancers.89 Additionally, scientists have found a parallel between BPA and DES exposure, be-cause both cause cystic ovaries and uterine fibroids.90 DES is fairly unique case study because it provides one of the few clear, direct causal links between EDCs and human health effects.91 Of course, the unintended experiment with human health came with seri-ous health consequences for DES-exposed offspring.92 Animal studies are a useful addition to epidemiological studies on EDC effects in hu-mans. Animal studies can aid in defining causal links, and potentially have much to teach us about endocrine disruption in humans.

D. Endocrine Disruption in Animals

Although there is concern in inferring human effects from endo-crine disruption observed in animals, there is good reason to consider animal studies when trying to understand EDC’s effect on humans.93 The most important reason comes from DES and BPA studies in mice.94 Once concerns about DES and BPA arose, scientists began con-trolled mouse studies to isolate cause and effect of administering these endocrine disruptors to mice in utero.95 As researcher Retha Newbold stated, “[human health effects] are things that we actually predicted with [DES] animal studies.”96 Another researcher who conducted DES mouse studies, John McLachlan,

87 See Envtl. Working Group, Pollution in People: Cord Blood Contaminants

in Minority Newborns 8 (2009), available at http://www.ewg.org/files/2009-Minority-Cord-Blood-Report.pdf.

88 See supra Part I.A. 89 Sachs, supra note 9, at 306; Living on Earth, supra note 9. 90 Living on Earth, supra note 9. 91 See supra Introduction. 92 See supra notes 5–7 and accompanying text. 93 See Sachs, supra note 9, at 293–94. 94 See Colborn et al., supra note 2, at 58–59; Living on Earth, supra note 9. 95 See Colborn et al., supra note 2, at 58–59; Living on Earth, supra note 9. 96 Living on Earth, supra note 9.


kept in close touch with Dr. Arthur “Hap” Haney, a physician . . . who was treating humans exposed to DES. Time and time again, McLachlan would find something in a mouse and dis-cover, when he called Haney, that the physician had seen the same problem in humans as well. Once in a while, the mouse findings would signal problems long before they emerged in humans.97

Accordingly, endocrine effects in animals are often predictors of endo-crine effects in humans.98 There are also many startling examples of endocrine disruption in wild animals that warn of potential endocrine effects in humans.99 For example, the effect of DDT on bird species gained widespread recogni-tion with Rachel Carson’s seminal 1962 book, Silent Spring.100 Carson described scientific studies that showed striking examples of EDC bio-accumulation in robin populations.101 The high levels of DDT in bird testes and ovaries led to females who either could not lay eggs at all or laid eggs that were so defective that they did not hatch.102 The BPA and DES mouse studies showed that endocrine disrup-tion in animals can often predict the course of endocrine disruption in humans.103 Additionally, the DDT robin observations should serve as a warning about potential endocrine effects in humans.104 Some of these particular studies are only of limited use, because they served their pur-pose—DES is no longer sold, and DDT is now banned as a general use pesticide.105 Nonetheless, BPA remains in heavy use in the United States, regardless of the scary science that has emerged regarding BPA’s endocrine effects.106 Therefore, it is important to expand research and learn more about the affects of other EDCs that humans more com-monly encounter on a daily basis.107

97 Colborn et al., supra note 2, at 59. 98 See id. 99 See Carson, supra note 29, at 103–27 (chronicling the effects of EDCs on robins and

eagles). 100 See generally id. (discussing the widespread use of DDT and its effect on bird species). 101 See id. at 107–09. 102 See id. at 108–09. 103 See Colborn et al., supra note 2, at 59. 104 See id. 105 Supra Part I.B.3. 106 See supra notes 80 and 96 and accompanying text. 107 See Sachs, supra note 9, at 302–03.


E. Implications for Regulations

Existing science has begun to show that two key issues impact how EDCs affect animals and humans. First, when exposure occurs can make a big difference, especially if EDC exposure occurs during key stages of fetal development.108 Therefore, it is crucial for future research

to focus not only on direct mortality, but also on the far more common, but less easily measured, sublethal effects of endo-crine disruption which may have detrimental consequences to populations in the long-term (and especially as these disrup-tions occur to embryos, adversely affecting the organization of the reproductive, immune, or nervous systems).109

Second, how much of an endocrine disruptor is needed to affect change can vary, and the effects of the same EDC can change when exposure occurs at different doses.110 In fact, “testing with very high doses will miss some effects that would show up if the animals were given lower doses.”111 Therefore, it is important to test the same EDC at different doses, in order to understand what changes it causes at different doses.112 It is crucial to learn more about the relationship between dose-response, and timing of exposure and response, in order to properly police human exposure to EDCs through legislation and regulation.113

II. The Statutory and Regulatory Framework for Testing Endocrine-Disrupting Chemicals

Existing science shows that EDCs are a threat to human health and the environment.114 However, more specific scientific studies are needed in order to have a comprehensive picture of which chemicals are endocrine disruptors, and at what doses and in what manner these

108 See Colborn et al., supra note 2, at 62 (“Women whose mothers took DES after the

twentieth week of pregnancy do not suffer from the reproductive tract deformities, while those exposed before the tenth week of pregnancy have a greater chance of developing vaginal or cervical cancer.”).

109 EPA Study, supra note 41, at 67. 110 See Pete Meyers & Wendy Hessler, Does “the Dose Make the Poison?” 1 (2007),

available at http://www.ourstolenfuture.org/newscience/lowdose/2007/2007-0525nmdrc.html (showing that mice exposed to DES at one part per billion grow to be grossly obese, while mice exposed to DES at 100 parts per billion are scrawny as adults.).

111 Colborn et al., supra note 2, at 170. 112 See Meyers & Hessler, supra note 110, at 2–3. 113 See id. at 4. 114 See, e.g., Colborn et al., supra note 2, at 52–61 (explaining the wide-ranging ef-

fects of DES to fetuses exposed to DES in the womb).


chemicals act as endocrine disruptors in fetal, child, and adult hu-mans.115 Partially in recognition of this issue, Congress passed the Food Quality Protection Act of 1996, which requires EPA to test pesticide chemicals for endocrine-disrupting properties, and regulate those pesti-cides accordingly.116

A. The Estrogenic Substances Screening Program

The Food Quality Protection Act was designed to reform pesticide regulation and evaluate tolerances for pesticide residue in foods.117 Motivated by the recent widespread attention to endocrine disruption following the publication of Our Stolen Future,118 Congress included a provision in the Food Quality Protection Act to establish an endocrine screening program under the Federal Food, Drug, and Cosmetic Act.119

1. Structure of the Estrogenic Substances Screening Program

The Estrogenic Substances Screening Program under the Federal Food, Drug, and Cosmetic Act directs EPA to establish a testing program to determine if certain substances have endocrine effects.120 Specifically, it requires that the Administrator of the EPA “provide for the testing of all pesticide chemicals” for endocrine effects,121 and gives the Adminis-trator discretion to test any other substance that “may have an effect that is cumulative to an effect of a pesticide” if a “substantial population” is exposed to the substance.122 Therefore, although the Administrator is not required to test chemicals beyond pesticides, she is allowed discre-tion to test other substances with similar effects that reach a wide popu-lation, for example, BPA.123 Additionally, although limited, Congress did give EPA enforcement mechanisms to obtain test results from anyone ordered to test a pesticide who fails to do so.124

115 See id. at 73–74; Sachs, supra note 9, at 300. 116 Food Quality Protection Act of 1996, Pub. L. No. 104-170, 110 Stat. 1489 (codified

as amended in 21 U.S.C. § 346a(p) (2006)). 117 142 Cong. Rec. 18,588 (1996). 118 See, e.g., Colborn et al., supra note 2, at xv–xvi. 119 See 21 U.S.C. § 346a(p). 120 Id. § 346a(p)(1). 121 Id. § 346a(p)(3)(A). 122 Id. § 346a(p)(3)(B). 123 See id.; supra Part II.B.5. 124 21 U.S.C. § 346a(p)(5)(C)–(D).


2. Enforcement Mechanisms Under the Screening Program

The screening program does specifically provide sanctions against parties that refuse to comply with testing procedures for suspected EDCs.125 The statute allows EPA to suspend the sale or distribution of a pesticide with a thirty day notice if the manufacturer of the substance refuses to comply with a testing order.126 Additionally, parties other than pesticide registrants who fail to comply with testing orders—most likely non-pesticide producing parties who are required to provide data or conduct testing under the screening program—can be penalized under the Toxic Substances Control Act, which carries civil penalties up to $25,000.127

B. Endocrine Disruptor Screening and Testing Advisory Committee

While Congress granted the EPA Administrator wide latitude in determining which substances to test and in designing the screening program, it kept EPA to a very tight timetable.128 Congress only gave EPA two years to develop the program, another year to conduct testing, and expected EPA to submit a report on the testing by 2000—four years after the Food Quality Protection Act was passed.129 This timeline proved to be too ambitious. In fact, EPA only issued the first round of testing orders in October 2009,130 which will not be completed until October 2011 at the earliest.131 Thus, it will be years until EPA can de-liver a report to Congress. In 1996, EPA began the task of selecting which pesticide chemicals to test first, and designing and implementing a testing program, by convening an Endocrine Disruptor Screening and Testing Advisory Committee (EDSTAC).132 EDSTAC was composed of stakeholders from various sectors: environmental groups, federal agencies, state agencies, public health organizations, industry, and scientists.133 EDSTAC worked

125 Id. 126 See id. § 346a(p)(5)(C). 127 Id. § 346a(p)(5)(D); Toxic Substances Control Act, 15 U.S.C. § 2615 (2006). 128 See 21 U.S.C. § 346a(p). 129 See id. § 346a(p)(1)–(2), (7). 130 See Testing Order, supra note 14, at 54,422. 131 See Testing Policies, supra note 18, at 17,574. 132 See Keith J. Jones, Endocrine Disruptors and Risk Assessment: Potential for a Big Mistake,

17 Vill. Envtl. L.J. 357, 361 (2006). 133 Id.


for two years to set priorities among potential EDCs, and to design an appropriate screening and testing program.134 EDSTAC issued a final report in August 1998, with numerous rec-ommendations.135 EDSTAC recommended that the testing program should focus on endocrine effects on three primary hormone systems: the estrogen, androgen, and thyroid systems.136 EDSTAC recognized that approximately 87,000 chemicals need to be tested for their endo-crine-disrupting capabilities, but with limited resources, EPA must set priorities among the sea of chemicals to be treated.137 Additionally, EDSTAC suggested that EPA incorporate a two-tier system to test pesti-cides.138 Tier one is designed to separate out chemicals that do not in-teract with the endocrine system from those that do, so only established endocrine disruptors are subject to the next step of tier two testing.139 EPA essentially adopted EDSTAC’s finding and published a notice in the Federal Register announcing the newly established Endocrine Disruptor Screening Program (the “Testing Program”), designed to reflect the recommendations of EDSTAC.140

C. The Testing Program

The Testing Program includes all the recommendations of ED-STAC, including a tier one and tier two testing structure.141 Addition-ally, EPA identified the criteria by which it would select and prioritize pesticides to test under the Testing Program.142 The years from 1999 to 2008 were plagued by delays in moving the Testing Program forward.143 Finally, the Natural Resources Defense Council (NRDC) filed suit against EPA to compel further action on the

134 Endocrine Disruptor Screening and Testing Advisory Committee, Envtl. Prot. Agency,

http://epa.gov/endo/pubs/edspoverview/edstac.htm (last updated Apr. 22, 2010). 135 See generally Endocrine Disruptor Screening & Testing Advisory Comm., En-

docrine Disruptor Screening and Testing Advisory Committee (EDSTAC) Final Report—Executive Summary (1998) [hereinafter EDSTAC Report], available at http:// epa.gov/endo/pubs/edstac/exesum14.pdf.

136 Id. at ES–3. 137 See id. 138 See id. 139 See id. at ES–4. 140 Endocrine Disruptor Screening Program, 63 Fed. Reg. 42,852, 42,853 (Aug. 11,

1998); Jones, supra note 132, at 361. 141 Endocrine Disruptor Screening Program, supra note 140, at 42,853–54. 142 Id. at 42,854. 143 See Press Release, Natural Res. Def. Council, NRDC Backrounder: NRDC et al. vs.

EPA Presents Bellwether Choice for EPA Head Whitman (Feb. 22, 2001), available at www. nrdc.org/media/docs/fqpaback.doc.


Testing Program.144 A final consent decree required EPA to abide by its settlement agreement with NRDC and begin screening chemicals un-der the Testing Program.145 Although the settlement agreement spe-cifically provided that EPA would test thirty-nine pesticides for their endocrine-disrupting properties by 2002,146 there is no indication that EPA conducted such testing. In fact, EPA did not act until 2007, when it published a notice identifying the draft list of pesticides it would priori-tize for testing.147

D. Methods Required Under the Testing Program

It was another two years before EPA next took significant action under the Testing Program. In 2009, EPA published a proposed notice of the policies and procedures for tier one testing148 and the final list of initial pesticides prioritized for testing, which included sixty-seven pes-ticides.149 The goal of tier one testing “is to identify substances that have the potential to interact with the estrogen, androgen, or thyroid hormone systems.”150 To achieve this goal, EPA designed the specific tests these pesticides must go through, factoring in all current scientific knowledge.151 Thus, the final testing battery for pesticides reflects up-to-date science that takes into account, for example, the fact that when exposure occurs can significantly change an EDC’s health effect.152 EPA has not yet promulgated rules for tier two testing, but EPA has stated that the purpose of tier two testing is to “establish a dose-response rela-tionship for any adverse effects that might result from the interactions identified through [Tier 1].”153 Therefore, tier two testing aims to es-tablish the relationship between the amount of EDC—i.e., dose—and

144 See Jones, supra note 132, at 361–62; Press Release, Natural Res. Def. Council, supra

note 143. 145 See Natural Res. Def. Council v. Whitman, 2001 WL 1456783 at *1 (N.D. Cal. 2001). 146 Press Release, Natural Res. Def. Council, supra note 143. 147 Draft List of Initial Pesticide Active Ingredients and Pesticide Inerts to be Consid-

ered for Screening, 72 Fed. Reg. 33,486, 33,486 ( June 18, 2007). 148 Testing Policies, supra note 18, at 17,560–79. 149 Final List of Initial Pesticide Active Ingredients and Pesticide Inert Ingredients to

be Screened, 74 Fed. Reg. 17,579, 17,579 (Apr. 15, 2009). 150 Testing Policies, supra note 18, at 17,561. 151 See Endocrine Disruptor Screening Program (EDSP); Announcing the Availability

of the Tier 1 Screening Battery and Related Test Guidelines, 74 Fed. Reg. 54,416, 54,417 (Oct. 21, 2009).

152 See id.; supra Part I.E. 153 Testing Policies, supra note 18, at 17,561.


effect on the organism—i.e., response—for those pesticides that ini-tially demonstrate endocrine-disrupting properties.154 EPA included a concession in its policies and procedures that “re-cipients of . . . test orders [have] the option of submitting or citing ex-isting data, along with a rationale that explains how the cited or submit-ted study satisfies the Tier 1 Order.”155 EPA was trying to be fair with this concession: EPA would allow individuals who receive test orders to submit previously conducted tests, so long as the prior data is designed to show whether or not the pesticide has an effect on the endocrine system.156 Therefore, EPA clearly states that any previously conducted data must satisfy the specific, up-to-date testing methods under the tier one protocol.157

E. Final Hurdle to Testing: Approval under the Paperwork Reduction Act

EPA had one last hurdle to clear before issuing the first testing or-ders: it had to obtain approval to issue testing orders from the Office of Management and Budget (OMB).158 This is due to the Paperwork Re-duction Act, which mandates that any federal agencies wishing to col-lect information from the public must meet certain criteria.159 Specifi-cally, an agency must submit its proposal to collect information to OMB and get approval before collecting any information from the public.160 When EPA issues a test order, it requests information from the public, which, in this case, consists of pesticide producers.161 Therefore EPA was required to draft an information collection request and submit it to OMB for approval.162 Unfortunately, the information request that OMB approved in-cluded a major modification to the proposal drafted by EPA.163 EPA’s

154 See id. 155 Id. at 17,566. 156 See id. 157 See id. 158 See Paperwork Reduction Act, 44 U.S.C. § 3507(a) (2006). 159 Id. 160 Id. 161 See id. 162 Agency Information Collection Activities; Submission to OMB for Review and Ap-

proval, 74 Fed. Reg. 17,477, 17,477–79 (Apr. 15, 2009). 163 See Memorandum—Notice of Action from Kevin F. Neyland, Deputy Adm’r, Office of

Mgmt. & Budget, to EPA (Oct. 2, 2009) [Hereinafter OMB Memo], available at http://www. reginfo.gov/public/do/DownloadNOA?requestID=220264; Matt Schudtz, Sunstein Watch: OMB Meddling on Endocrine Disruptor Screening Program Means Shifting a Key Burden from Industry to EPA, Ctr. Progressive Reform Blog (Oct. 20, 2009), http://www.progressivereform. org/CPRBlog.cfm (follow “Matt Shudtz” hyperlink; then follow “Next”).


Testing Program required new, up-to-date tests properly constructed to show endocrine effects, but allowed an exception for “functionally equivalent” data from old tests.164 The approved information request form from OMB, however, states that,

under the principles of the [Paperwork Reduction Act], EPA should promote and encourage test order recipients to sub-mit Other Scientifically Relevant Information (OSRI) in lieu of performing all or some of the Tier I [tests], and EPA should accept OSRI as sufficient to satisfy the test orders to the greatest extent possible.165

The OMB approval also demanded that EPA report to OMB every in-stance where it found that other scientifically relevant data was insuffi-cient to satisfy the testing order.166 Ironically, OMB created these bur-dens for EPA under a statute with the purpose of minimizing paperwork and reducing the cost of collecting information to the fed-eral government.167 Beyond the burden imposed on EPA, this language is concerning because previous data generally comes from industry-developed re-search that is designed to show that their chemicals do not cause unrea-sonable endocrine effects.168 Older testing models are based on out-dated science that may allow some endocrine effects to go unnoticed.169 If EPA is encouraged to accept outdated testing data that indicates chemicals are not endocrine disruptors—even when modern test may show endocrine effects—then the entire purpose of the Test-ing Program will be undermined.170 Thus, although the OMB is not preventing EPA from achieving its purpose, OMB is making EPA’s job more difficult and encouraging it to rely on outdated, ineffective test-ing methods and data.171

164 See supra Part II.D. 165 OMB Memo, supra note 163. 166 See id. 167 See Paperwork Reduction Act, 44 U.S.C. § 3501 (2006). 168 Schudtz, supra note 163. 169 See id. 170 See id.; supra Part II.D. 171 See supra Part II.D.


III. The Administrative Procedure Act Should Be Used to Compel New Testing

As noted by Congress at the passing of the Food Quality Protection Act, “[t]he ultimate success of this reform will rest with the profession-alism and the common sense of the Environmental Protection Agency. Congress will be watching closely as we try to implement these reforms. We will, to ensure that science, not emotion, is the basis of pesticide regulation.”172 However, if EPA accepts old test data that does not con-form to tier one testing standards, then EPA has not lived up to its “common sense” mandate.173 Congress has thus far failed to “closely watch” EPA and OMB to ensure pesticides are tested with current tech-nology to assess their endocrine-disrupting potential.174 Therefore, it is up to citizens to monitor EPA’s progress in obtaining and reviewing test data to ensure the Agency is carrying out its congressional mandate.175

A. Administrative Procedure Act

If citizens are discouraged with EPA’s progress in testing pesticides under the Endocrine Disruptor Screening Program, the Administrative Procedure Act (APA) offers a potential solution.176 Specifically, the APA provides that a “person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.”177 Further-more, the APA states that a reviewing court must either compel or set aside agency action found to be: (1) “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; or (2) “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.”178 If EPA does accept outdated, unreliable testing data then nearly any member of the public is a person aggrieved within the mean-ing of the Food Quality Protection Act of 1996, as we are all regularly exposed to endocrine-disrupting pesticides and other EDCs that the Act is designed to test and regulate.179 If an aggrieved citizen did bring a claim under the APA to challenge EPA’s testing rules and program, a

172 142 Cong. Rec. 18,588 (1996). 173 See id.; supra Part II.E. 174 See supra Part II.E. 175 See Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 346a(p) (2006). 176 See Administrative Procedure Act, 5 U.S.C. §§ 702, 706 (2006). 177 Id. § 702. 178 Id. § 706. 179 See 21 U.S.C. § 346a(p).


reviewing court would review the agency action using the Chevron stan-dard.

B. Chevron and Agency Statutory Interpretation

In Chevron U.S.A., Inc. v. Natural Resources Defense Council, the Su-preme Court outlines the process for judicial review of an administra-tive agency’s interpretation of its statutory authority.180 Specifically, the Chevron Court directed:

When a court reviews an agency’s construction of the stat-ute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Con-gress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously ex-pressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue. . . . [I]f the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.181

Under this analysis, a court must look to the statutory language to determine if it is unambiguous and thus communicates clear congres-sional intent.182 If the statutory language is clear, and the agency has acted within the bounds of the statutory language, then the analysis is done.183 However, as the Court further notes, “[t]he judiciary . . . must reject administrative constructions which are contrary to clear congres-sional intent.”184

B. EPA Will Fail to Fulfill Its Congressional Mandate If It Accepts Outdated Testing Data

If EPA accepts outdated testing results, a court reviewing a chal-lenge to EPA’s Testing Program would most likely find that the Agency acted in excess of statutory jurisdiction and therefore the provision al-

180 See 467 U.S. 837, 842–43 (1984). 181 Id. 182 Id. 183 Id. 184 Id. at 843 n.9.


lowing old test data would be set aside.185 The statutory language man-dating the Testing Program is unambiguous.186 The Screening Program specifically directs that EPA “shall develop a screening program, using appropriate validated test system” and “shall provide for the testing of all pesticide chemicals” in order to implement the new testing system.187 Although Congress affords EPA discretion in selecting which chemicals to test beyond pesticides, Congress was unambiguous in directing the Agency to develop a new testing program to establish endocrine effects of all pesticides.188 EPA’s decision to accept old testing data at best side-steps, and potentially contradicts, Congress’s clear mandate to EPA.189 If EPA does actually accept old test data not designed to show if a chemical acts as an endocrine disruptor, then EPA is not, as the APA requires, acting within its statutory authority.190 This is because Con-gress only granted EPA discretion in how to structure the testing pro-gram, but did not delegate the ability to choose whether or not to test pesticides for their endocrine effects.191 EPA must test all pesticides for endocrine effects, and has failed to do so if it allows for submission of old data from tests incapable of detecting endocrine effects.192 Thus, a reviewing court will likely determine that EPA is not entitled to Chevron deference in this situation, and must instead abide by its clear statutory directive to execute the endocrine testing program.193 A court can thus stop at the initial inquiry, and as a result, an arbitrary and capricious analysis is not necessary.194

C. Arbitrary and Capricious Standard

If, however, a reviewing court found that EPA did not act in opposi-tion to its clear statutory mandate to test pesticides, there is an addi-tional avenue for relief.195 Even when a court has determined that an agency has acted within the scope of its statutory authority, agency ac-

185 See Chevron, 467 U.S. at 843. 186 See Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 346a(p)(1), (3)(A) (2006). 187 Id. (emphasis added). 188 See id. 189 See id. 190 See Administrative Procedure Act, 5 U.S.C. § 706(2)(C)(2006). 191 See 21 U.S.C. §§ 346a(p)(1), (3)(A). 192 See id. 193 See id. §§ 346a(p)(1), (3)(A); Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S.

837, 843 (1984); supra Part III.F.1. 194 See Motor Vehicle Mfg. Ass’n of the U.S. v. State Farm Mut. Auto. Ins., 463 U.S. 29,

42–43 (1983). 195 Citizens to Protect Overton Park v. Volpe, 401 U.S. 402, 416 (1971).


tion can nonetheless be set aside if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”196 In Motor Vehi-cle Manufacturers Ass’n of the United States v. State Farm Mutual Automobile Insurance, the Court identified a series of factors to analyze when con-sidering whether or not an agency action is arbitrary and capricious:

Normally, an agency rule would be arbitrary and capricious if the agency has [1] relied on factors which Congress has not in-tended it to consider, [2] entirely failed to consider an impor-tant aspect of the problem, [3] offered an explanation for its decision that runs counter to the evidence before the agency, or [4] is so implausible that it could not be ascribed to a dif-ference in view or the product of agency expertise.197

There is a compelling argument under these factors that EPA’s action in establishing the Testing Program was arbitrary and capricious.198 In particular, the record regarding the Testing Program shows that if it chooses to accept old data, EPA “entirely failed to consider an impor-tant aspect of the problem,” and its decision would be “so implausible that it could not be ascribed to a difference in view.”199

D. If EPA Accepts Outdated Test Data, Its Actions Are Arbitrary and Capricious

A court engaging in an arbitrary and capricious analysis would look to EPA’s record in formulating the Testing Program, and determine whether or not EPA articulated a satisfactory explanation for its action, including a rational connection between facts and final action.200 EPA’s record includes: the Endocrine Disruptor Screening and Testing Advi-sory Committee (EDSTAC) recommendations to the Agency; EPA’s promulgation of rules adopting EDSTAC’s testing suggestions; and EPA’s policies and procedures for the testing program.201 EDSTAC’s report and even EPA’s policies and procedures clearly state that previ-ously conducted test data is only acceptable if it conforms to tier one testing standards.202 There is no rational connection between the re-cord, which clearly calls for new, higher-technology testing of pesticides,

196 Id.; see Administrative Procedure Act, 5 U.S.C. § 706 (2006). 197 463 U.S. 29, 43 (1983). 198 See id. 199 See id. 200 See id. at 43. 201 See id. 202 Supra Part II.B–.D.


and an agency action that would accept outdated test data.203 Addition-ally, if EPA does not submit pesticides to higher-technology standards like those under the tier one testing protocol, they will have “failed to consider an important aspect of the problem.”204 Therefore, if EPA de-cides to accept outdated test data that is not designed to show endocrine effects, that decision will most likely be found to be arbitrary and capri-cious.205 A reviewing court would thus set aside the portion of the final rule allowing for outdated test data in lieu of conducting new testing under the tier one testing protocol.206 Although the APA provides potent tools for a citizen suit to en-force Congress’ intended Testing Program, test data is only valuable once its findings are applied to the regulation of endocrine disruptors.

IV. Regulating Established Endocrine Disruptors

It is currently unclear what will happen after EPA completes the Testing Program and reports back to Congress. The Testing Program includes a sweeping statement that “any substance that is found, as a result of testing and evaluation under this section to have an endocrine effect on humans, the [EPA] Administrator shall, as appropriate, take action under such statutory authority as is available . . . necessary to en-sure the protection of public health.”207 This language is incredibly broad and discretionary, which makes it unclear how EPA will ulti-mately regulate pesticides and other chemicals that are found to have endocrine effects through the Testing Program.208 Congress likely did not provide EPA a new regulatory structure for controlling EDCs because existing statutes already provide EPA the abil-ity to regulate pesticides and toxic substances.209 However, it will likely be up to citizen enforcers to take the lead in ensuring that EPA acts on the data it collects, and takes steps to regulate proven EDCs to protect human health and the environment. Two major statutes provide ave-nues for regulating EDCs: the Federal Insecticide, Fungicide, and Ro-denticide Act, and the Toxic Substances Control Act.210

203 See State Farm, 463 U.S. at 29, 43. 204 See id. 205 See id. at 42–43. 206 See id. 207 Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 346a(p)(6) (2006). 208 See id. 209 See Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§ 136–136y (2006);

Toxic Substances Control Act, 15 U.S.C. §§ 2601–2695(d) (2006). 210 See 7 U.S.C. §§ 136–136y; 15 U.S.C. §§ 2601–2695(d).


A. Federal Insecticide, Fungicide, and Rodenticide Act

Under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA regulates pesticides’ entry into the market through label-ing, sale, and distribution regulations.211 It is important to note that FIFRA only applies to pesticide chemicals.212 FIFRA first provides that all new pesticides must be registered with EPA.213 EPA must approve registrations for pesticides that perform their intended function “with-out unreasonable adverse effects on the environment.”214 “Unreason-able adverse effects on the environment” are further defined as “any unreasonable risk to man or the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide.”215 Therefore FIFRA has an inherent cost-balancing test within its regulatory structure.216 However, EPA can cancel a registra-tion and take a pesticide off the market if it finds that the pesticide causes an unreasonable adverse effect, subject to this cost-benefit bal-ancing test.217 However, this method of regulating pesticides under FIFRA poses significant problems. First, under FIFRA economic costs are frequently given far more emphasis in the balancing test than issues like endo-crine disruption.218 Therefore it is challenging to get a pesticide regis-tration cancelled.219 Additionally, even if EPA does cancel a registra-tion, a blanket prohibition on selling a particular pesticide is a blunt, extreme solution. That is because FIFRA is a front-end statute; it is de-signed to control the entry point of pesticides, but has little ability to fine tune the use of pesticides after registration.220 Although a crude solution, the ability to cancel a registration under FIFRA at least pro-vides one avenue for regulating pesticides under existing environ-mental law, and could provide an avenue for relief if the Testing Pro-gram shows that a particular pesticide is highly toxic with widespread

211 Zygmunt J.B. Plater et al., Environmental Law and Policy: Nature, Law,

and Society 820 (3d ed. 2004); see Federal Insecticide, Fungicide, and Rodenticide Act 7 U.S.C. § 136a (2006).

212 See Plater et al., supra note 211, at 820. 213 See 7 U.S.C. § 136a. 214 Id. § 136a(c)(5). 215 Id. § 136(z), (bb). 216 See id. § 136(z)(bb); Sachs, supra note 9, at 313–15. 217 See 7 U.S.C. § 136d(b). 218 See Plater et al., supra note 211, at 839. 219 See Pesticide Cancellation Under EPA’s Own Initiative, Envtl. Prot. Agency, http://www.

epa.gov/opp00001/regulating/cancellations.htm (last updated Feb. 16, 2011). 220 See id. at 820.


endocrine disruption. Again, pesticides are the only class of endocrine disruptors EPA is currently required to test under the Testing Program, so having a regulatory structure to manage pesticides, even an imper-fect one, is crucial.221

B. Toxic Substances Control Act

The Toxic Substances Control Act (TSCA) is a broader and poten-tially more helpful statute than FIFRA. TSCA allows EPA to test and regulate certain chemical substances.222 The threshold test for whether or not EPA can act under TSCA is whether or not a chemical “pre-sent[s] an unreasonable risk of injury to health or the environment.”223 If EPA reasonably concludes that a chemical does present an unreason-able risk of injury to health or the environment, it can require further testing or restrict a chemical’s use.224 However, EPA is significantly lim-ited in testing and regulating chemicals because TSCA further inter-prets “unreasonable risk of injury to health or the environment” to in-clude a cost-balancing requirement.225 This means that EPA must take into account the benefits of the chemical, availability of substitutes, and economic consequences of when it considers restricting a chemical.226 Additionally, TSCA only allows EPA to impose “the least burdensome” restrictions necessary to protect against unreasonable risk.227 In prac-tice, this means EPA has rarely limited toxic chemicals once they are on the market.228 Additionally, the definition section of TSCA specifically exempts pesticides from the definition of “chemical substance” and therefore from regulation under TSCA.229 Thus, EPA cannot regulate pesticides under TSCA, and pesticides are the only class of chemicals that EPA has

221 See Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 346a(p)(3)(A) (2006). 222 See 15 U.S.C. §§ 2603, 2605; Plater et al., supra note 211, at 818–20. 223 15 U.S.C. §§ 2603, 2605. 224 See id. Restrictions can include, among other options, prohibiting manufacture or

distribution of a substance or requiring warning labels. Id. § 2605. Additionally, TSCA is a disfavored statute for regulating chemicals: EPA can only restrict a chemical under TSCA if no other statute provides a way to eliminate or reduce a risk of injury to health or the envi-ronment. See id.

225 See id. § 2605(c); Plater et al., supra note 222, at 839. 226 15 U.S.C. § 2605(c). 227 Id. § 2605(a). 228 Sachs, supra note 9, at 314–15. 229 See 15 U.S.C. §§ 2602, 2605.


been mandated, rather than simply granted permission, to test under section 408(p) of the Federal Food Quality Protection Act.230 Therefore, at this stage of testing, TSCA is a largely inadequate tool to regulate endocrine disruptors because it is limited to regulating non-pesticide chemicals, while EPA is only mandated to test pesticides.231 However, if EPA expands testing to non-pesticide EDCs, they could po-tentially be regulated under TSCA, with greater options for remedies than FIFRA’s single, extreme cancellation procedure.232

C. Future Regulation of Endocrine Disruptors

Neither TSCA nor FIFRA offer perfect solutions to regulating en-docrine disruptors.233 However, these statutes are the best available tools for regulating EDCs, and at least provide a possible avenue for post-testing regulation.234 Presuming that testing on EDCs shows the potential for human and environmental health harms, it is crucial for EPA to regulate EDCs to protect against these harms. Given the largely inadequate existing structures under TSCA and FIFRA, new testing data might provide the needed impetus for proposing new legislation to comprehensively monitor and minimize dangerous chemicals in this country.

Conclusion

It is crucial that society has adequate information regarding the many chemicals that are present in our drinking water, food, contain-ers, plastics, detergents, and more.235 Chemicals that individuals en-counter and ingest in small doses every day could have potentially seri-ous health consequences, both for current and future generations. EDCs can potentially cause infertility, immune disorders, metabolic disorders, and cancer.236 Without sufficient scientific data, EPA is un-able to properly assess whether or not the chemicals that surround us on a daily basis pose an “unreasonable risk of harm to human health”

230 Pub. L. No. 104–170, 110 Stat. 1489 (codified as amended at 21 U.S.C. § 346a(p)

(2006)). 231 See 15 U.S.C. § 2605; 21 U.S.C. § 346a(p). 232 See 15 U.S.C. §§ 2602, 2605. 233 See infra Parts IV A.–.B. 234 See Sachs, supra note 9, at 313–15. 235 Supra Part I.B. 236 Supra Part I.C–.E.


and should therefore be regulated under laws such as FIFRA and TSCA.237 Congress took the first important step towards this regulation: Congress mandated that EPA must test all pesticide chemicals for their endocrine effects.238 It is everyone’s duty as active citizens to force EPA to fulfill these statutory obligations, and require that industry submit their pesticides to stringent new testing technologies.239 If EPA fails its mandate, the citizen suit provisions of the Administrative Procedure Act can serve as a tool to force the Agency to require up-to-date testing of pesticides.240 Additionally, once EPA fulfills its mandates, citizens should further advocate for the testing of all endocrine disruptors be-yond just pesticides.241 Finally, citizens should not stop at testing, but should pressure EPA to appropriately regulate EDCs after testing is complete.242

237 See Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 346a(p)(6)(2006); supra Part IV. 238 See 21 U.S.C. §§ 346a(p)(1), (3)(A). 239 See id.; supra Part II.E. 240 See Administrative Procedure Act, 5 U.S.C. § 706 (2006). 241 See supra Part II. 242 See supra Part IV.

INSERTED BLANK PAGE

PIGS IN THE BACKYARD OR THE BARNYARD: REMOVING ZONING IMPEDIMENTS TO

URBAN AGRICULTURE

Kate A. Voigt*

Abstract: Urban agriculture is on the rise in cities across the United States, due in part to consumers' increased interest in buying local and sustainably-produced foods. Many municipalities have recognized the benefits that urban agriculture can bring to their residents, including economically down-trodden cities that view urban agriculture as a way to revitalize their neighborhoods. Unfortunately, zoning regulations often unintentionally prohibit even the most basic farming activities. This Note examines the impact of municipal zoning regulations on urban agricul-ture, and suggest ways that a municipality looking to encourage urban ag-riculture can use zoning regulations to responsibly promote its practice.

A nuisance may be merely a right thing in the wrong place,—like a pig in the parlor instead of the barnyard.1

Introduction

The popularity of urban agriculture has increased significantly in the last few decades,2 pushed along in recent years by a heightened in-terest on the part of consumers in buying local and sustainably created foods.3 Urban agriculture can be defined generally as “[t]he growing, processing, and distributing of food and other products through inten-sive plant cultivation and animal husbandry in and around cities.”4 Proponents list numerous benefits that come from growing food and raising animals in metropolitan areas, including health, environmental,

* Articles Editor, Boston College Environmental Affairs Law Review, 2010–11. 1 Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365, 388 (1926). 2 See Jac Smit et al., United Nations Dev. Programme, Urban Agriculture: Food,

Jobs and Sustainable Cities 25 (1996). 3 See Neil D. Hamilton, Tending the Seeds: The Emergence of a New Agriculture in the United

States, 1 Drake J. Agric. L. 7, 12–13 (1996). 4 See Katherine H. Brown & Anne Carter, Cmty. Food Sec. Coal., Urban Agri-

culture and Community Food Security in the United States: Farming from the City Center to the Urban Fringe 5 (2003).

537


and economic benefits.5 Still, the availability and types of land that can be used for urban agriculture vary wildly between municipalities, as do the types of agriculture that may be appropriate to each area. Municipalities in the United States are increasingly recognizing the benefits of urban agriculture, especially its potential for encourag-ing the revitalization of communities that may have a surplus of vacant land.6 However, outdated zoning regulations can unintentionally im-pede urban agriculture.7 For example, zoning regulations can prohibit residents from raising farm animals in urban areas, growing produce on certain plots of land, or selling products from urban farms.8 Still, because zoning regulations were designed to address competing uses of land in specific areas, they are a particularly well-suited tool to balance the pros and cons associated with urban farming.9 For this reason, zon-ing regulations could be one of the most effective avenues for promot-ing farming in cities.10 Municipalities have begun to look at zoning regulations as a way to facilitate urban agriculture while minimizing health, safety, and nuisance concerns.11 These efforts, while helpful, have been largely piecemeal. This Note examines the impact of municipal zoning regulations on urban agriculture, and suggests ways that a municipality looking to encourage urban agriculture can use zoning regulations to responsibly promote its practice. Part I briefly explains what urban agriculture is and its potential benefits and drawbacks.12 Part II examines how out-dated zoning codes typically hinder urban farming in a city.13 Part III discusses ways in which municipalities have already started to address urban agriculture through their zoning codes.14 Lastly, Part IV demon-strates that these current efforts are largely inadequate, and proposes a

5 See Why Is Urban Agriculture Important?, RUAF Found. Resource Centres on Urban

Agric. & Food Security, http://www.ruaf.org/node/513 (last visited Apr. 15, 2011). 6 See Lynn Horsley, Urban Farming Yields a Harvest of Hassles, Kansas City Star, Nov. 7,

2009, at A1. 7 Nina Mukherji & Alfonso Morales, Zoning for Urban Agriculture, Zoning Practice,

Mar. 2010, at 1, 2. 8 See infra Part II. 9 See Matthew J. Parlow, Greenwashed?: Developers, Environmental Consciousness, and the

Case of Playa Vista, 35 B.C. Envtl. Aff. L. Rev. 513, 515 (2008). 10 See Mukherji & Morales, supra note 7, at 4; see also ENP & Assocs., Flint Urban Ag-

riculture Legal Framework 2 (2009) (assessing Flint, Michigan’s zoning regulations for their impact on urban agriculture and recommending actions to remove zoning barriers).

11 See infra Part III. 12 See infra Part I. 13 See infra Part II. 14 See infra Part III.

2011] Removing Zoning Impediments to Urban Agriculture 539

comprehensive method for revising municipal zoning codes in order to fully realize the benefits of urban agriculture while minimizing poten-tial harms.15

I. Urban Agriculture Generally

A. Defining Urban Agriculture

The terms “urban agriculture” and “urban farming” encompass a wide variety of activities. They can include: growing tomatoes on a roof to supplement a family’s dinner; cultivating a variety of crops on vacant, industrial plots to sell at a local farmers’ market; and raising chickens in a backyard coop to produce enough eggs for a few families.16 Assigning one definition is difficult because of this diversity, but in general, urban agriculture includes “any processes that produce traditional subsistence, nutritional or commercially profitable food or other grown or raised products, removed from rural domains, and instead cultivate them in special intensive conditions within the urban context or in its surround-ing buffer, peri-urban, regions.”17 Urban agriculture often employs “re-sources (unused or under-used space, organic waste), services (technical extension, financing, transportation), and products (agrochemicals, tools, vehicles) . . . and, in turn, generates resources (green areas, mi-croclimates, compost), services (catering, recreation, therapy), and products (flowers, poultry, dairy) largely for this urban area.”18 Urban farmers use an array of spaces to grow food and raise ani-mals.19 Perhaps the most common locations for urban farming activities are in the backyards of residential plots.20 However, farms can be found on rooftops, decks, windowsills, vacant public or private land, commu-nity gardens, greenhouses, the sides of roads, and the land surrounding public institutions like schools, hospitals, and prisons.21 For example, Seattle has allowed public land under utility wires to be turned into

15 See infra Part IV. 16 See Smit et al., supra note 2, at 4. 17 Charles W. Lesher Jr., Urban Agriculture: A Literature Review—Urban Ag-

riculture: Differing Phenomena in Differing Regions of the World 5 (2006), avail-able at http://www.nal.usda.gov/afsic/pubs/UrbanAgLesherAFSIC.pdf.

18 Luc J.A. Mougeot, Growing Better Cities: Urban Agriculture for Sustain-able Development 4–5 (2006) (internal citation omitted).

19 See Smit et al., supra note 2, at 4. 20 See id. 21 See Brown & Carter, supra note 4, at 4; Mougeot, supra note 18, at 5; Smit et al.,

supra note 2, at 4.


community gardens.22 A corporation in Buffalo, New York used green-houses and hydroponic growing techniques on contaminated industrial sites—also known as brownfields—to grow over seven million pounds of tomatoes for sale.23 And one farmer has produced over $30,000 worth of produce in a year, including vegetables, fruit, and herbs, using roof-tops and vacant yards in crowded Vancouver neighborhoods.24 In gen-eral:

ublic land (schoolyards, grounds of

chicken coops that may need to be placed on small plots of land.29

Urban agriculture may take place in locations inside the cities (intra-urban) or in the peri-urban areas. The activities may take place on the homestead (on-plot) or on land away from the residence (off-plot), on private land (owned, leased) or on public land (parks, conservation areas, along roads, streams and railways), or semi-pschools and hospitals).25

Because of the nature and diversity of urban agriculture’s locations and forms, land use controls like zoning play an important role in shap-ing how amenable a city is to urban farming. Zoning regulations con-trol the land uses allowed in any given area of a city,26 often prohibiting or permitting whether and where residents can grow produce and raise animals.27 Moreover, zoning regulations can also dictate structural de-sign requirements, such as building heights, aesthetic design, and set-back distances.28 Such requirements have weighty implications for agri-cultural activities, which often require supporting structures such as greenhouses or

22 Kevin Balmer et al., Portland State Univ., The Diggable City: Making Urban

Agriculture a Planning Priority 51 (2005), available at http://www.portlandonline. com/bps/index.cfm?c=42793 (reporting an inventory of all public lands suitable for culti-vation within Portland, by request of City of Portland).

23 Brown & Carter, supra note 4, at 3. 24 Frances Bula, Growing an Urban Revolution, Globe and Mail (Toronto), Dec. 31,

2009, at S1. 25 What Is Urban Agriculture?, RUAF Found. Resource Centres on Urban Agric. &

Food Security, http://www.ruaf.org/node/512 (last visited Apr. 15, 2011). 26 See Donald L. Elliott, A Better Way to Zone: Ten Principles to Create More

Livable Cities 41 (2008); Michael Kwartler, Legislating Aesthetics: The Role of Zoning in De-signing Cities, in Zoning and the American Dream 187, 195 (Charles M. Haar & Jerold S. Kayden eds., 1989).

27 See ENP & Assocs., supra note 10, at 2, 5. 28 See Elliot, supra note 26, at 46; Kwartler, supra note 26, at 195. 29 See ENP & Assocs., supra note 10, at 3–4.


B. Urban Agriculture in Context: The Role of Farming in American Cities

Interest in urban agriculture has increased in recent years in the United States, requiring municipalities to consider their treatment of farming activities within city limits.30 The practice is rising in popularity in part due to new ways of thinking about our food system that empha-size purchasing food and products that are grown organically, locally, and sustainably.31 In addition to being increasingly common, urban agriculture provides a host of benefits that make it appealing.32 At the same time, valid concerns exist about the impact of farming activities in urban areas on health, sanitation, and neighborhood quality.33 Perhaps because of the benefits of urban agriculture and its increased popular-ity among their residents, cities and towns seem to be searching for ways they can support urban agriculture within their city limits without compromising on health and safety issues.34

1. A Brief Overview of the Origins of Urban Farming

“Throughout the world, there is a long tradition of farming inten-sively within and at the edge of cities.”35 Urban food production began with ancient civilizations, and continued through nineteenth and early twentieth centuries.36 However, as modern sewage and sanitation sys-tems were instituted, city planners increasingly began to discourage farming within city limits—relegating food production to the outlying rural or suburban areas.37 Technological advances in irrigation tech-niques and the introduction of paved roads pushed food production further out of the city.38

30 See Balmer et al., supra note 22, at 11. Portland’s City Council passed Resolution

36,272 in November 2004, calling for an inventory of city-owned lands suitable for agricul-tural uses. See id.; see also ENP & Assocs., supra note 10, at 2; Liz Shaw, Flint to Consider Ordi-nance Changes to Enhance Urban Agriculture, Flint Journal ( July 7, 2009, 10:18 AM), http:// blog.mlive.com/get-healthy-in-genesee/2009/07/flint_to_consider_ordinance_ch.html.

31 See Hamilton, supra note 3, at 12–13. 32 See Why is Urban Agriculture Important?, supra note 5. 33 See Mougeot, supra note 18, at 8–9. 34 See, e.g., Balmer et al., supra note 22, at 11; Nathan McClintock & Jenny Cooper,

Cultivating the Commons: An Assessment of the Potential for Urban Agriculture on Oakland’s Public Land 1 (2009), available at http://www.oaklandfood.org/media/AA/ AD/oaklandfood-org/downloads/27621/Cultivating_the_Commons_COMPLETE.pdf; P.J. Huffstutter, Investors See Farms as Way to Grow Detroit, L.A. Times, Dec. 27, 2009, at A3.

35 Smit et al., supra note 2, at 26. 36 Id. at 28–33. 37 Id. at 32. 38 See id. at 36.


However, urban agriculture has seen resurgence in recent years.39 Concerns over the sustainability of the world’s cities, which are seeing an increase in residents and already tend to “use too many natural re-sources and produce too much waste,” are forcing the international community to look at urban agriculture as a way to reduce the impact of cities and feed their burgeoning populations.40 In North America, ur-ban agriculture was also once a “significant subsector[] of the food and agriculture system,” but began to decline around the 1950s.41 The 1970s and 1980s saw an increase “in community gardens and home gardens, partly as a result of a growing concern about food quality.”42 Urban ag-riculture has continued to pick up momentum in the last few decades. In 1994, eighty percent of the gardeners in the United States were ur-ban dwellers.43 Moreover, “[t]he 1980 [U.S.] Census found that urban metropolitan areas produced 30% of the dollar value of [U.S.] agricul-tural production. By 1990, it had increased to 40%.”44

The current popularity of urban agriculture in the United States can be seen, at least in part, due to a growing environmental movement that has pushed consumers towards favoring local and organic foods.45 Urban agriculture helps fill the market’s demand for local produce both by allowing residents to supplement their meals with products from their own urban farms, and by allowing entrepreneurial urban farmers to sell their products to other local residents.46 The develop-ment of Whole Foods Market, Inc illustrates this trend.47 At this “rap-idly expanding” and highly profitable natural grocery store chain, “[s]hoppers are provided with point of purchase information about how the food was produced, its health value, and how it can be best prepared.”48 Mainstream grocery stores are providing similar informa-tion, and stocking locally produced foods.49 There has also been an increasing interest in farmers markets, evidenced by the almost seven

39 See id. at 25. 40 See Tjeerd Deelstra & Herbert Girardet, RUAF Found., Urban Agriculture

and Sustainable Cities 45 (2002). 41 Smit et al., supra note 2, at 46. 42 Id. 43 Id. 44 Id. at 47. 45 Hamilton, supra note 3, at 12. 46 See id. 47 Id. 48 Id. 49 Id. at 13.


percent jump in the number of farmers markets in the United States from August 2006 to August 2008 alone.50

2. The Benefits and Drawbacks of Farming in Metropolitan Areas

Urban agriculture provides tangible benefits that make it appeal-ing to the residents of municipalities and to the municipality itself, in-cluding health, environmental, and economic benefits.51 Farming ac-tivities in cities tend to provide cheaper, more nutritious food to low-income communities that may have limited access to fresh, inexpensive produce.52 Additionally, farming provides environmental benefits in the form of lowered pollution and waste products.53 Urban agriculture also brings economic benefits, including the utilization of vacant land and the possibility of job creation, which make it a promising force for the economic revitalization of communities.54 At the same time, there are still concerns about the impact of agricultural activities that make residents and cities wary of the practice, including problems with food raised on contaminated lands, pesticide use and overuse, zoonotic dis-ease transmission, and quality-of-neighborhood concerns.55

a. Health Benefits

Urban agriculture improves both the quality and price of food available in cities, especially for residents of low-income areas.56 Mar-kets in low-income, urban neighborhoods tend to carry less produce and charge more for lower quality produce than suburban and rural grocery stores.57 High transportation costs that raise prices are often to blame.58 However, “[u]rban gardeners have been shown to be able to

50 Press Release, U.S. Dep’t of Agric., Number of Farmers Markets Continues to Rise in U.S. (Sept. 19, 2008), available at http://www.ams.usda.gov/AMSv1.0/ (follow “Farmers Mar-kets and Local Food Marketing” hyperlink; then follow “News Releases” hyperlink).

51 See Why Is Urban Agriculture Important?, supra note 5. 52 See Brown & Carter, supra note 4, at 3–5. 53 Id. at 4. 54 See id. at 7; Mukherji & Morales, supra note 7, at 3; David Whitford, Can Farming Save

Detroit?, CNNMoney.com (Dec. 29, 2009, 11:37 AM), http://money.cnn.com/2009/12/29/ news/economy/farming_detroit.fortune/index.htm.

55 See Mougeot, supra note 18, at 9. 56 Alexandra Dapolito Dunn, Siting Green Infrastructure: Legal and Policy Solutions to Alle-

viate Urban Poverty and Promote Healthy Communities, 37 B.C. Envtl. Aff. L. Rev. 41, 52–53 (2010).

57 Id. at 52. 58 United Nations Comm. on Poverty Reduction, Fourth Session, Bangkok, Thailand,

Dec. 12–14, 2007, Urban Poverty and the Working Poor, 5, U.N. Doc. E/ESCAP/CPR(4)/4 (Sept. 24, 2007) (“In many cases, the urban poor pay up to 30 per cent more for their food


obtain forty to sixty percent of their household food from their gar-dens.”59 By spending less income on food, urban agriculture “makes income available for other expenditures, including health and educa-tion.”60 Moreover, “[f]ood from outside the cities—especially perish-ables like fruit, vegetables and fish—loses much of its nutritional value in transit and storage.”61 Urban farming, then, can help improve the nutritional health of urban populations that are the most in need.62

b. Environmental Benefits

Urban agriculture also provides significant environmental benefits to municipalities. Food produced in cities uses less fossil fuel for trans-portation and produces less packaging and food waste.63 Urban agri-culture also helps to reduce pollution by improving air quality.64 Roof-tops, which are usually around thirty percent of a city’s total land area, can be used for high-yield crop production and reduce energy costs for the building they are sited on.65

c. Economic Benefits

One of the most promising benefits of urban agriculture is its po-tential to clean up and utilize vacant lots in economically down-trodden cities.66 “Chicago has an estimated 70,000 vacant parcels of land; Phila-delphia has 31,000; and Trenton has 900 acres or 18% of it[s] total land. Between 1950 and 1990, abandoned lots in inner-city areas re-mained vacant for 20 to 30 years.”67 This led to bulldozing of such lots, leaving fairly inexpensive parcels with limited economic potential. De-

than the rural poor, and spend 60 per cent or more of their total expenditure on food. Transport costs and post-harvest losses are the main causes of the higher cost of food in urban areas.”).

59 Dunn, supra note 56, at 53. 60 Smit et al., supra note 2, at 162. 61 Id.; see also Susan A. Schneider, A Reconsideration of Agricultural Law: A Call for the Law

of Food, Farming, and Sustainability, 34 Wm. & Mary Envtl. L. & Pol’y Rev. 935, 954–55 (2010) (suggesting a new agriculture policy that connects consumers with local food, in part to improve the nutritional quality of consumers’ food).

62 See Schneider, supra note 61, at 954–55. 63 See Brown & Carter, supra note 4, at 4; Schneider, supra note 61, at 954–55. 64 Mougeot, supra note 18, at 8. 65 Adrienne Lyles-Chockley, Building Livable Places: The Importance of Landscape in Urban

Land Use, Planning, and Development, 16 Buff. Envtl. L.J. 95, 114 (2008–2009). 66 See Brown & Carter, supra note 4, at 7; Catharine LaCroix, Urban Agriculture and

Other Green Uses: Remaking the Shrinking City, 42 Urb. Law. 225, 235–36 (2010); Mukherji & Morales, supra note 7, at 3.

67 Brown & Carter, supra note 4, at 7.


veloping urban agriculture on these vacant lots creates immediate eco-nomic benefits.68 Detroit, Michigan is perhaps the best example of the potential for urban agriculture to help the economic revitalization of a city. It is es-timated that forty square miles out of the 139 square miles within city limits are abandoned land.69 At least forty-eight downtown buildings are empty.70 Vacant lots and abandoned buildings are problematic for a number of reasons including the added infrastructure costs of main-taining roads and sewer systems, and collecting trash and fighting crime, in sparsely populated neighborhoods, and the obvious impacts on the real estate market.71 Urban farming is one way to help stimulate Detroit’s economy.72 The number of urban gardens has doubled in the past two years, to a total of nearly 900.73 These gardens have helped by bringing healthy and affordable food to the city, as well as providing “meaningful, if generally unpaid, work to the chronically unemployed.”74 One investor sees the potential for Detroit to be at the forefront of the growing trend in urban agriculture, so much so that he is willing to commit $30,000,000 to developing a “large-scale, for-profit agricultural enter-prise, wholly contained within the city limits of Detroit.”75 Still, there are issues that can make urban farming problematic.76 Inexperienced urban farmers may overuse or misuse pesticides that pose health risks to both the farmers and nearby residents.77 Addition-ally, “[k]eeping livestock in the city raises the possibility of zoonotic dis-eases—diseases that can be transmitted from animals and birds to hu-mans (such as avian flu).”78 Residents and municipalities also are often concerned about maintaining the residential quality of neighbor-hoods.79 Opponents worry largely about smells from farming activities,

68 Id. 69 Whitford, supra note 54. 70 Id. 71 Id.; see Ben Beckman, Note, The Wholesale Decommission of Vacant Urban Neighborhoods:

Smart Decline, Public-Purpose Takings, and the Legality of Shrinking Cities, 58 Clev. St. L. Rev. 387, 387 (2010).

72 Huffstutter, supra note 34. 73 Whitford, supra note 54. 74 Id. 75 Id. 76 See Mougeot, supra note 18, at 9. 77 Id. 78 Id. 79 See Horsley, supra note 6.


unclean yards, and property values.80 One Kansas City resident summed up these concerns well; “‘Everyone has their own picture of what a neighborhood should look like . . . . I just want to be sure the neighbor-hood quality of life is not compromised.’”81

II. The Impact of Zoning Regulations on Urban Agricultural Activities

A. Overview of Zoning Regulations

Zoning laws are particularly relevant to urban agriculture because they focus on regulating the appropriate uses of a municipality’s land.82 Zoning laws came about in the early twentieth century when municipali-ties found nuisance laws were unable to keep up with land-use conflicts that were emerging with the new, rapid growth of cities.83 In response, municipalities began to pass laws that divided different land uses into physically distinct zones, “thereby segregating incompatible land uses from one another.”84 Most of these zoning laws came to follow a struc-ture known as Euclidean Zoning, named after the landmark land use case Village of Euclid v. Amber Realty Co.85 Under Euclidean Zoning, states generally pass an enabling act that “empower[s] municipalities to enact zoning ordinances or regulations.”86 As part of this enabling act, “most states require local governments to adopt comprehensive (also called ‘general’ or ‘master’) plans.”87 These plans set out goals, priorities, and objectives that are supposed to guide the municipality when drafting

80 See id. See generally Kate H. Brown & Andrew L. Jameton, Public Health Implications of

Urban Agriculture, 21 J. Pub. Health Pol’y 20 (2000) (analyzing the public health implica-tions of urban agriculture and making policy recommendations for addressing these im-plications).

81 Horsley, supra note 6. 82 See Mukherji & Morales, supra note 7, at 2. 83 Parlow, supra note 9, at 515. 84 Id. 85 272 U.S. 365, 365 (1926); Parlow, supra note 9, at 515. 86 Nat’l Policy & Legal Analysis Network to Prevent Childhood Obesity, Pub.

Health Law & Policy, Establishing Land Use Protections for Farmers’ Markets 8 (2009) [hereinafter Land Use Protections for Farmers’ Markets], available at http:// www.nplanonline.org/sites/phlpnet.org/files/nplan/Establishing%20Land%20Use%20Pro- tections%20for%20Farmers%27%20Markets_FINAL_091203.pdf.

87 Id.


zoning regulations and making decisions.88 Zoning is the tool by which a municipality implements its comprehensive plans.89

While the forms of zoning regulations vary significantly from mu-nicipality to municipality, most have the same basic components. Gen-erally, land in the municipality is divided into zoning districts, each with separate, prescribed rules regarding the kind of structures and types of uses that are permitted in a particular zone.90 In each zone, there can be both primary uses and accessory uses.91 Agricultural activities can be incorporated in these uses in a variety of ways.92 Some municipalities have districts that are specifically deemed “agricultural districts.”93 Al-ternatively, a municipality can incorporate urban agriculture “as a use or set of uses that are permitted, conditional, or forbidden, depending on the district.”94 Some municipal codes fail to mention whether agri-culture or any agricultural activities are permitted or prohibited.95 In addition to governing the use of the land, zoning regulations can prescribe design requirements for each district, such as building height limitations, yard restrictions, and requirements dictating how far buildings must be set back on the property.96 These types of design re-quirements can have a large impact on agricultural activities.97 For ex-ample, many of the supporting structures necessary for urban agricul-ture, such as chicken coops, greenhouses, and hoop houses, may not be compatible because of their size, aesthetic design, or placement.98 Ad-

88 See Linda Breggin & Susan George, Planning for Biodiversity: Sources of Authority in

State Land Use Laws, 22 Va. Envtl. L.J. 81, 90 (2003). 89 Id. 90 Parlow, supra note 9, at 515. For example, early ordinances commonly divided their

land into residential, commercial, and industrial districts. See 1 Edward H. Ziegler et al., Rathkopf’s The Law of Zoning and Planning § 10:1 (4th ed. 2009).

91 See 2 Id. § 33:1. A primary use, also known as a principal use, is generally a particular use that is automatically allowed in a district. See 5 Id. § 86:2. An accessory use is “a use which is dependent on or pertains to the principal or main use. . . . When an accessory use attains such magnitude as to no longer be incidental to the principal use, it loses its status as an accessory use.” 2 Id. § 33:3.

92 See Mukherji & Morales, supra note 7, at 4. 93 Id. Generally, “designated agricultural districts [are] in rural areas or on the urban

fringe” and allow a “wide range of agricultural activities,” including intensive agricultural activities. Id.

94 See id. For example, agriculture could be a permitted use in industrial districts but not in residential districts. See id.

95 For example, Culver City, California does not address or define farming or agricul-ture anywhere in its zoning code. See Culver City, Cal., Municipal Code §§ 17.100.005–.700.010 (2005).

96 3 Rathkopf’s The Law of Zoning and Planning, supra note 90, §§ 52–53. 97 See Mukherji & Morales, supra note 7, at 6. 98 See id.


ditionally, requirements of this type often prescribe minimum yard sizes for owners that want to keep animals.99 Zoning codes often make it unintentionally difficult for residents to engage in urban farming.100 Variations between zoning codes in the treatment of agricultural activities make it hard to generalize about how zoning regulations impede urban agriculture.101 However, there are some common problems that fall into one of two categories: restric-tions on the types of agricultural activities permitted in a zoning dis-trict, and restrictions on the scope of business or commercial activity permitted in a zoning district.

B. Restrictions on Raising Animals

Limitations on raising animals in metropolitan areas are among the most common zoning regulations that impact urban farmers. These restrictions can range from an outright ban on keeping farm animals in certain zones,102 to a limit on the number of animals a resident is al-lowed to keep.103 Often there are co-requirements for a resident who is allowed to keep farm animals that dictate the amount of land for each animal and distances the animals have to be kept from residential structures.104 Flint, Michigan is an example of a city whose zoning code, com-bined with the restrictions from other parts of the municipal code, lim-its the ability of residents to have animals as part of their urban farms. This is despite the fact that city has almost 2800 vacant lots, a number that is growing by close to 500 lots per year, and that residents seem ea-ger to use them for agricultural activities.105 The zoning ordinance, which expressly excludes keeping farm animals in residential districts and imposes strict restrictions on keeping poultry within city limits, demonstrates one way zoning codes can restrict raising animals.106 Like most codes, it divides the city into different zoning districts.107 The prin-cipal permitted uses108 allowed in its A-1 single family, low density dis-

99 See id. 100 Id. at 2. 101 See id. at 7. 102 See ENP & Assocs., supra note 10, at 5. 103 See Horsley, supra note 6. 104 See, e.g., Cleveland, Ohio, Codified Ordinances § 347.02(1) (2009). 105 See Shaw, supra note 30. 106 See Flint, Mich., Code of Ordinances § 50-17(d) (2005). 107 Parlow, supra note 9, at 515. 108 Principal Use is defined as “the main use to which the premises are devoted.”

Flint, Mich., Code of Ordinances § 50–1.


trict include “customary agricultural uses . . . , but expressly exclud[e] the keeping of farm animals.”109 Many other residential zoning districts also prohibit keeping farm animals.110 While the term “farm animals” is not defined in the statute, it likely prohibits animals like chickens, bees, and go s.at

as are also required to be ean

laws on the books simply predate the city’s new urban reality.”121

111 Other sections of the Flint Code of Ordinances further regulate the keeping of farm animals in city limits. Chapter 9 directly prohibits keeping chickens: “No poultry or domestic fowl, other than household pets such as canaries and parakeets, shall be kept upon any residentially zoned lot within the City.”112 In areas that are not zoned as residential, a number of restrictions apply to people keeping poultry.113 Owners have to keep an area such as a pen or shelter that provides twenty-five square feet per fowl and the area must be fifty feet from any building used for dwelling purposes.114 These arecl ed every day, and roosters are banned altogether.115 Taken as a whole, these regulations make it difficult in practice for a Flint resident to raise farm animals within city limits.116 They likely were not written specifically to prohibit small-scale urban agriculture, however.117 Rather, they were written at a time when urban agriculture was not a common use of the land.118 In fact, Flint officials do not op-pose urban farming activities.119 The Flint Planning Commission will be drafting proposed ordinance changes based off of recommendations and feedback from community groups interested in promoting urban agriculture.120 “The problem is the

109 Id. § 50–17(d) (emphasis added). 110 Namely: the A-2 single family medium density district; the B two-family district; the

B-1 townhouse district; the C-1 multi-family walk-up apartment district; the C-2 multi-family high density apartment district; and the D-1 office district. Id. §§ 50-21(a), -25(a), -28.1(a), -29(a), -33(a), -38(b).

111 Shaw, supra note 30. 112 Flint, Mich., Code of Ordinances § 9-15.1. 113 See id. §§ 9-15 to -19. 114 Id. §§ 9-16 to -17. 115 Id. §§ 9-18 to -19. 116 See Shaw, supra note 30. 117 See id. 118 See id. 119 See id. 120 See id. 121 See id. “‘The zoning ordinance hasn’t been revised since 1968, when . . . [Flint was]

a booming industrial city and didn’t have to think about agriculture as part of city plan-ning’ . . . .” Id.


C. Restrictions on Agriculture as a Primary Use

While homeowners and renters are generally allowed to grow their own vegetables, fruit, and flowers in their backyards, some municipali-ties limit residents from using whole plots of land for agricultural pur-poses by restricting agriculture as a primary use in certain districts.122 By doing so, municipalities end up prohibiting activities such as a res-taurant owner buying a nearby plot to use for raising crops,123 or turn-ing a vacant public plot into an educational garden with greenhouses and a farm stand.124 For example, Portland, Oregon’s zoning ordinance impedes urban agriculture in two ways: first by having an outright ban in some zones on agriculture as a primary use,125 and second by designating agriculture as a conditional primary use in some zoning districts.126 The Portland Zon-ing Code defines agriculture to include “activities that raise, produce or keep plants or animals.”127 This definition “include[s] breeding or rais-ing of fowl or other animals; dairy farms; stables; riding academies; ken-nels or other animal boarding places; farming, truck gardening, for-estry, tree farming; and wholesale plant nurseries.”128 The Code also lists explicit exceptions that would fall under other use categories, such as “[p]rocessing of animal or plant products, including milk, and feed lots, [which] are classified as Manufacturing And Production.”129 Portland’s Zoning Code defines primary use as: “[a]n activity or combination of activities of chief importance on the site. One of the main purposes for which the land or structures are intended, designed, or ordinarily used.”130 Additionally the code makes clear that a single site can have multiple primary uses.131 In single-dwelling zones,132 whether agriculture is allowed as a primary use varies according to each

122 See Mukherji & Morales, supra note 7, at 5. 123 See Gene Gleeson, Urban Farm Halted over Zoning Laws, KABC-TV/DT (Aug. 3,

2008), http://abclocal.go.com/kabc/story?section=news/local/los_angeles&id=6946703. 124 See Balmer et al., supra note 22, at 25. 125 See Portland, Or., Zoning Code § 33.120-1 (2009). 126 See id. § 33.110-1. 127 Id. § 33.920.500(A). 128 Id. § 33.920.500(C). 129 Id. § 33.920.500(D)(1)–(4). 130 Id. § 33.910.030. 131 Portland, Or., Zoning Code § 33.910.030. 132 Single dwelling zones refer to six different zones: Residential Farm/Forest (RF),

Residential 20,000 (R20), Residential 10,000 (R10), Residential 7,000 (R7), Residential 5,000 (R5), and Residential 2,500 (R2.5). Id. § 33.110.020. The code specifies that “single-dwelling zones are intended to preserve land for housing and to provide housing oppor-tunities for individual households.” Id. § 33.110.010


zone. 133 In multi-dwelling zones,134 however, agriculture is prohibited as a primary use in all six zone types: R3, R2, R1, RH, RX, and IR.135 By banning agriculture as a primary use outright in eight out of twelve residential areas, and defining agriculture in a relatively broad manner, the Portland Zoning Code restricts residents from many varieties of ur-ban agricultural activities.136 Even when agriculture is listed as a conditional use, like residential zones R7 and R10 in Portland,137 it can still hinder urban agricul-ture.138 Conditional uses are uses that are not allowed automatically because they may adversely impact the area, but a resident can petition to have the use approved for their land by going through a review process.139 The process involved with getting a conditional use ap-proved can be burdensome and costly.140 These hurdles may deter ur-ban farmers from going through the review process.141

In Portland, conditional uses are “subject to . . . conditional use regulations because they may, but do not necessarily, have significant adverse effects on the environment, overburden public services, change the desired character of an area, or create major nuisances.”142 The procedures involved with a conditional use review under the Code vary according to the current use of the land and the nature of the conditional use.143 A Portland resident trying to change the primary use of a plot of land to agricultural use or add agriculture as an addi-tional primary use would likely have to go through either a Type II or

133 See id. § 33.110–1. For example, in zones RF and R20, agriculture is automatically al-

lowed. In zones R7 and R10, agriculture is allowed as a conditional use. Finally, in zones R5 and R2.5, agriculture is prohibited as a primary use.

134 Multi-dwelling zones refer to six different zones: Residential 3,000 (R3), Residential 2,000 (R2), Residential 1,000 (R1), High Density Residential (RH), Central Residential (RX), and Institutional Residential (IR). Id. § 33.120.020. The code specifies that “multi-dwelling zones are intended to preserve land for urban housing and to provide opportuni-ties for multi-dwelling housing.” Id. § 33.120.010.

135 See Portland, Or., Zoning Code tbl. 33.120–1. 136 See Balmer et al., supra note 22, at 41. 137 See Portland, Or., Zoning Code § 33.110–1. 138 See Amanda Rhoads et al., Portland Multnomah Food Pol’y Council, The Dig-

gable City Phase II: Urban Agriculture Inventory Findings and Recommendations 30 (2006), available at http://www.portlandonline.com/bps/index.cfm?c=42793.

139 See Portland, Or., Zoning Code § 33.815.010. 140 City of Portland, Or. Bureau of Dev. Servs., Summary of Type I, Type II, Type

IIx, and Type III Procedures 1–2 (2008), available at http://www.portlandonline.com/ bds/index.cfm?a=71804.

141 Rhoads et al., supra note 138, at 3. 142 See Portland, Or., Zoning Code § 33.815.010. 143 Id. § 33.815.040.


Type III conditional use review procedure.144 Both types of review ap-plications are extremely involved.145 A Type II procedure requires an application, notice to all property owners within 150 feet of the site, and can be appealed to a review body such as the Hearings Officer or Design Commission.146 A Type III procedure requires a pre-application conference, public hearing, and can be appealed to the City Council.147 While Portland’s treatment of agriculture in its Zoning Code is considered one of the more permissive,148 the restrictions that remain have been flagged as problematic in a report prepared for the City of Portland on how to make urban agriculture a planning priority.149 The city passed a resolution in November 2004 that “directed various City bureaus to conduct an inventory of their properties, with the goal of determining which might be suitable for either expanding the Com-munity Gardens Program or for future development into other kinds of agricultural uses.”150 Some of the areas highlighted as suitable for grow-ing crops were in zoning districts that prohibited agricultural use.151 For example, one large site owned by the Portland Parks and Recrea-tion Department would “allow[] for an exciting combination of agricul-tural activities” because the land has both permeable and impermeable surfaces.152 The plot is zoned R7, however, which allows agricultural activities only after going through the lengthy conditional use review process.153 Another plot flagged as potentially useful is zoned R5, which permits a community garden, but also prohibits agricultural uses.154 In a follow-up report, “zoning and land use issues” were flagged as some of the most commonly cited barriers to urban agriculture—specifically the fact that “agriculture [is] not allowed in many residential zones.”155

144 See id. § 33.815.040(A)(1)–(2). 145 See City of Portland, supra note 140, at 1–2. 146 See id. at 1. 147 See id. at 2. 148 See Mukherji & Morales, supra note 7, at 5. 149 Rhoads et al., supra note 138, at 3. 150 Balmer et al., supra note 22, at 11. 151 Id. at 25, 54. 152 Id. at 25. 153 Id. 154 Id. at 54. 155 See Rhoads et al., supra note 138, at 3.


D. Restrictions on Selling Products from Urban Farms

Zoning can also unintentionally prohibit residents from growing crops and raising animals for sale.156 Regulations that discourage this kind of entrepreneurial urban agriculture often take the form of ge-neric restrictions on retail and commercial activities in certain zones.157 For example, a municipality may restrict the types of home occupations that are allowed as an accessory use in residential zones.158 Restrictions on primary uses, like the ones discussed in the previous section, are also particularly problematic.159 A municipality may restrict the kind of commercial activities, including agriculture, that are allowed as primary uses in a certain district.160 If urban farmers are only allowed to use their fruits, vegetables, flowers, and eggs for their own personal con-sumption, there would be little incentive to invest any money or time in larger vacant plots, and the farm could not serve as a source of income for the farmers.161 For example, in Culver City, California, a resident can only grow crops for personal use, not for sale.162 The Culver City Zoning Code unintentionally ensures this in at least two ways. First, it restricts home occupations so as to exclude urban agricul-ture as a home business.163 While home occupations are permitted in residential districts, the Code lists certain occupations that are allowed and others that are prohibited.164 The category of allowed uses seems to only include occupations performed within the house.165 Allowed occupations include, among others, “one-on-one art, music and similar fine-art related lessons, and academic tutoring . . . [o]ffice-type uses,”166 and importantly, “[o]ther uses the Director deems to be of the same general character as those listed above, and not detrimental to the ap-plicable residential zoning district and surrounding neighborhood.”167

156 Jerry Kaufman & Martin Bailkey, Farming Inside Cities: Entrepreneurial Urban Agricul-

ture in the United States 77 (Lincoln Inst. of Land Policy, Working Paper No. WP00JK1, 2000), available at http://queencityfarm.org/FarmingInsideCities.pdf.

157 See Mukherji & Morales, supra note 7, at 5–6; Martha Groves, Pocket Farm Could End up Dying on the Vine, L.A. Times, July 31, 2009, at A12.

158 See 2 Rathkopf’s The Law of Zoning and Planning, supra note 90, §§ 33:7–:10. 159 See Mukherji & Morales, supra note 7, at 5. 160 See Groves, supra note 157. 161 See id. 162 Id. 163 See Culver City, Cal., Municipal Code § 17.400.055 (2005). 164 Id. 165 See id. § 17.400.055(A). 166 Id. § 17.400.055(A)(1)–(3). 167 Id. § 17.400.055(A)(6).


The category of prohibited uses includes many home occupations that are performed outside the house. Occupations that are prohibited include “[b]usinesses that involve the breeding, grooming, harboring, raising, or training of dogs, cats, or other animals on the premises,”168 “[c]arpentry and cabinet making,”169 “[p]lant nursery,”170 “[r]etail sales (e.g. stock on hand and customers coming to the home are NOT allowed),”171 and “[o]ther uses determined by the Director not to be incidental to or compatible with residential activities.”172 Raising ani-mals and owning plant nurseries are both activities commonly associ-ated with urban agriculture. Because urban farming is so similar to these activities, which have been deemed “not incidental to or com-patible with residential activities,” the regulation could be interpreted as prohibiting urban farming as a home occupation.173 Moreover, the Code lists operating standards for all home businesses that are not compatible with agricultural activities; for example it requires that the home occupation not be visible from neighboring properties or the street and prohibits the outdoor storage of materials.174

Second, the Culver City Zoning Code limits the sale of produce by excluding agriculture as a commercial activity allowed in other districts as a primary use.175 Two residents encountered this problem when they decided to grow a variety of items on a long-neglected half-acre plot of land.176 They wanted to grow tomatoes, fruit, sunflowers, and spices to use in their restaurant, the Bluebird Café, and then sell any unused produce.177 The owner of the neighboring railroad spur gave them permission to use his land.178 While the land is zoned as a transporta-tion district and not as a residential district,179 the regulations for a transportation district prohibit agricultural activity for profit.180 The Code allows the “operation and maintenance of any transportation

168 Id. § 17.400.055(B)(2). 169 Culver City, Cal., Municipal Code § 17.400.055(B)(3). 170 Id. § 17.400.055(B)(11). 171 Id. § 17.400.055(B)(12). 172 Id. § 17.400.055(B)(15). 173 See id. § 17.400.055(A)(3). 173 See id. § 17.400.055(B). 174 See Culver City, Cal., Municipal Code § 17.400.055(C). 175 See Groves, supra note 157. 176 Id. 177 Gleeson, supra note 123. 178 Groves, supra note 157. 179 Id. 180 See Culver City, Cal., Municipal Code § 17.250.025 (2005).


business,” such as parking areas, railroads, bus lines, airports, etc.,181 but expressly prohibits the “[c]onstruction of any advertising sign or structure and any residential, commercial, industrial or freight storage structure, including above ground parking structures,” which arguably excludes the use of the land for commercial agricultural purposes.182 The larger area is actually a mix of different types of zoning districts, with both industrial and residential zones surrounding the property.183 Nevertheless, residents of nearby neighborhoods seem to be happy about the new use of the land.184 “They’re relieved that the once-neglected property now harbors tomatoes and figs rather than bottles and trash.”185 City officials seem supportive, but acknowledge that the Zoning Code is prohibitive and outdated.186

III. Current Municipal Efforts Aimed at Facilitating Urban Agriculture

Pushed by both advocacy groups and individuals, municipalities are beginning to consider and enact a variety of legislative measures to facilitate urban farming.187 Some are closing legal loopholes that have hindered the growing and selling of produce.188 Others are rewriting parts of their zoning codes to prioritize community gardens or to allow residents to keep a limited number of farm animals.189 Still others are looking to incorporate urban agriculture into their comprehensive plans.190 Many of these efforts seem to be addressing a specific need voiced by the community.191

181 See id. § 17.250.025(A)(1). 182 See id. § 17.250.025(B). 183 Groves, supra note 157. 184 Id. 185 Id. 186 See id. 187 See Mukherji & Morales, supra note 7, at 3. 188 See The Food & Flowers Freedom Act Needs Your Help, Urban Farming Advocates (Oct.

9, 2009, 11:17 AM), http://urbanfarmingadvocates.org/posted_by_ufa/the-food-flowers-freedom-act-needs-your-help/.

189 See Cleveland, Ohio, Codified Ordinances § 347.02 (2009); Ellen Kleinerman, Cleveland Council Approves Urban Farming, Teardown of Foreclosed Homes, Plain Dealer (Feb. 2, 2009, 10:15 PM), http://blog.cleveland.com/metro/2009/02/down_on_farm_in_cleve- land.html.

190 See Mukherji & Morales, supra note 7, at 4. 191 See id. at 3.


A. Los Angeles, California

For example, in Los Angeles, urban farmers found themselves constrained by a 1946 “Truck Gardening Ordinance,” which allowed the off-site sale of vegetables grown in residential areas.192 While osten-sibly the ordinance should have been a boon to urban farmers, allow-ing them to sell produce at places like farmers’ markets, it could have been narrowly interpreted to prohibit residents from growing fruits, nuts, flowers, or seedlings to sell off-site because the ordinance specifies only vegetables.193 The narrow interpretation resulted in situations like that of Tara Kolla, a Los Angeles resident who started a half-acre flower farm in her backyard for the purpose of selling the flowers at the Silver Lake Farmers’ Market.194 Although she operated the farm for six years, growing and selling flowers without a problem, eventually the Building and Safety Inspector informed her that she had to stop selling the flow-ers because the ordinance only allowed the off-site sale of vegetables.195 To remedy situations like Tara Kolla’s, local advocates formed Ur-ban Farming Advocates, to further the mission of legalizing urban farm-ing in Los Angeles.196 They helped to persuade City Council President Eric Garcetti to introduce a motion on July 8, 2009,197 that “would allow ‘the cultivation of flowers, fruits, nuts or vegetables defined as the prod-uct of any tree, vine or plant, and that these products be allowed for use on-site or sale off-site.’”198 The Zoning Code at the time also limited home occupations to those conducted inside the residence and prohib-ited them from being visible from outside the residence, hindering resi-dents from using urban agriculture as a source of income.199 On May 21, 2010, the Los Angeles City Council passed an ordinance that amended the Los Angeles Municipal Code in response to advocates’ concerns.200 Ordinance 181,188 “clarif[ied] the truck gardening and

192 Katherine Spiers, Urban Farms: Where “Vegetable” Is a Murky Term, L.A. Weekly (Nov.

5, 2009), http://www.laweekly.com/2009–11–05/columns/urban-farms-where-vegetable-is-a-murky-term/.

193 See id. 194 See Silver Lake Farms, Silver Lake Farms, http://www.silverlakefarms.com (last vis-

ited Apr. 15, 2011); Spiers, supra note 192. 195 Silver Lake Farms, supra note 194; Spiers, supra note 192. 196 The Food & Flowers Freedom Act Needs Your Help, supra note 188. 197 Id. 198 Spiers, supra note 192. 199 See City of L.A. Dep’t of Planning, Presentation at the Silver Lake Neighborhood

Council Meeting: Truck Gardening Clarification 4 (Mar. 10, 2010), available at http:// urbanfarmingadvocates.org/wp-content/uploads/2010/03/Silverlake-NC-Slideshow-03.10.10. pdf.

200 See L.A., Cal., Ordinance 181,188 (May 21, 2010).


farming uses permitted in each zone, and create[d] consistency be-tween home occupation conditions and standards and truck gardening operations.”201

y properties and pre-nt

B. Cleveland, Ohio

In Cleveland, Ohio, city officials have enacted four different pieces of legislation to help residents participate in urban agricultural activi-ties.202 On February 2, 2009, Cleveland’s City Council approved a Zon-ing Code update that set out detailed regulations for keeping farm animals and bees within city limits in an effort to find “innovative uses for vacant land.”203 The new Code specifies that the “regulations . . . are established to permit the keeping of farm animals and bees in a man-ner that prevents nuisances to occupants of nearbve s conditions that are unsanitary or unsafe.”204 The regulations are detailed but clear. Under the new Code, the standard residential lot of 4800 square feet can house no more than six “chickens, ducks, rabbits and similar farm animals.”205 There are spe-cific setback requirements for the structures housing these animals, including restricting cages or coops to the backyard, and mandating that the structures be located at least five feet from the side property lines and eighteen inches from the rear property lines.206 Non-residential areas have the same requirements, except the number of similar animals is limited to one per 400 square feet.207 Larger animals have stricter requirements.208 No goats, pigs, sheep, or similar animals are allowed on lots less than 24,000 square feet in residential areas.209 Even on lots with 24,000 square feet, only two such animals are al-lowed.210 Housing structures such as stables or run-ins have to be forty

201 Id. 202 See Cleveland, Ohio, Codified Ordinances § 347.02 (2009) (Restrictions on the

Keeping of Farm Animals and Bees); id. § 336 (Urban Garden District); Cleveland, Ohio, Ordinance 814–10 (Oct. 6, 2010) (amending various ordinances related to urban agricul-ture, including facilitating the sale of produce, easing requirements for accessory struc-tures in residential areas, and allowing composting on land used for agricultural pur-poses); Cleveland, Ohio, Ordinance 1202–10 (Sept. 29, 2010) (establishing an urban garden to provide employment to adults with developmental disabilities).

203 See Kleinerman, supra note 189. 204 Cleveland, Ohio, Codified Ordinances § 347.02(a). 205 Id. § 347.02(b)(1??)(A). 206 Id. § 347.02(b)(1)(B). 207 Id. § 347.02(b)(2). 208 See id. § 347.02(c). 209 Id. § 347.02(c)(1). 210 Cleveland, Ohio, Codified Ordinances § 347.02()(1).


feet from any street and most property lines, as well as 100 feet from a house on an adjoining property.211 These restrictions are eased some-what for non-residential districts.212 Regulations on keeping beehives have similar restrictions, in addition to requiring a “flyway barrier” around the entrance to the hive and a fresh supply of water to prevent

es

ept

sites for which urban gardens represent the highest and best use for the

be from “congregating at neighboring swimming pools.”213 The Code even includes additional protections against nuisance concerns.214 Any resident who wants to keep farm animals or bees on any property within city limits is required to apply for approval with both the Department of Building and Housing, to determine if the applica-tion complies with regulations on structure construction and place-ment, such as that of “enclosures, fences, cages, coops, beehives, flyway barriers, stables and other structures,” and the Department of Public Health, to obtain a two-year license.215 Neighbors are notified when a resident files an application, and are allowed to raise objections.216 The Director of the Department of Building and Housing has the authority to inspect properties to determine compliance.217 The Code even in-cludes a six-month review of the effectiveness of the regulation that in-volves a report from the Department of Public Health and the Depart-ment of Building and Housing, as well as a “mobile tour of select locations throughout the City where farm animals and bees are being k in connection with licenses obtained under . . . [the] ordi-nance.”218 Cleveland also passed an ordinance in 2007 that created an “Ur-ban Garden District” zoning designation which allows an area to be re-zoned as a community garden.219 The stated purpose of the ordinance is to “ensure that urban garden areas are appropriately located and protected to meet needs for local food production, community health, community education, garden-related job training, environmental en-hancement, preservation of green space, and community enjoyment on

Ordinances § 347.02(i)–(j).

Codified Ordinances § 347.02(l).

://www.nhlink.net/plainpress/html/stories/2007-09/councilmanintro duc

211 Id. 212 Id. § 347.02(c)(2). 213 Id. § 347.02(d)(1)(A)–(C). 214 See Kleinerman, supra note 189. 215 Cleveland, Ohio, Codified 216 Kleinerman, supra note 189. 217 Cleveland, Ohio, 218 Id. § 347.02(o). 219 Dustin Brady, Councilman Introduces First Zoning Designation for Community Gardens, Plain

Press (Sept. 2007), httpesnewzoning.htm.


community.”220 By creating a specific urban garden district, Cleveland made it more difficult to replace a community garden because its re-moval would be open to public debate through the rezoning process.221 The ordinance was passed to respond to occurrences such as a thriving community garden that was removed to build a new Target store.222

ultimate goal of one community garden for every 2000 households.227

IV. Comp es as a

complexity and increases costs, thus deterring would-be farmers and

C. Seattle, Washington and Madison, Wisconsin

Some cities look to incorporate urban agriculture into their com-prehensive land use plans as a way to support urban agriculture.223 Se-attle, Washington and Madison, Wisconsin have already included com-munity gardens in their comprehensive plans.224 Seattle set a goal of providing one community garden for every 2500 households.225 Madi-son has a section in its plan devoted to agricultural resources that states the goal of “[m]aintain[ing] existing agricultural operations in the City and encourag[ing] new, smaller farming operations.”226 One of the objectives in implementing this goal is to maintain current community gardens and establish new gardens where feasible, with the

rehensive Revision of Municipal Land Use PoliciMethod for Encouraging Urban Agriculture

While municipal efforts to accommodate urban gardening have been useful, many are piecemeal provisions that fail to take a broader view towards addressing urban agriculture.228 Unfortunately, a piece-meal approach can serve to discourage urban farmers because it adds

220 Cleveland, Ohio, Codified Ordinances § 336.01. 221 Brady, supra note 219. 222 Id. (“Since gardeners there did not actually own the land, they had no recourse to

protect their garden. Five other community gardens just like [that garden] . . . have been lost within the last five years alone.”)

223 Kaufman & Bailkey, supra note 156, at 77. 224 City of Madison, City of Madison Comprehensive Plan: Volume II—The Plan:

Goals, Objectives, Policies & Implementation Recommendations 6–16 (2006), available at http://www.cityofmadison.com/planning/comp/plan.html; Kaufman & Bailkey, supra note 156, at 77.

225 Mukherji & Morales, supra note 7, at 4. 226 City of Madison, supra note 224, at 6–16. 227 Id. 228 See supra Part III; see also Kameshwari Pothukuchi & Jerome L. Kaufman, The Food

System: A Stranger to the Planning Field, 66 J. Am. Plan. Ass’n 113, 115 (2000) (lamenting the general lack of involvement in food systems issues by city planning agencies, including issues like community gardens and farmers’ markets).


entrepreneurs.229 To fully utilize urban agriculture as a tool for promot-ing the revitalization of a town or city, officials should consider a more comprehensive approach for incorporating urban agriculture into their zoning regulations.230 Such an approach would involve steps that clarify the city’s support for urban farming, standardize the urban farming activities that are permitted, and facilitate the sale of goods produced from those permitted activities.231 One model for addressing urban agriculture through a municipal zoning ordinance would be a comprehensive, three-step process to re-vising the zoning code. The first step would be to integrate support for urban agriculture into the city’s comprehensive plan.232 This would clarify urban agriculture and its health, environmental, and economic benefits as valid objectives on which to base zoning decisions.233 The second step would be to establish a clear definition of urban agriculture as a use category, and to amend the zoning code to allow urban agricul-ture as a primary and accessory use in a wide range of zoning dis-tricts.234 Consistent definitions and wide acceptance would ensure a conducive legal atmosphere for urban farmers by reducing the time, risks, and costs involved with starting an urban farm.235 The third step would be to amend the zoning code to allow urban agriculture to oper-ate as a home occupation, and explicitly permit either the off- or on-site sale of goods produced by the farm and outside employees with reasonable restrictions.236

A. Step One: Revise the Municipality’s Comprehensive Plan

Because a city’s comprehensive plan is generally where a munici-pality identifies the goals and priorities it seeks to implement through its zoning code, it is an important starting point for a community that is

229 See Mukherji & Morales, supra note 7, at 2; Horsley, supra note 6; Shaw, supra note 30; Spiers, supra note 192.

230 See Mougeot, supra note 18, at 65; Mukherji & Morales, supra note 7, at 3; Kaufman & Bailkey, supra note 156, at 77.

231 See Mukherji & Morales, supra note 7, at 3; Kaufman & Bailkey, supra note 156, at 77. 232 See City of Madison, supra note 224, at 6–16; Land Use Protections for Farmers’

Markets, supra note 86, at 10; Mukherji & Morales, supra note 7, at 3; Kaufman & Bailkey, supra note 156, at 77.

233 See Land Use Protections for Farmers’ Markets, supra note 86, at 10; Mou-geot, supra note 18, at 8–9; Kaufman & Bailkey, supra note 156, at 77.

234 See Rhoads et al., supra note 138, at 9; Mukherji & Morales, supra note 7, at 5; Kaufman & Bailkey, supra note 156, at 77.

235 See Rhoads et al., supra note 138, at 9; Mukherji & Morales, supra note 7, at 5; Horsley, supra note 6; Shaw, supra note 30; Kaufman & Bailkey, supra note 156, at 77.

236 See Mukherji & Morales, supra note 7, at 6; Horsley, supra note 6; Spiers, supra note 192.


committed to encouraging urban farming through land use controls.237 By revising its model ordinances to include support for urban agricul-ture, a municipality can establish urban agriculture as a priority in its communities and set the stage for the revision of its zoning regula-tions.238 When incorporating urban agriculture into its comprehensive plan, a municipality should include its goals and objectives for urban agricul-ture, and the policies and actions it will use to implement those goals and objectives.239 To do this, the muncipality should identify the bene-fits it is hoping to gain from encouraging urban agriculture.240 These benefits may include health, environmental, or economic benefits; for example, access to fresh, local produce, “additional open areas, nutri-tion or job training for their children, community gathering spaces, . . . increased economic opportunities,” or promotion of “community gar-dening opportunities, nonprofit programs or small businesses.”241

Below is model language a municipality could use as a starting place for incorporating urban agriculture into its comprehensive plan.242 The language is based on guidance from the National Policy & Legal Analysis Network to Prevent Childhood Obesity at Public Health Law and Policy recommending how to incorporate community gardens and farmers’ markets into land use policies, as well as the City of Madi-son’s Comprehensive Plan.243 However, it is important to keep in mind that a municipality’s comprehensive plan should not only be tailored to the needs of the community, but also to the existing language structure in the comprehensive plan:244

237 See City of Madison, supra note 224, at 6–16; Nat’l Policy & Legal Analysis Net-

work to Prevent Childhood Obesity, Pub. Health Law & Policy, Establishing Land Use Protections for Community Gardens 2, 4 (2009) [hereinafter Land Use Protec-tions for Community Gardens], available at http://www.nplanonline.org/sites/phlpnet. org/files/CommunityGardenPolicy_FINAL_Updated_100608.pdf; Mukherji & Morales, su-pra note 7, at 4; Kaufman & Bailkey, supra note 156, at 77.

238 See City of Madison, supra note 224, at 6–16; Mukherji & Morales, supra note 7, at 4; Kaufman & Bailkey, supra note 156, at 77.

239 See City of Madison, supra note 224, at 6–16; Land Use Protections for Com-munity Gardens, supra note 237, at 24; Mukherji & Morales, supra note 7, at 4.

240 See City of Madison, supra note 224, at 6–16; Rhoads et al., supra note 138, at 23; Mukherji & Morales, supra note 7, at 4.

241 See Rhoads et al., supra note 138, at 23. 242 See Land Use Protections for Community Gardens, supra note 237, at 8. 243 See City of Madison, supra note 224, at 6–16; Land Use Protections for Com-

munity Gardens, supra note 237, at 8; Land Use Protections for Farmers’ Markets, supra note 86, at 10.

244 See City of Madison, supra note 224, at 6–16; Land Use Protections for Com-munity Gardens, supra note 237, at 8.


B. Model Comprehensive Plan Language to Protect and Expand Urban

Agriculture

Background: Because the City of Compostville recognizes ur-ban agriculture as a desirable activity that creates a more liv-able community, we state the following goals and objectives:

Goal: Encourage the use of urban agriculture in Compostville as a means of increasing access to healthy, local, and afford-able foods, encouraging the productive use of vacant land, and opening up more agriculture-based business opportuni-ties.

• Objective: Encourage appropriate agricultural uses of urban land. • Policies/Actions:

– Adopt zoning regulations that clearly define urban agriculture to include the cultivation of fruits, vegetables, flowers, nuts, and like products, as well as raising farm animals.

– Adopt zoning regulations that discourage health and nuisance hazards sometimes associated with agricultural activities, which may include setback requirements, yard size requirements, complaint procedures, or permitting procedures.

– Appoint a government employee in an appropriate agency who can serve as the point person on urban agricultural questions for residents.

• Objective: Promote more widespread use of urban agriculture. • Policies/Actions:

– Identify additional zoning districts that would be appropriate in which to allow urban agriculture.

– Expand community gardening opportunities.

• Objective: Encourage residents to use urban agriculture as a tool for economic development.

• Policies/Actions: – Adopt zoning regulations that allow urban agriculture as a

home occupation in appropriate districts. – Allow the on-site and off-site sale of products from urban agri-

culture where appropriate.


C. Step Two: Create an Urban Agricultural Use Category and Allow as a Permitted Use in Zoning Districts as Widely as Possible

Municipalities should also consider establishing urban agriculture as a clearly defined use category, and include it as a permitted primary and accessory use in a wide range of zoning districts.245 Doing so would promote widespread urban agriculture246 by creating a clear, commonly allowed set of uses for residents so that uncertainty and bureaucratic barriers to urban farming are reduced.247 Without clear definitions, the “type, function, profitability, and visibility of urban agriculture” is lim-ited.248 In considering how to define urban agriculture as a use, it would be helpful for municipalities to consider the types of uses they want to encourage, as well as the potential impacts from these uses that they hope to minimize.249 To be effective, a zoning code’s description of urban agriculture should be broad enough to include at least the small-scale raising of animals and growing of fruits, vegetables, nuts, flowers, and like prod-ucts.250 The definition of agriculture in the Portland Zoning Code pro-vides a good starting point for municipalities looking to draft an “urban agriculture” use category.251 It defines agriculture to include “activities that raise, produce or keep plants or animals.”252 The Code goes on to list examples and exceptions that help readers flesh out the parameters of the definition.253 “Some accessory structures are permitted, al-though feed lots, food processing, livestock auctions, and retail plant nurseries are specifically mentioned under different use categories.”254 By allowing a broad range of activities to be included in an urban agri-

245 See Rhoads et al., supra note 138, at 9; Mukherji & Morales, supra note 7, at 5;

Kaufman & Bailkey, supra note 156, at 77. 246 See Rhoads et al., supra note 138, at 9; Kaufman & Bailkey, supra note 156, at 77. 247 See Rhoads et al., supra note 138, at 9; Mukherji & Morales, supra note 7, at 5;

Kaufman & Bailkey, supra note 156, at 77. 248 See Rhoads et al., supra note 138, at 9. 249 See City of Madison, supra note 224, at 6–16; Rhoads et al., supra note 138, at 23;

Mukherji & Morales, supra note 7, at 7; Kaufman & Bailkey, supra note 156, at 77; Shaw, supra note 30.

250 See Mukherji & Morales, supra note 7, at 7; Horsley, supra note 6; Kleinerman, supra note 189; Shaw, supra note 30.

251 See Mukherji & Morales, supra note 7, at 5. 252 Portland, Or., Zoning Code § 33.920.500 (2009). 253 Id. 254 See Mougeot, supra note 18, at 5; Mukherji & Morales, supra note 7, at 5; Horsley,

supra note 6; Kleinerman, supra note 189; Shaw, supra note 30; Spiers, supra note 192.


culture use category, a municipality helps remove the barriers hinder-ing responsible urban farming.255

Beyond the basic definition, a use category should then be tailored to fit the aims and address the concerns of the community.256 Cleve-land’s regulation on keeping farm animals and bees is a great example of an effective balancing of competing interests.257 It creates a regula-tion that allows a wide range of activities while closely managing nui-sance concerns.258 In it, chickens, ducks, rabbits, bees, goats, pigs, and sheep can all be kept in residential areas provided that certain re-quirements are met, including minimum yard size requirements ap-propriate to the animal.259 This same approach to balancing nuisance concerns could be applied to creating an urban agriculture use cate-gory—allowing a wide range of activities while maintaining reasonable requirements.260 When designing a use category that attempts such a balance, a municipality should consider whether to include any of the following requirements: yard size requirements, especially for raising animals; setback requirements, again this is especially relevant for rais-ing animals; farming technique requirements—mechanical tools, hand tools, pesticide use; accessory structure design requirements—hoop houses, chicken coops, greenhouses; permit requirements; and com-plaint procedure requirements.261 By defining urban agriculture as a distinctive use, a municipality can clearly communicate, in one zoning code location, the activities an urban farmer is allowed to engage in.262 Creating such an urban agricultural use category is only effective, however, if it is then specified as a permitted primary and accessory use in a number of zoning districts.263 “[T]he existence of an agricultural use category, which is permitted in existing districts, is . . . important for supporting widespread urban agriculture.”264 By allowing urban

255 See Rhoads et al., supra note 138, at 3. 256 See Mougeot, supra note 18, at 5; Mukherji & Morales, supra note 7, at 7; Horsley,

supra note 6; Kleinerman, supra note 189; Shaw, supra note 30; Spiers, supra note 192. 257 See Cleveland, Ohio, Codified Ordinances § 347.02 (2009). 258 See id. 259 See id. 260 See Rhoads et al., supra note 138, at 23; Mukherji & Morales, supra note 7, at 7;

Kaufman & Bailkey, supra note 156, at 77; Shaw, supra note 30. 261 See Cleveland, Ohio, Codified Ordinances § 347.02(i)–(m); ENP & Assocs., su-

pra note 10, at 2, 5; Rhoads et al., supra note 138, at 25–27; Mukherji & Morales, supra note 7, at 5.

262 See Cleveland, Ohio, Codified Ordinances § 347.02(i)–(m); Mukherji & Mo-rales, supra note 7, at 5.

263 See Mukherji & Morales, supra note 7, at 6. 264 Id.


agriculture as a use in more zoning districts, a municipality can make its health, environmental, and economic benefits open to a greater num-ber of residents.

D. Step Three: Specify Urban Agriculture as a Permitted Home Occupation

Lastly, to encourage urban agriculture as a tool for economic revi-talization, a municipality should facilitate the sale of goods produced through urban farming by allowing urban agriculture as a home occu-pation.265 To do so, a municipality that had already defined urban agri-culture as a use category in their zoning code should add it as an ap-proved home occupation under the regulations pertaining to residential zoning districts.266 This would allow a person using the land primarily as a residence to sell what they produce.267

Conclusion

Urban agriculture offers health, environmental, and economic advantages that make it an appealing practice. For example, farming in cities provides increased access to healthy, cheap produce for urban residents, while lowering pollution impacts from transportation and waste products.268 Urban agriculture also has the potential to aid in the economic revitalization of cities through the utilization of vacant land and the potential to use urban agriculture for small business opportu-nities.269 Still, there are concerns typically associated with urban farm-ing, including aesthetic preferences, worries over property value, and more traditional nuisances concerns such as smells.270 Zoning regula-tions are particularly well-suited to balance these concerns and benefits because they are designed to regulate competing land uses and thus should be a starting point for any municipality looking to facilitate ur-ban farming.271 The current steps most municipalities are taking to address the increase in urban agriculture are inadequate.272 While most zoning law reforms are springing from the needs of the community, the solutions

265 See Mukherji & Morales, supra note 7, at 6; Horsley, supra note 6; Spiers, supra note 192. 266 See Mukherji & Morales, supra note 7, at 6; Horsley, supra note 6; Spiers, supra note 192. 267 See Mukherji & Morales, supra note 7, at 6; Horsley, supra note 6; Spiers, supra note 192. 268 See supra Part I.B. 269 See supra Part I.B. 270 See supra Part I.B. 271 See supra Part I.A. 272 See supra Part III.


tend to be piecemeal and can leave would-be urban farmers confused and discouraged.273 To effectively encourage urban agriculture within municipal limits, legislators should take a more comprehensive ap-proach to reforming their zoning regulations.274 Such an approach would clarify the municipality’s support for urban agriculture through revisions to its comprehensive plan, stating goals and objectives for ur-ban agriculture.275 The municipality should then revise the zoning regulations to clearly define urban agriculture as a use category in a manner consistent with its goals, and allow urban agriculture as a pri-mary and accessory use in as many zoning districts as is feasible.276 Lastly, a municipality should allow urban agriculture as a home occupa-tion so residents are able to sell products from their urban farms.277 A municipality that takes this approach can fully leverage the benefits that urban agriculture has to offer while still accounting for nuisance con-cerns.

273 See supra Part III. 274 See supra Part IV. 275 See supra Part IV. 276 See supra Part IV. 277 See supra Part IV.

WOULD A “GOD SQUAD” EXEMPTION UNDER THE ENDANGERED SPECIES ACT SOLVE THE CALIFORNIA WATER CRISIS?

Eric M. Yuknis*

Abstract: The Endangered Species Act’s (ESA) protection of threatened and endangered wildlife has frequently brought the law into conflict with economic interests, including those of government development agen-cies whose actions the statute may prohibit. When an agency wishes to override the protections of the Act, it may turn to a rarely used commit-tee of Cabinet-level officials, known as the “God Squad,” for relief. The ESA empowers the God Squad to evaluate a proposed project and ex-empt the project from ESA requirements if it finds that the benefits of doing so clearly outweigh the benefits of conserving the species. Using prior God Squad rulings as guidance, this Note addresses whether the God Squad is the appropriate avenue to address California’s severe water shortages, caused by both drought and regulatory restrictions on water usage due to ESA protections of a threatened species in the Bay-Delta region of the state.

Introduction

A. Water: A Vital Resource in Short Supply

The world is running out of fresh water suitable for human use.1 While water covers approximately 75% of the Earth’s surface, only 3% of the planet’s total water supply is fresh.2 Of that 3%, 69% of the

* Articles Editor, Boston College Environmental Affairs Law Review, 2010–11. 1 See Leo Lewis, Ecologists Warn the Planet is Running Short of Water, Times (London),

Jan. 22, 2009, http://www.timesonline.co.uk/tol/news/environment/article5562906.ece. It is not entirely accurate to say the world is running out of fresh water. Rather, because natural forces only replenish freshwater reserves at a fixed rate, increased human water use has strained the ability of surface and groundwater sources to replenish in proportion with demand. See U.S. Gov’t Accountability Office, GAO 03-514, Fresh Water Sup-ply: States’ Views of How Federal Agencies Could Help Them Meet the Chal-lenges of Expected Shortages 5 (2003).

2 Steve Graham et al., NASA Earth Observatory, The Water Cycle 1 (2010), avail-able at http://earthobservatory.nasa.gov/Features/Water/water_cycle_2000.pdf; Earth’s Water Distribution, U.S. Geological Surv., http://ga.water.usgs.gov/edu/waterdistribution.html (last modified Feb. 8, 2011).

567


world’s fresh water is locked in frozen glaciers and ice caps.3 An addi-tional 30% of the world’s fresh water is located in both soil and under-ground aquifers as groundwater.4 While groundwater has many domes-tic and industrial uses, harnessing it poses challenges.5 Notably, most groundwater sources do not replenish at a rate sufficient to match hu-man demand, and some geographical areas that utilize groundwater reserves have experienced significant depletion.6 Although 99% of the world’s fresh water is found in ice, soil, or underground aquifers, some of the world’s fresh water can be found in surface water—the water in lakes, swamps, and rivers.7 Surface water makes up only one third of one percent (0.33%) of the planet’s fresh water supply, but accounts for most of the water used by humans.8 An increase in human population causes an increase in residential and in-dustrial water consumption that, combined with limited storage space and public demand to preserve lake and river ecosystems, strains the Earth’s surface water supply.9 Additionally, naturally occurring drought cycles contribute significantly to the strain on fresh water resources.10 The shrinking reserves of available fresh water also have significant economic effects. In industrialized countries like the United States, the

3 Graham et al., supra note 2; Earth’s Water Distribution, supra note 2. 4 Graham et al., supra note 2; See Earth’s Water Distribution, supra note 2. 5 See generally Meena Palaniappan & Peter H. Gleick, Peak Water, in The World’s Water:

2008–2009, at 1 (Peter H. Gleik ed., 2009). For example, groundwater is often located very deep underground, making it inaccessible. Id. at 5. Groundwater near the surface is easily contaminated by industrial byproducts, or salt from the intrusion of underground saltwater. See, e.g., Envtl. Prot. Agency, EPA/540/S-95/500, Groundwater Issue: Light Nonaque-ous Phase Liquids 1 (1995) (describing groundwater contamination by petroleum prod-ucts); Envtl. Prot. Agency, EPA/600/S2–91/064, Project Summary: Identification of Sources of GroundWater Salinization Using Geochemical Techniques 2–3 (1992) (describing sources of salt intrusion into fresh groundwater).

6 See, e.g., U.S. Gov’t Accountability Office, supra note 1, at 13, 52 (noting that “the intense use of ground-water” caused the depletion of “more than half of the ground-water that was available before pumping started” in areas of the western United States, resulting in a level that “makes the aquifer no longer economical to use”).

7 See Earth’s Water Distribution, supra note 2. 8 See Earth’s Water Distribution, supra note 2; U.S. Geological Surv., Fact Sheet 2009-

3098, Summary of Estimated Water Use in the United States in 2005, at 1 (2009) [here-inafter USGS Fact Sheet], available at http://pubs.usgs.gov/fs/2009/3098/pdf/2009-3098. pdf. In 2005, approximately 80% of the water drawn for use in the United States was surface water, and 20% was groundwater. USGS Fact Sheet, supra, at 1.

9 See U.S. Gov’t Accountability Office, supra note 1, at 5–7. Global climate change may cause the amount of available surface water to decrease over time, further increasing the risk of future water shortages. See Cong. Budget Office, Potential Impacts of Cli-mate Change in the United States 10–12 (2009).

10 See Betsy A. Cody et al., Cong. Research Serv., R40979, California Drought: Hydrological and Regulatory Water Supply Issues 2–3 (2009).

2011] Can the God Squad Solve the California Water Crisis? 569

stability of large sectors of the economy depends upon access to wa-ter.11 According to the Department of the Interior, domestic water con-sumption accounts for only 18% of the country’s total water use,12 while 33% is devoted to agricultural application, and 59% is used for industrial purposes.13 With so much dependent on an available supply of fresh water, it is little wonder that water access is a source of conflict between economic and environmental interests in the United States.14 Perhaps nowhere is this struggle over water more evident than in Cali-fornia.

-sources and made the state particularly vulnerable during droughts.19

B. Agriculture in the Arid West

The western United States is an arid place, subject to cyclical peri-ods of drought.15 Nonetheless, the West is home to a thriving agricul-tural industry made possible by modern irrigation techniques.16 In 2005, “[o]f the total irrigation in the United States, 85 percent of the [water] withdrawals and 74 percent of the acres irrigated were in 17 conterminous Western States.”17 California, despite its dry climate, supplies 50% of the fresh produce grown in the United States.18 A growing population, combined with increasing agricultural output which relies heavily on irrigation, has strained California’s water re

11 See, e.g., Cal. Dep’t of Water Res., California Drought—An Update: December

2009

011). By o

lexandra Alter, Yet Another “Footprint” to Worry Abou

ate Change, Regulatory Fragmentation, and Water Triage, 79 U. Col

RL34580, Drought in the Uni

17 (2009), available at http://www.pacinst.org/reports/california_ agri

ry 2008

, at 37 (2009) (noting the effect of drought on agriculture industry and employment). 12 Water Facts—Worldwide Water Supply, Bureau Reclamation U.S. Dep’t Interior,

http://www.usbr.gov/mp/arwec/news/water_facts_worldwide.html (last visited Apr. 15, 2ne estimate, eighty gallons of water are used to produce a single ear of corn. Id. 13 Id. Power plants use 136 billion gallons of fresh water each day, while farm irrigation

consumes an additional 142 billion gallons, over three times more than daily domestic use. How Do We Use Water?, U.S. Envtl. Protection Agency, http://www.epa.gov/watersense/ water_efficiency/how_we_use_water.html (last visited Apr. 15, 2011). It can take five hundred gallons of water to make a pair of Levi’s jeans. A

t: Water, Wall St. J., Feb. 17, 2009, at A11. 14 See Robin Kundis Craig, Clim

o. L. Rev. 825, 866 (2008). 15 See Peter Folger et al., Cong. Research Serv., ted States: Causes and Issues for Congress 2 (2010). 16 See Heather Cooley et al., Pac. Inst., Sustaining California Agriculture in

an Uncertain Futureculture/final.pdf. 17 USGS Fact Sheet, supra note 8. 18 Cal. Dep’t of Food & Agric., California Agricultural Resource Directo–2009, at 5–6 (2008), available at www.cdfa.ca.gov/statistics/files/CDFA_Sec1.pdf.

19 See State of Cal., Dept. of Fin., E-4 Population Estimates for Cities, Counties, and the State 1 (2010) [hereinafter Population Projections], available at http://www. dof.ca.gov/research/demographic/reports/view.php#objCollapsiblePanelEstimatesAnchor.


California experienced a prolonged period of continuous drought that began more than three years ago.20 The abnormally dry conditions put a strain on the state’s economy, particularly in the Central Valley region.21 The farmers in the San Joaquin Valley have been significantly affected by these water shortages, as they rely on irrigation from pump-ing stations in California’s Bay-Delta region.22 Many of the more profit-able crops grown in the region, like rice and cotton, require large amounts of water. Thus irrigation is vital for the economic success of the local agricultural industry.23 The health of the Bay-Delta ecosystem is also important because most of California’s drinking water passes through the Delta.24 While drought and high demand for water resources are the pri-mary causes of the California water shortage, an unlikely villain has emerged to grab the ire of a diverse group of opponents. The delta smelt—a tiny three inch silver fish—has been blamed for the crisis.25 To understand why the fish’s listing as a threatened species has had such a profound effect on California’s water supply, one must first understand the basic operation of the Endangered Species Act.

Between 1998 and 2007, California farmers’ cash receipts for milk increased from $4.14 billion to $7.33 billion, and receipts for almonds grew from $0.7 billion to $2.13 billion. Cal. Dep’t of Food & Agric., supra note 18, at 17. In that same time span, the State esti-mates that its population increased by almost five million people. See Population Projec-tions, supra at 1.

20 Cal. Dep’t of Water Res., supra note 11, at 1. 21 See Cal. Dep’t of Fish & Game, California Wildlife: Conservation Challenges

171 (2007) (almost half of State’s residents live in the South Coast region, which makes up less than ten percent of the state’s land area); Cody et al., supra note 10, at Summary; Press Release, Office of Governor Arnold Schwarzenegger, Gov. Schwarzenegger Takes Action to Address California’s Water Shortage (Feb. 27, 2009), http://gov.ca.gov/press-release/11556.

22 See Cal. Dep’t of Water Res., supra note 11, at 41. Estimates of actual job loss vary. See Bus. Forecasting Ctr., Univ. of the Pac., Unemployment in the San Joaquin Val-ley in 2009: Fish or Foreclosure? 1, 3 (2009), available at http://forecast.pacific.edu/ articles/PacificBFC_Fish%20or%20Foreclosure.pdf.

23 See Cal. Dep’t of Food & Agric., supra note 18, at 22 (showing cotton and rice as the fifth and eighth top agricultural exports, respectively); Cooley, supra note 16, at 7.

24 Jay Lund et al., Pub. Pol’y Inst. of Cal., Envisioning Futures for the Sacra-mento-San Joaquin Delta 4 (2007).

25 Compare Op-Ed., California’s Man-Made Drought, Wall St. J., Sept. 2, 2009, at A14 (calling for an end to federal protection for delta smelt, citing the fish as a cause of the California water shortage), and Cal. Dep’t of Water Res., supra note 11, at 2 (citing fed-eral delta smelt protection order as a major cause of the water shortage), with U.S. Dep’t Interior, Reality Check: California’s Water Crisis 1–2 (2009), available at http:// www.doi.gov/documents/CA_Water_Reality_Check.pdf (disputing that delta smelt protections are the cause of the California water shortage).


I. Endangered Species Act

Enacted in 1973, the Endangered Species Act’s (ESA) primary purposes are to “provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, [and] to provide a program for the conservation of such endangered species and threatened species.”26 The Act is primarily administered by Interior’s Fish and Wildlife Service (FWS).27 FWS “has primary respon-sibility for freshwater and land species.”28

A. Threatened and Endangered Species

The Act defines an “endangered species” as one that is “in danger of extinction throughout all or a significant portion of its range.”29 It defines “threatened species” as “any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.”30 FWS protects threatened and en-dangered species through regulations designed to meet the species’ needs based on the best scientific data available.31 In order to receive protection under the ESA, a particular species must be listed as “threatened” or “endangered.”32 The listing process is

26 Endangered Species Act § 2, 16 U.S.C. § 1531(b) (2006). 27 M. Lynne Corn et al., The Endangered Species Act: A Primer, in The Endangered Spe-

cies Act: Primer, Evaluation and Prospects 83, 89 (Harold B. Carleton Jr. ed., 2009). The National Marine Fisheries Service administers the ESA with respect to “[m]arine spe-cies, including some marine mammals and anadromous fish.” Id.

28 See U.S. Gov’t Accountability Office, GAO-06-730, Endangered Species: Many Factors Affect the Length of Time to Recover Select Species 1 (2006).

29 16 U.S.C. § 1532(6). 30 Id. § 1532(20). 31 See id. § 1536(2), (3)(c). Under section 4 of the Act, “the Secretary [of the Interior]

shall issue regulations as he deems necessary and advisable to provide for the conservation of [threatened] species.” Id. § 1533(d). Furthermore, the Secretary may extend to “threat-ened” species explicit protections typically afforded to species listed as “endangered” un-der the Act. Id.

32 Section 4 of the ESA governs the listing process. See 16 U.S.C. § 1533; see also U.S. Fish & Wildlife Serv. (FWS), Listing a Species as Threatened or Endangered: Sec-tion 4 of the Endangered Species Act 1–2 (2009) [hereinafter Section 4 Listing], available at http://www.fws.gov/endangered/esa-library/pdf/listing.pdf. According to the FWS’s Threatened and Endangered Species (TESS) Database System, as of May 17, 2011, a total of 1374 species of plants and animals were listed as either threatened or endangered in the United States. See TESS Database System, Fish & Wildlife Serv., http://ecos. fws.gov/tess_public/TESSBoxscore (last updated May 17, 2011). For the current total number of species listed as endangered or threatened, updated daily, visit the TESS Data-base System. See id.


as accessible one.33 Any “interested person” —including individual citi-zens, environmental groups, and federal, state, or local agencies—may file a petition with FWS to add a species to the lists of endangered or threatened species.34 If the Secretary determines that evidence submit-ted with the petition “presents substantial scientific or commercial in-formation indicating that [inclusion on the threatened or endangered species lists] may be warranted” 35 FWS will initiate a review of the status of the species in question, by assessing the potential threats to the can-didate species.36 The Secretary must make a listing determination “solely on the ba-sis of the best scientific and commercial data available” at the time of the review.37 Although the effect of commercial activity on a wildlife population is a factor in determining whether a species is at risk of ex-tinction, the ESA does not allow the Secretary to consider the effects of listing a species on economic interests.38 Simply put, the ESA prohibits Interior from engaging in a cost-benefit analysis to determine if a par-ticular species is economically worth preserving.39 If the relevant scien-tific and commercial information indicates that a species is at risk of extinction, then it must be listed.40 The United States Supreme Court reinforced the supremacy of the ESA’s conservation objective over eco-nomic considerations in Tennessee Valley Authority v. Hill.41 Chief Justice Burger, writing for the majority, stated that “[t]he plain intent of Con-gress in enacting this statute was to halt and reverse the trend toward species extinction, whatever the cost.”42 Concurrent with the Secretary’s determination that a species is properly classified as threatened or endangered, Interior must also des-ignate the species’ “critical habitat.”43 A species’ “critical habitat” refers

33 See generally 16 U.S.C. § 1533 (listing process). 34 See id. § 1532(13) (broad definition of “person” under the ESA); id. § 1533(b)(3)(A);

see also Section 4 Listing, supra note 32, at 2. 35 See 16 U.S.C. § 1533(b)(3)(A). 36 Id. § 1533(a)(1). (“The Secretary [of the Interior] shall . . . determine whether any

species is an endangered species or a threatened species because of any of the following factors: (A) the present or threatened destruction, modification, or curtailment of its habi-tat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mecha-nisms; or (E) other natural or manmade factors affecting its continued existence.”)

37 Id. § 1533(b)(1)(a) (emphasis added). 38 See id. § 1533(a)(1). 39 See id. See generally Tennessee Valley Auth. v. Hill, 437 U.S. 153 (1978). 40 See 16 U.S.C. § 1533(a)(1). 41 See Hill, 437 U.S. at 184, 187–88. 42 See id. at 184 (emphasis added). 43 See 16 U.S.C. § 1533(3)(A).


to “specific areas . . . occupied by the species, at the time it is listed . . . on which are found those physical or biological features” that are “es-sential to the conservation of the species” and “which may require spe-cial management considerations or protections.”44 Similar to the re-quirements for determining whether a species qualifies for listing as threatened or endangered, the ESA requires that the Secretary make critical habitat designations “on the basis of the best scientific data available.”45 Unlike the requirements for listing a species, however, the ESA allows a limited cost-benefit analysis when determining where to locate critical habitats.46 The Secretary may consider the economic effects of locating a critical habitat in a particular geographic area,47 and “may exclude any area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat . . . .”48 Nonetheless, this discretion is limited by the ESA’s directive not to exclude an area from critical habitat designa-tion if the best scientific data available indicates that “failure to desig-nate such area as critical habitat will result in the extinction of the spe-cies concerned.”49 In other words, Interior must designate a reasonable amount of critical habitat that will allow the species to survive, but has discretion to locate those areas in economically friendly places, if avail-able.50 If a threatened or endangered species, like the delta smelt, ex-ists only in a small geographical area, Interior may have little discretion concerning what habitat to list as critical.51

B. Regulatory Enforcement Under the Endangered Species Act

The ESA protects threatened wildlife and conserves critical habi-tats primarily through the use of three regulatory provisions.52 The first

44 Id. § 1532(5)(A). 45 See id. § 1533(b)(2). 46 See id. (allowing cost-benefit considerations); cf. id. § 1533(a)(1) (failing to include

economic factors in listing considerations). 47 See id. § 1533(b)(2). 48 16 U.S.C. § 1533(b)(2). 49 Id. 50 See id. 51 See id.; FWS, Formal Endangered Species Act Consultation on the Proposed Co-

ordinated Operations of the Central Valley Project (CVP) and State Water Project (SWP) 145 (2008) [hereinafter Biological Opinion] (noting that the delta smelt spends its entire life in California’s Bay-Delta region).

52 See 16 U.S.C. § 1531 (purpose of ESA); id. § 1536(a)(2) (no-jeopardy provision); id. § 1538(a)(1)(A) (commercial use ban); id. § 1538(a)(1)(B) (no-take provision).


is a general ban on the commercial use of endangered animals, includ-ing the import, export, sale, or transport of any listed species.53 The commercial-use ban is designed to reduce the international market for trade in endangered wild animals.54 A second regulatory provision of the ESA prohibits the “taking” of endangered species.55 The Act defines a “take” as any action meant to “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect” an endangered animal.56 However, federal regulations have expanded the definition of “harm” to include acts that result in “significant habitat modification or degradation [that] kills or injures wildlife by signifi-cantly impairing essential behavioral patterns, including breeding, feed-ing or sheltering,” thereby protecting species from a wide variety of po-tentially harmful human behavior.57 A third regulatory tool designed to protect threatened or endan-gered wildlife can be found in the ESA’s section 7 “no-jeopardy” provi-sion.58 This section prohibits federal agencies from engaging in any action that is “likely to jeopardize the continued existence of any en-dangered species or threatened species or result in the destruction or adverse modification of [critical] habitat of such species . . . unless such agency has been granted an exemption” by the Endangered Species Committee.59 This committee is known as the “God Squad” due to its ability to exempt federal actions, thereby enabling the possible extinc-tion of a species.60 A section 7 “agency action” includes “any action authorized, funded, or carried out by” a federal agency.61 Because the federal gov-ernment authorizes a great deal of activity, section 7 of the ESA has

53 See id. § 1538(a)(1)(A). 54 See FWS, ESA Basics: More than 20 Years of Conserving Endangered Species 1

(2008), available at http://www.fws.gov/endangered/esa-library/pdf/ESA_basics.pdf. 55 See 16 U.S.C. § 1538(a)(1)(B),(C). 56 Id. § 1532(19). 57 See 50 C.F.R. § 17.3 (2010). 58 See 16 U.S.C. § 1536(a)(2). An “agency action” includes “any action authorized,

funded, or carried out by any [Federal] agency.” Id. 59 See id. 60 Id.; see Ted Gup, Essay: Down With The God Squad, Time, Nov. 5, 1990, available at

http://www.time.com/time/magazine/article/0,9171,971548,00.html (popular use of term “God Squad”). The term “critical habitat” is defined as “specific areas . . . occupied by the species . . . on which are found those physical or biological features (I) essential to the con-servation of the species and (II) which may require special management considerations or protection.” 16 U.S.C. § 1532(5)(A).

61 Id. § 1536(a)(2). “Federal Agency” is defined as “any department, agency, or instru-mentality of the United States.” Id. § 1532(7).


wide implications, and has been the source of great conflict between environmental and economic interests.62 If any agency action is likely to jeopardize a threatened or endan-gered species or its critical habitat, then the ESA requires that the agency proposing the action formally consult with FWS regarding the potential harm to listed species.63 The purpose of the consultation is “to assist the Federal agency and any applicant [in] identifying and re-solving potential conflicts” as early as possible.64 During the consulta-tion process, FWS develops a biological opinion based on the best available scientific data.65 The biological opinion must include a “de-tailed discussion of the effects of the action on listed species or critical habitat,” as well as a “summary of the information on which the opin-ion is based.”66 If FWS determines that the proposed action would jeopardize a listed species, the biological opinion must advise the acting agency of any “reasonable and prudent alternatives” that would bring the action into compliance with the ESA.67 If FWS determines that no such alternatives exist, then the agency action is barred.68

C. The God Squad and Its Exemption

Initially, the ESA did not contain any reference to the God Squad.69 However, because the original ESA strongly emphasizes the conserva-tion of wildlife, and did not allow weighing human economic interests against the survival of an animal species, it was inevitable that critical

62 See Zygmunt J.B. Plater, Endangered Species Act Lessons Over 30 Years, and the Legacy of the

Snail Darter, a Small Fish in a Pork Barrel, 34 Envtl. L. 289, 292, n.13 (2004) (discussing politi-cal and industrial opposition to the ESA); Patrick W. Ryan & Erika E. Malmen, Interagency Consultation Under Section 7, in Endangered Species Act: Law, Policy and Perspectives 104, 106 (Donald C. Baur & WM. Robert Irvin eds., 2d ed. 2010) (describing ways in which Federal agency action may be implicated in otherwise private or state-level activity).

63 See 16 U.S.C. § 1536(a); 50 C.F.R. § 402.10 (2010). 64 50 C.F.R. § 402.10. 65 See 16 U.S.C. § 1536(b)(3)(A); 50 C.F.R. § 402.14(g)–(h). 66 50 C.F.R. § 402.14(h). 67 Id. § 402.02, -.14(h). (“Reasonable and prudent alternatives [are] alternative actions

identified during formal consultation that can be implemented in a manner consistent with the intended purpose of the action, that can be implemented consistent with the scope of the Federal agency’s legal authority and jurisdiction, that is economically and technologically feasible, and that [Fish and Wildlife] believes would avoid the likelihood of jeopardizing the continued existence of listed species or resulting in the destruction or adverse modification of critical habitat.”).

68 See 16 U.S.C. § 1536(a)(2); 50 C.F.R. § 402.14. 69 Ryan & Malmen, supra note 62, at 118 (noting the Endangered Species Committee

was added to ESA); see Portland Audubon Soc’y v. Endangered Species Comm., 984 F.2d 1534, 1537 (9th Cir. 1993) (referring to nickname “God Squad”).


habitat designations would directly conflict with business and industrial interests.70 In response, Congress amended the ESA in 1978 to allow for an exemption from section 7’s requirements.71 The God Squad itself is made up of seven members, chaired by the Secretary of the Interior.72 Other members include the Secretaries of Agriculture and the Army, the Administrators of the Environmental Protection Agency (EPA) and the National Oceanic and Atmospheric Administration, as well as the Chairman of the Council of Economic Advisors.73 The seventh member is a presidential appointee from the state affected by the agency action.74 A vote of five members is suffi-cient to grant an exemption from section 7’s no-jeopardy require-ment.75 An exemption to the no-jeopardy requirement granted under section 7 also exempts the agency action from the ESA’s prohibition on the illegal “taking” of endangered species, making the extinction of the species a genuine possibility.76

Only a few enumerated parties who have met the procedural con-sultation requirements of the ESA can request a God Squad exemp-tion.77 These parties include “Federal agenc[ies], the Governor of the State in which an agency action will occur . . . or a permit or license ap-plicant.”78 Once an authorized party has requested an exemption, and the Secretary of the Interior has determined that all procedural re-quirements have been met, public hearings on the exemption applica-

70 See, e.g., Tennessee Valley Auth. v. Hill, 437 U.S. 153 (1978) (discussing conflict be-

tween endangered fish and hydroelectric dam project); Portland Audubon Soc’y, 984 F.2d at 1537 (discussing conflict between threatened owls and timber industry).

71 See 16 U.S.C. § 1536(e) (God Squad provision); Zygmunt J.B. Plater et al., Envi-ronmental Law and Policy: Nature, Law, and Society 800 (3d ed. 2004); Ryan & Malmen, supra note 62, at 118. See generally Hill, 437 U.S. at 153. For a thorough discussion of the snail darter’s conflict with the Tennessee Valley Authority’s Tellico Dam project, see Kenneth Murchison, The Snail Darter Case: TVA Versus the Endangered Species Act (2007).

72 See 16 U.S.C. § 1536(e)(3), (5)(B). 73 Id. § 1536(e)(1)(3). 74 Id. § 1536(e)(1)(3)(G). 75 Id. § 1536(e)(5)(A). 76 See id. § 1536(o); Gup, supra note 60. 77 See 16 U.S.C. § 1536(g)(1). To be eligible to request an exemption, the requesting

party must have: (1) made a good-faith effort to “develop and fairly consider . . . reason-able and prudent alternatives to the proposed agency action” which would not violate the ESA; (2) conducted any biological assessment required by the ESA; and (3) refrained from making an “irreversible or irretrievable commitment of resources” in furtherance of the proposed action. Id. § 1536(g)(3).

78 Id. § 1536(g).


tion are held to elicit more information on which the God Squad may base its decision.79 After public hearings have further developed the record, the God Squad members vote on the exemption.80 The ESA authorizes a balanc-ing test to determine if the God Squad should grant the exemption, taking into account the public’s interest in conserving wildlife and its interest in the completion of the agency action.81 The ESA provides that the God Squad may grant the exemption if five of its members de-termine, based on the record, that:

(i) there are no reasonable and prudent alternatives to the agency action; (ii) the benefits of such action clearly outweigh the benefits of alternative courses of action consistent with conserving the species or its critical habitat, and such action is in the public interest; (iii) the action is of regional or national significance; and (iv) neither the Federal agency concerned nor the exemption applicant made any irreversible or irretrievable commitment of resources [in furtherance of the barred agency action].82

The God Squad’s decision to grant an exemption is judicially review-able under the Administrative Procedures Act.83 The God Squad has sixty days to reverse an exemption before it becomes permanent.84 Furthermore, the ESA requires that if the God Squad grants an exemption, it must establish “such reasonable mitiga-tion and enhancement measures, including, but not limited to, live propagation, transplantation, and habitat acquisition and improvement, as are necessary and appropriate to minimize the adverse effects of the agency action upon the endangered species, threatened species, or

79 See id. § 1536(g)(4)–(5). 80 See id. § 1536(h)(1). 81 See id. 82 Id. The fourth requirement prevents a federal agency from investing additional

money into a project which FWS has determined will jeopardize a species, and then using that investment as justification for a God Squad exemption under the economic prong. Essentially, the ESA provides that an agency driving up the cost of such a project waives its right to request a God Squad exemption, and no such circumstance exists here. See id.

83 See 16 U.S.C. § 1536(n) (reviewable under Administrative Procedures Act); Adminis-trative Procedures Act, 5 U.S.C. § 706 (2006).

84 See 16 U.S.C. § 1536(h)(2)(B).


critical habitat concerned.”85 However, there is no requirement that these mitigation efforts be successful.86

II. Prior Use of the God Squad Exemption

The ESA’s exemption process has been infrequently used.87 Since Congress authorized God Squad exemptions, only six applications have ever been formally filed.88 Of those applications, three were withdrawn, while the God Squad convened to reach a decision on the other three.89 The first two applications—concerning the snail darter and the whooping crane—were decided on the same day in January 1979.90 In more than thirty years since these first hearings, the God Squad has made only one additional exemption decision—a 1992 decision con-cerning the northern spotted owl’s habitat.91 Two factors may contribute to the infrequent use of the God Squad exemption.92 First is the social and political pressure put on the members of the God Squad to avoid extreme acts such as approving an exemption that could lead to the extinction of an entire species.93 This may be particularly true in light of polls showing strong citizen support for the protection of endangered species, even if the species’ value to humans is not apparent.94 The second factor is the design of the amendment’s language, which puts numerous procedural hurdles before parties seeking an ex-emption.95 These procedures require applicants to research and con-sider a full array of possible alternatives to the harmful agency action before applying for an exemption.96 Additionally, any exemption will come with potentially burdensome mitigation requirements imposed

85 Id. § 1536(h)(1)(B). 86 See id. § 1536(h). 87 See Corn et al., supra note 27, at 103; Ryan & Malmen, supra note 62, at 118. 88 Corn et al., supra note 27, at 103. 89 Id. 90 See Murchison, supra note 71, at 206 (snail darter application rejected by Endan-

gered Species Committee on Jan. 23, 1979); Corn et al., supra note 27, at 107 (whooping crane application approved by Endangered Species Committee on Jan. 23, 1979).

91 Corn et al., supra note 27, at 108. 92 See Plater et al., supra note71, at 803 (describing the exemption mechanism as

“rigorous and embarrassing”); Stanford Envtl. L. Soc’y, The Endangered Species Act: A Stanford Environmental Law Society Handbook 101 (P. Stephanie Easley et al. eds., 2001) (describing the exemption mechanism as “cumbersome”).

93 See Plater, supra note 62, at 307. 94 See id. 95 16 U.S.C. § 1536(g) (2006); see also Stanford Envtl. L. Soc’y, supra note 92, at 101. 96 See 16 U.S.C. § 1536(g).


by the God Squad.97 Despite these hurdles, agencies have on six occa-sions requested God Squad exemptions, three of which made it before the Committee.98 The Committee has voted once to deny an agency’s request, and twice in favor of exemption.99 The three God Squad ex-emption decisions are discussed below.

A. The Snail Darter: How the God Squad Came to Be

The Tennessee Valley Authority (TVA), a federal agency responsi-ble for hydroelectric dam development, sought to complete its $100 mil-lion Tellico dam project at the tail end of the Little Tennessee River.100 The project would flood at least 13,500 acres, and require the additional acquisition of more than 16,000 acres of land along the newly created shoreline property, which would then be sold to private developers for a profit.101 TVA justified the action by claiming that the cost-benefit ratio would be 1.4 to 1 in favor of the project.102 The project faced immediate opposition from local landowners whose property would be flooded when the Tellico dam closed, as well as from those whose land would be condemned by the government for economic development and resale.103 The dam was not yet complete in 1973 when a biologist discovered a previously unknown species of perch, called the snail darter, living in the remaining free-flowing part of the Little Tennessee River.104 Congress passed the ESA four months later, and the opponents of the Tellico dam subsequently petitioned the Secretary of the Interior to list the snail darter as an endangered species.105 Interior listed the snail darter as endangered on October 8,

97 See id.; Corn et al., supra note 27, at 106 (noting that “the exemption applicant is . . . responsible for carrying out and paying for mitigation” and must make annual reports to the Council on Environmental Quality on the mitigation efforts).

98 See Corn et al., supra note 27, at 103. 99 See id. at 107–08. 100 See Tennessee Valley Auth. v. Hill, 437 U.S. 153, 157, 172 (1978). 101 Murchison, supra note 71, at 18–19. 102 Id. at 16–18; see Hill, 437 U.S. at 157. 103 See Murchison, supra note 71, at 19, 21. Further, because the reservoir would flood

land particularly significant to the Cherokee Nation, and land containing several historic and archeological sites, natives and a citizen’s group dedicated to historic preservation joined in opposition to the dam. See id. at 20; see also Hill, 437 U.S. at 156–57. Because the undammed portion of the Little Tennessee River was one of the best trout fishing loca-tions in the country, a group of trout fishermen joined the opposition in an attempt to preserve the free-flowing water. See Hill, 437 U.S. at 156; Murchison, supra note 71, at 19.

104 See Murchison, supra note 71, at 22; Plater et al., supra note 71, at 779. 105 See Hill, 437 U.S. at 160–61. Information available at the time put the total snail

darter population between 10,000 and 15,000, and identified its only known habitat as the last remaining undammed portion of the Little Tennessee River. Id. at 159, 162.


1975, and determined that if the project were finished, “the proposed impoundment of water behind the proposed Tellico Dam would result in total destruction of the snail darter’s [critical] habitat.”106 Tellico dam opponents filed suit to enjoin the TVA from complet-ing the dam, claiming that the destruction of the snail darter’s habitat would violate section 7 of the ESA.107 The district court refused to issue an injunction, finding that Congress did not intend section 7 to apply to ongoing projects close to completion.108 The Sixth Circuit re-versed,109 and the Supreme Court upheld the reversal.110 In the land-mark case Tennessee Valley Authority v. Hill, the Court found that the ESA did not allow for cost-benefit analysis, and therefore mandated that the Tellico dam construction cease, even if that meant the loss of $100 mil-lion already invested in the project.111 The political fallout from the decision led industry groups, fearful of the strength of the section 7 mandate, to pressure Congress to enact the 1978 amendments, creating the God Squad.112 The God Squad convened to decide the fate of the snail darter immediately after the amendment’s passage.113 The God Squad’s first decision was a unani-mous denial of the Tellico dam exemption.114 The Committee found that the economic benefits of completing the dam did not significantly outweigh the associated costs.115 The evidence prompted the sitting chairman of the God Squad, Secretary of the Interior, Cecil Andrus, to describe the Tellico dam project as “‘ill-conceived and uneconomic in the first place.’”116

106 Id. at 161–62 (quoting 40 Fed. Reg. 47,505–06 (Oct. 9, 1975)). 107 See 16 U.S.C. § 1536(a) (2006); Hill, 437 U.S. at 164. 108 See Hill v. Tennessee Valley Auth., 419 F. Supp. 753, 760 (E.D. Tenn. 1976), rev’d,

549 F.2d 1064 (6th Cir. 1977). 109 Hill, 549 F.2d at 1070, 1075. 110 Hill, 437 U.S. at 187–88. 111 Id. 112 See Plater et al., supra note 71, at 799–801; J. Michael Scott et al., Introduction to 1

The Endangered Species Act at Thirty: Renewing the Conservation Promise 8–9 (Dale D. Gobel et al. eds., 2006). Kenneth Murchison notes that conservative critics of the ESA considered the Hill decision a “triumph of environmental ideology over common sense.” Murchison, supra note 71, at 4.

113 Id. note 71, at 154. The 1978 amendments provided an expedited process for the God Squad to begin hearings on the Tellico dam matter within thirty days of the amend-ment’s passage, bypassing the application requirements. Id.

114 See Plater et al., supra note 71, at 801. 115 See id. 116 Id. (quoting Secretary of the Interior, Cecil Andrus).


B. The Whooping Crane

At the same time that the God Squad convened to hear the snail darter case, it also convened to hear the case of the whooping crane.117 While the TVA tried to complete the Tellico dam, another develop-ment agency, the Rural Electrification Administration, sought to com-plete the Grayrocks dam in Wyoming’s Laramie River.118 The dam’s closure threatened the downriver habitat in Nebraska supporting the endangered whooping crane.119

At one time, the whooping crane was a national symbol of the growing problem of endangered species.120 In the late 1930s and early 1940s, the total population of surviving whooping cranes hovered near twenty birds.121 Therefore, it is ironic that the God Squad unanimously granted its first and only full exemption in a case involving this ex-tremely imperiled species.122 However, as Shannon Petersen notes in Acting for Endangered Spe-cies, this exemption was not much of an exemption at all.123 The parties involved in the dispute, including the agency and several environ-mental groups, had agreed to a settlement prior to the God Squad’s decision.124 Under a federal court agreement, the Administration could complete the dam “if its builders guaranteed that enough water would be released from the dam to maintain adequate stream levels on the Platte River where it passed the Nebraska feeding grounds.”125 The God Squad granted the exemption, but required the implementation of the preexisting settlement as mitigation.126 Because the settlement would have already preserved the feeding grounds to the extent that the habitat would not be in jeopardy, the exemption was never really

117 See supra note 90, and accompanying text; Press Release, Dep’t of the Interior, En-

dangered Species Committee Completes Report on Grayrocks and Tellico (Feb. 8, 1979), available at http://www.fws.gov/news/historic/1979/19790208.pdf.

118 See Shannon Petersen, Acting for Endangered Species: The Statutory Ark 65 (2002); Press Release, Dep’t of Interior, supra note 117.

119 See Petersen, supra note 118 at 64–65; Corn et al., supra note 27, at 107. 120 See Scott et al., supra note 112, at 5–6. 121 See Michael J. Bean, Historical Background of the Endangered Species Act, in Endan-

gered Species Act: Law, Policy and Perspectives 8, 11 (Donald C. Baur & Wm. Robert Irvin eds., 2d ed. 2010) (twenty-one surviving whooping cranes in 1941); id. at 6 (fewer than twenty surviving whooping cranes in 1938).

122 See Corn et al., supra note 27, at 107. 123 Petersen, supra note 118, at 65. 124 Id. 125 Id. 126 Id. at 65–66; see 16 U.S.C. § 1536(h)(1)(B) (2006).


required in the first place.127 Even so, by granting the exemption, the God Squad signaled that the completion of the Grayrocks dam met the ESA standard for exemptions.128

C. The Spotted Owl

In 1990, FWS listed the northern spotted owl as threatened, bring-ing conservationists into conflict with the logging industry.129 FWS found that, in order to survive, the spotted owl required old-growth for-est with a high canopy to nest in, and room under the branches to fly and hunt.130 Furthermore, the practice of clearing and selling discrete plots of land fragmented patches of owl habitat, reducing the chances that mating pairs would find each other and reproduce.131 Thus, the logging practices of the Federal Bureau of Land Management (BLM) had adverse effects on the owl’s critical habitat, and violated section 7.132 Industry representatives expressed concern that the entire lumber industry in the Pacific Northwest would be affected, with some predict-ing the loss of more than 25,000 jobs.133 Tensions increased after FWS approved only one-third of the BLM’s proposed timber sales, rejecting sales on fifty-two plots of forest land because those sales would jeopard-ize the survival of the spotted owl.134 The BLM petitioned George H.W. Bush’s Secretary of the Interior for a God Squad exemption on forty-four of the plots.135 After hearings, during which timber industry pro-ponents challenged the validity of FWS’s scientific conclusions, the God Squad voted five to two in favor of exempting thirteen of the forty-four timber sales, believing that the reduced number of sales would leave enough contiguous forest to avoid harming the spotted owl popula-

127 Petersen, supra note 118, at 65–66. 128 See 16 U.S.C. § 1536(h). 129 See 55 Fed. Reg. 26,114, 26,114, 26,121, 26,125 ( June 26, 1990) (codified at 50

C.F.R. pt. 17); Bruce G. Marcot & Jack Ward Thomas, U.S. Dep’t of Agric., PNW-GTR-408, Of Spotted Owls, Old Growth, and New Policies: A History Since the Inter-agency Scientific Committee Report 5–6 (1997).

130 See 73 Fed. Reg. 47,345, 47,345–46 (Aug. 13, 2008) (codified at 50 C.F.R. pt. 17). 131 See id. at 47,347. “Timber harvest has contributed significantly to habitat loss, deg-

radation, and fragmentation for the northern spotted owl, and was the basis for the origi-nal listing of the species.” Id. at 47,349.

132 See 16 U.S.C. §§ 1532(5), 1536. 133 See Steven Lewis Yaffee, The Wisdom of the Spotted Owl: Policy Lessons for a

New Century 134 (1994); Tom Kenworthy, ‘God Squad’ to Ponder Spotted Owl, Wash. Post, Oct. 21, 1991, at A17.

134 See Yaffee, supra note 133, at 138. 135 See Marcot & Thomas, supra note 129, at 6; Yaffee, supra note 133, at 138.


tion.136 In addition, it ordered the implementation of FWS’s owl recov-ery plan.137 Although environmental groups initially contested the exemption as the result of improper political influence by President Bush,138 by the time President Clinton had taken office, the end result was similar to the result in the whooping crane case—the exemption was granted as long as no real jeopardy would come to the threatened species.139

III. The Delta Smelt and the California Water Crisis

A. The Delta Smelt’s Lifecycle and Habitat

The delta smelt is native to a limited range in the San Francisco Bay and Sacramento-San Joaquin Delta Estuary of California (Bay-Delta region).140 The small fish does not have any significant economic use for farmers, local industry, or state water officials.141 The delta smelt’s greatest value may be as an “indicator” species.142 That is, by observing the health of the delta smelt population in California’s waterways, ob-servers may draw conclusions about the health of the ecosystem in gen-eral, and its potential effects on humans who rely on the Delta estuary for drinking water.143 Information on the lifecycle of the delta smelt is limited, but the species resides in the partially saline, brackish waters of the Bay-Delta region where the San Joaquin and Sacramento rivers empty into the Pacific Ocean.144 During the winter months, adult fish migrate from

136 See Portland Audubon Soc’y v. Endangered Species Comm., 984 F.2d 1534, 1537

(9th Cir. 1993); Yaffee, supra note 133, at 139; see also Marcot & Thomas, supra note 129, at 6–7 (noting that proponents of timber sales “put the science [used by FWS] on trial”).

137 Marcot & Thomas, supra note 129, at 7. 138 See id.; Yaffee, supra note 133, at 139, 246. See generally Portland Audubon Soc’y, 984

F.2d at 1534. 139 See Petersen, supra note 118, at 65–66. 140 Biological Opinion, supra note 51, at 140. 141 See FWS, 5-Year Review for Hypomesus Transpacificus (Delta Smelt) 5 (2010)

[hereinafter 5-Year Review]; Peter B. Moyle, Restoring Aquatic Ecosystems Is a Matter of Val-ues, 54 Cal. Agric. 16, 24–25 (2000) (suggesting that steps to protect the delta smelt should be taken for moral reasons, and “must be taken without the immediate expectation of economic gain”); Farmers Fight Against Delta Smelt Protection, ABC Local News, Jan. 25, 2010, http://abclocal.go.com/kgo/story?section=news/state&id=7238845.

142 See Zygmunt J.B. Plater, The Embattled Social Utilities of the Endangered Species Act—A Noah Presumption and Caution Against Putting Gasmasks on the Canaries in the Coalmine, 27 Envtl. L. 845, 853 n.33 (1997).

143 See id.; see also Lund et al., supra note 24, at 4. 144 Biological Opinion, supra note 51, at 140, 145–46; 5-Year Review, supra note

141, at 5.


the salty waters of the Bay to the shores of the freshwater rivers to spawn.145 While scientists have not yet observed the rare fish mating in the wild, scientific evidence indicates that the adult delta smelt lay their eggs in fresh water near the river banks.146

Due to its sharply declining population, the delta smelt has been listed as threatened under the ESA since 1993.147 The reasons for the decline are varied, but one threat to the species is the water-pumping mechanisms of California’s irrigation system.148

B. California’s Water Diversion System: A Threat to the Delta Smelt

The Central Valley Project (CVP), a large-scale federal water man-agement project, and the corresponding State Water Project (SWP), divert fresh water from the Sacramento and San Joaquin rivers to more arid regions of central and southern California.149 The water diversion system uses the Delta, where the rivers empty into San Francisco Bay, as a conduit for water destined for more arid parts of the state.150 Most of California’s farmland relies on water that flows into the Delta and is diverted for irrigation.151 As the state’s population and agricultural sec-tor have continued to grow, the demands on the fresh water supply have increased.152 In order to move the large volume of water necessary to meet demand, the intake pumps must draw water from the rivers at impressive rates.153 Unfortunately, the intake pipes are located near the delta smelt’s critical spawning grounds.154 During spawning, the small fish are drawn into the pumping mechanisms where they are killed.155 Even where the fish manage to lay eggs, the young larval smelt are often drawn into the

145 See Biological Opinion, supra note 51, at 146. 146 See id. at 145–47. 147 58 Fed. Reg. 12,854, 12,854 (March 5, 1993) (codified at 50 C.F.R. pt. 17). 148 See 5-Year Review, supra note 141, at 4. 149 See Lund et al., supra note 24, at 31–33. 150 See id. at 31. See generally Nat’l Research Council, Comm. on Sustainable Water

and Envtl. Mgmt. in the Cal. Bay-Delta, A Scientific Assessment of Alternatives for Reducing Water Management Effects on Threatened and Endangered Fishes in California’s Bay Delta (2010) [hereinafter Bay Delta Report].

151 See Lund et al., supra note 24, at 4, 33. 152 See supra note 19 and accompanying text. 153 See 5-Year Review, supra note 141, at 4. The stronger of the two major pumps has

exported water at a rate of more than 6,000 cubic feet per second, and may be capable of volumes exceeding 10,000 cubic feet per second. Id.

154 See id.; Biological Opinion, supra note 51, at 159–61. 155 See 5-Year Review, supra note 141, at 4; Biological Opinion, supra note 51, at

159–61.


pumps and killed as they migrate toward their adult habitat in the Bay.156 Furthermore, because young delta smelt use the river’s flow to navigate to the brackish waters of the Bay, they become disoriented during times when the pumps are operating at a level that reverses the river’s flow.157 This leads them away from their natural habitat and back toward the pumps, where they are entrained or eaten by striped bass in the river.158 FWS found that “[a]ll size classes of delta smelt suffer near total loss when they are entrained by the pumping plants and diver-sions in the south Delta.”159 Additionally, high-volume diversions for irrigation reduce the amount of fresh water downstream and diminish the force of the out-flowing river, allowing the saline water from the Bay to push further inland.160 This reduces the amount of fresh water available as breeding space for the delta smelt, as well as the water available for other human purposes.161 Furthermore, young smelt feed on organisms that require low salinity, making the preservation of a salt-free delta even more im-portant.162 The combination of entrainment and destruction of critical habi-tat has contributed to the continuing decline in the delta smelt popula-tion.163 Ultimately, in 2007 a federal court ordered that water projects reduce the flow of the pumps to protect the species, pending FWS’s production of an updated Biological Opinion on the delta smelt.164 The revised Biological Opinion, issued in 2008, confirmed that water project diversions during spawning months would likely jeopardize the delta smelt’s critical habitat, therefore barring the pumping under the ESA’s section 7.165 The revised Biological Opinion set out an alternative to total shutdown, requiring reduced pumping and periodic release of

156 5-Year Review, supra note 141, at 4; Biological Opinion, supra note 51, at 152. 157 5-Year Review, supra note 141, at 4. 158 Id. Entrainment occurs when delta smelt are trapped in inflow pipes or other haz-

ardous areas by currents. Id. 159 Id. The study further notes that those fish that survive the entrainment in the

pumps to reach “water project reservoirs or canals fail to reproduce.” Id. 160 See id. at 4–5. 161 5-Year Review, supra note 141, at 4–5; Biological Opinion, supra note 51, at 146,

148; Lund et al., supra note 24, at 4 (noting that “most Californians drink water that passes through the Delta”).

162 Biological Opinion, supra note 51, at 149. 163 See Matt Weiser, Delta Smelt in Peril, Fish and Wildlife Says, Sacramento Bee, Apr. 3,

2010, at 2B. 164 See Natural Res. Def. Council v. Kempthorne, No. 1:05-cv-1207, at *3, 5–6 (E.D. Cal.

Dec. 14, 2007) (order issuing preliminary injunction). 165 See 16 U.S.C. § 1536(a)(2) (2006); Biological Opinion, supra note 51, at 278.


upstream reservoir water to replenish the smelt’s freshwater breeding habitat.166 Another alternative is building a canal to bypass the delta smelt habitat entirely.167

C. Opponents of Reduced Pumping Call for the God Squad

California’s drought, which began in 2007, has put pressure on an agricultural industry reliant on irrigation.168 The court ordered reduc-tion in pumping served to agitate the brewing conflict between agricul-tural interests in need of water, and the need to protect the delta smelt and its habitat.169 As the drought years continued, agricultural interests argued that the reduced pumping was causing an undue strain on the farm econ-omy, threatening jobs at a time when the nation as a whole—and Cali-fornia in particular—was suffering high unemployment.170 Opponents of water diversion restrictions continue to characterize the conflict as a battle between people and fish, with some going so far as to question whether a shortage would exist at all, even under prolonged drought conditions, absent the mandates of the ESA.171 Some have suggested that an exemption by the God Squad to allow high-speed pumping would be the appropriate answer to the California water crisis.172

166 Biological Opinion, supra note 51, at 279–85. 167 See Lund et al., supra note 24, at 138–54 (outlining nine potential alternatives). One

of the alternatives, the peripheral canal proposal, had been discussed for decades, and is not without its detractors. See, e.g., Lodi City Council, City Council Resolution 2009–127, A Resolution of the Lodi City Council Opposing Development of a Peripheral Canal and Expansion of State Authority Over Local Land-Use Decisions (2009), available at http://publicdocs.lodi.gov/Docs/RESOLUTIONS/2009/res2009–127.pdf.

168 See Dianne Feinstein, Sen. Feinstein Responds, Cal. Provocateur, Feb. 2010, at 10, available at http://magissues.farmprogress.com/CLF/CF02Feb10/clf010.pdf. (“This is the third year of severe drought in California, and farmers in the San Joaquin Valley are suffer-ing real economic hardships due to water shortages.”).

169 See id.; see also Cody et al., supra note 10, at 11. 170 See Cal. Labor & Workforce Dev. Dep’t, California Labor Market Review 14

(2010) (unemployment in California rose from 4.9% in 2006 to 12.5% in early 2010); Valerie Richardson, It’s Farmers vs. Fish for California Water, Wash. Times, Aug. 20, 2009, at A01, avail-able at http://m.washingtontimes.com/news/2009/aug/20/its-farmers-vs-fish-for-california- water.

171 See Richardson, supra note 170; California’s Man-Made Drought, supra note 25. 172 See Letter from Dennis Hollingsworth, California State Senator, to Arnold Schwar-

zenegger, Governor of California (February 5, 2009), available at http://cssrc.us/web/36/ news.aspx?id=5422 (urging Governor Schwarzenegger to ask to convene the God Squad).


IV. Would a God Squad Exemption Solve the Crisis?

Obtaining an exemption from the God Squad is most likely a chal-lenging prospect. Although two of the three God Squad decisions ever issued were in favor of exempting an agency action from section 7,173 in reality, the God Squad granted the whooping crane and spotted owl exemptions under conditions that would not actually put the animals in jeopardy.174 The God Squad, even when its members have been sympa-thetic to industry interests, has never allowed an agency action to pro-ceed in a manner that would clearly threaten the survival of a spe-cies.175 Future Committee members would likely have similar qualms about being responsible for the extinction of a species.

The infrequency of God Squad decisions, coupled with the fact that no decision has been reviewed on its merits, provides limited guidance for determining how the Committee might rule on the case in Califor-nia.176 Nonetheless, it is possible to draw some inferences from past ex-emption applications, and recent scientific evidence helps to suggest a likely outcome, should California’s governor request an exemption.177 The proposal to exempt California’s water diversions from section 7 would probably not meet the requirements for an exemption, and re-sources may be better spent pursuing a reasonable and prudent alterna-tive to high-volume pumping from the Sacramento and San Joaquin Rivers.178 The individual elements of the exemption are analyzed below.

A. The Regional or National Significance Requirement and the Prohibition on Investment of Irretrievable Resources

Two of the four requirements for a God Squad exemption—that the proposed agency action be of regional or national significance, and that the agency refrain from investing any irreversible or irretrievable resources in furtherance of the action prohibited by the ESA—should

173 See supra notes 97–99 and accompanying text. 174 See discussion supra Part II.B–.C. 175 See id. 176 See Corn et al., supra note 27, at 107–08 (summary of exemption requests); Ryan &

Malmen, supra note 62, at 118. 177 See generally Bay Delta Report, supra note 150 (discussing scientific support for

delta smelt protections); Post Buckley Shuh & Jernigan (PBS&J), Independent Expert Panel Review of the Family Farm Alliance’s Information Quality Act Correction Requests (2009) [hereinafter Independent Expert Panel Review] (discussing scientific support for smelt protections).

178 See 16 U.S.C. § 1536(h) (2006).


easily be satisfied by the circumstances at the diversion pumps.179 The proposed action for purposes of an exemption would be the restoration of high-flow pumping that could threaten the continued existence of the delta smelt.180 First, the water pumps are part of a large-scale regional water di-version system that supplies water to much of California’s farmland.181 California farms, in turn, supply a significant percent of the nation’s produce, making the maintenance of a sufficient irrigation water sup-ply of at least regional, and probably national, significance.182 It is sen-sible to assume that the God Squad would come to this conclusion, given that past iterations of the God Squad have found that a modest hydroelectric dam like the Grayrocks Dam, and thirteen lumber sales in the Pacific Northwest, warranted an exemption.183 Second, the pumping stations could already move water at a rate capable of killing the smelt and destroying critical habitat prior to the imposition of FWS’s regulations.184 Therefore, in the time since the court ordered reduced pumping, the water projects have not invested any irretrievable or irreversible resources that would prohibit an ex-emption.185 The other two requirements for an exemption, however, may pose greater challenges for proponents of resuming high-speed pumping.186

B. Fish & Wildlife’s Reasonable and Prudent Alternative

One major hurdle that the CVP and SWP would have to surmount when seeking a God Squad exemption is the requirement that there be “no reasonable or prudent alternatives to the agency action.”187 FWS identified a multi-step reasonable and prudent alternative (RPA) in its 2008 revised Biological Opinion regarding the delta smelt.188 The Bio-logical Opinion calls for the water projects to reduce pumping to pro-

179 See id. § 1536(h)(1)(A)(iii)–(iv); discussion supra Part III.B. 180 See 16 U.S.C. § 1536(h). 181 See Lloyd G. Carter, Reaping Riches in a Wretched Region: Subsidized Industrial Farming

and Its Link to Perpetual Poverty, 3 Golden Gate U. Envtl. L.J. 5, 6 (2009). 182 See Cal. Dep’t of Food & Agric., supra note 18, at 5 (noting that California sup-

plies fifty percent of the United States’ fresh market produce). 183 See discussion supra Part II.B–.C. 184 See 16 U.S.C. § 1536(h)(1)(A)(iv); Natural Res. Def. Council v. Kempthorne, No.

1:05-cv-1207, *3 (E.D. Cal. Dec. 14, 2007) (order requiring status report). 185 See 16 U.S.C. § 1536(h)(1)(A)(iv); Kempthorne, No. 1:05-cv-1207 at *3. 186 See 16 U.S.C. § 1536(h)(1)(A)(i)–(ii). 187 See id. § 1536(h)(1)(A)(i). 188 See Biological Opinion, supra note 51, at 279–85.


tect the fish and to release fresh water reserves to replenish the breed-ing habitat.189 This proposal meets Interior’s definition of an RPA; the water projects have the legal authority to control the flow of their own stations, doing so does not require adding any expensive or technologi-cally unfeasible equipment, and the multi-step RPA would result in the conservation of the delta smelt.190 The God Squad, if convened, could still find that the RPA identi-fied in the Biological Opinion was not, in fact, reasonable and prudent based on the record developed at the hearing.191 However, because no additional technology is required to reduce pumping, opponents of the RPA would likely have to challenge the validity of the jeopardy finding itself.192 Advocates for the timber sales in the spotted owl case, for ex-ample, questioned the scientific basis for FWS’s determination that clearing the land would harm the owl.193 In a hearing on high-volume pumping in the Bay-Delta region, advocates for increased water diversions would be likely to challenge the science supporting the jeopardy finding, given that no observer has ever witnessed delta smelt spawning in the area around the pumps.194 CVP and SWP can argue that so little is known about the delta smelt’s lifecycle that FWS can not reasonably locate the critical spawning grounds of the delta smelt near the pumping stations, and determine that cutting the force of the outgoing water flow during the winter would conserve the species.195 Perhaps proponents of pumping could argue that a large number of fish killed in the pumping machinery re-flect a growing population of smelt, in that larger numbers would logi-cally result in the entrainment of more fish.196 If the smelt population is declining, could the true cause be predation by non-native species, and competition over resources, rather than the pumps?197 While much of the delta smelt’s lifecycle is still a mystery, a recent report by the National Research Council (NRC) supports the science

189 Id. 190 See 16 U.S.C. § 1536(h); 50 C.F.R. § 402.02 (2011) (definitions); Biological Opin-

ion, supra note 51, at 279–85. 191 See Biological Opinion, supra note 51, at 279–85. 192 See supra note 140 and accompanying text. 193 See Marcot & Thomas, supra note 129, at 6–7. 194 See Biological Opinion, supra note 51, at 145, 147. 195 See id. at 145–51, 161 (finding that spawning likely occurs near pumping sites). 196 See Bay Delta Report, supra note 150, at 38 (discussing notion that increase in

smelt salvaged after entrainment may reflect recovery of population). 197 See Independent Expert Panel Review, supra note 177, at 5–6.


underpinning the Biological Opinion.198 The NRC’s findings make it less likely that the God Squad would find that FWS’s RPA is unreason-able.199 The NRC’s report, commissioned by Congress, concluded:

[U]ntil better monitoring data and comprehensive life-cycle models [for the delta smelt] are available, it is scientifically reasonable to conclude that high [flows towards the pump] in winter probably adversely affect smelt populations. Thus, the concept of reducing [those] flows to reduce mortality of smelt at the SWP and CVP facilities is scientifically justified.200

The NRC report supports similar conclusions reached in an October 2009 study by a panel of independent experts addressing the effects of CVP and SWP pumping on the delta smelt.201 With at least two studies concluding that the Biological Opinion’s suggested RPA is scientifically sound, the God Squad would have a more difficult time justifying the exemption for the water projects.202

C. Weighing the Benefits

Even if a possible alternative to full-speed water pumping would otherwise be reasonable and prudent, it still may be too burdensome from an economic standpoint, and therefore deserve an exemption.203 But in order to grant an exemption, the God Squad must find that do-ing so is “in the public interest,” and that the benefits of the action “clearly outweigh the benefits of alternative courses of action” that would better conserve the threatened species.204 While a “reasonable and prudent alternative” is suggested by FWS, “alternative courses of action” could include almost anything, and a party requesting an ex-emption must consider a variety of potential alternatives before receiv-ing an exemption.205 The God Squad could reasonably conclude that resuming high-speed pumping would be in the public interest if it found that restoring water deliveries would have a positive impact on the agricultural econ-

198 See Bay Delta Report, supra note 150, at 3. 199 See id. 200 Id. 201 See Independent Expert Panel Review, supra note 177, at 5–9. 202 See Bay Delta Report, supra note 150, at 3; Independent Expert Panel Review,

supra note 177, at 5–9. 203 See 16 U.S.C. § 1536(h)(1)(A)(ii) (2006); discussion supra Introduction. 204 See 16 U.S.C. § 1536(h)(1)(A)(ii). 205 See id. §§ 1536(h)(1)(A)(ii), 1536(g)(3)(A).


omy.206 The God Squad could fairly determine that increasing the pro-duction of the agricultural sector, suffering under prolonged drought conditions in a state experiencing high unemployment, was in the pub-lic interest.207 This is not unlike the spotted owl case, where much dis-cussion focused on the impact that preventing timber sales would have on the forest economy and the jobs it provided.208 By granting a partial exemption, the God Squad suggested that allowing at least some timber sales was in the public interest.209 Even though high-speed pumping in the Bay-Delta region may be characterized as being in the public interest, the result might be the ex-tinction of the delta smelt, and such a serious possibility requires a care-ful consideration of alternatives.210 Only if the benefits of increased pumping significantly outweigh the benefits of the alternatives should the God Squad grant an exemption.211 It is here that proponents of in-creased pumping may meet their biggest challenge. A key question in the delta smelt case is whether the economic benefits of increased water pumping clearly outweigh the benefits of other choices.212 While the number of possible alternatives endless, two are worth consideration.213

1. Following the Biological Opinion to Reduce Pumping

With respect to water pumping in the Bay-Delta region, it is worth-while to ask whether simply following the FWS’s direction to reduce pumping in winter would really cause much economic hardship, and also weigh the benefits of the reduced pumping.214 First, the drought conditions may be temporary, and waiting may see the return of high water years, buying time to improve the water delivery system in a way that would conserve the delta smelt before the

206 See id. § 1536(h); discussion supra Introduction. 207 See id. § 1536(h); Cal. Labor & Workforce Dev. Dep’t, supra note 170, at 14;

Feinstein, supra note 168. 208 See 16 U.S.C. § 1536(h); discussion supra Part II.C. 209 See 16 U.S.C. § 1536(h); discussion supra Part II.C. 210 See 16 U.S.C. § 1536(h); supra text accompanying note 166. 211 See 16 U.S.C. § 1536(h). 212 See id. 213 See, e.g., Plater et al., supra note 71, at 800 (“[I]t is clear that one of the alterna-

tives that must be considered is ‘no action.’”); Pub. Policy Inst. of Cal., Research Brief, Dealing with the Delta: Envisioning Futures, Finding Solutions 3–4 (2007), avail-able at http://www.ppic.org/content/pubs/rb/RB_207JLRB.pdf (identifying alternatives to the current water delivery system in the Bay-Delta region, including a peripheral canal proposal).

214 See Biological Opinion, supra note 51, at 279–85 (the RPA); supra text accompa-nying note 172.


next drought.215 Second, while the delta smelt has little direct commer-cial value, the ecosystem of the rivers, which supply much of Southern California’s drinking water, must be preserved.216 The excessive water diversions from high-speed pumping cause the salinity line between fresh and salt water to move inland, reducing the amount of fresh water available for all purposes, not just delta-smelt spawning.217 Additionally, a restored delta smelt population could help feed other fish in the riv-ers, like bass, used for sport fishing.218 Overall, maintaining reduced pumping speed could better maintain other economically beneficial uses of the river.219 This is similar to the snail darter case, where the God Squad refused an exemption in light of the other beneficial uses of a free-flowing Little Tennessee River.220 Third, even if the drought persists, it is possible that a reduction in available water may encourage Californians to conserve more water and improve irrigation techniques.221 A long term reduction in irriga-tion water may encourage farmers to shift to less water-intensive crops than are currently in vogue—a shift that farmers may currently resist because water-intensive crops tend to be more profitable.222 The end result would be a Californian agricultural economy utilizing climate-appropriate crops and less water. This would have positive implications for long-term sustainability of both the agriculture industry, and the river ecology—preserving jobs that rely on both.223 Finally, the NRC suggests that careful scientific monitoring of the delta smelt and its habitat may provide better information that would allow for better timed increases in pumping speed.224 This could avoid

215 See Jim Carlton, U.S. Opens Spigot for California Farmers, Wall St. J., March 17, 2010,

at A6 (noting that heavy rain in March, 2010, allowed the release of more water for use by the CVP, alleviating some of the pressures on farmers); supra text accompanying note 15.

216 See Lund et al., supra note 24, at 4. 217 See supra text accompanying notes 160–161. 218 See 5-Year Review, supra note 141, at 4; see Lund et al., supra note 24, at 5. 219 See Lund et al., supra note 24, at 4–5 (discussing beneficial uses of the river). 220 See supra Part II.A. 221 See Cooley, supra note 16, at 7–8 (explaining that reduced water may lead to im-

proved irrigation techniques); Ellen Hanak et al., Myths of California Water—Implications and Reality, 16 W. Nw. 3, 32–33 (2010).

222 See Cooley, supra note 16, at 7–8; Hanak et al., supra note 221, at 32. There is addi-tional evidence that some fields currently receiving irrigation water from the Bay-Delta system are becoming contaminated with salt water, and may soon be unusable, reducing agricultural demand for water and offsetting some of the net increase in demand due to population growth. See Lund et al., supra note 24, at 101.

223 See Cody et al., supra note 10, at 11 (noting that Californians rely on a healthy Delta ecosystem for agriculture, salmon fishing and recreation).

224 See Bay Delta Report, supra note 150, at 49.


harming the fish, yet allow for irrigation at a higher volume than the current Biological Opinion allows.225 While a lack of information may cause greater restrictions on pumping than is necessary to protect the smelt, better science may help achieve a more efficient solution.226 Given this, the quick-fix of increased pumping now, at the expense of the survival of the delta smelt, does not clearly outweigh the benefits of developing a long-term, sustainable economy that also conserves wild-life. At the very least, such a decision would be premature.227

2. Building a Peripheral Canal

Another possible alternative to pumping water directly from the river is the construction of an alternative canal that would circumvent the Delta, and deliver water to the pumps without using the delta smelt habitat as a through-point.228 While the peripheral canal proposal was rejected in the past, markedly increased water demands and the need to protect vulnerable species requires re-examining the canal proposal.229 A canal used as part of the California water delivery system is tech-nologically and economically feasible—the current state-wide system already includes a network of canals and aqueducts, and adding another would not be unreasonable.230 Construction of the peripheral canal may meet resistance from affected communities, but the need to preserve the Bay-Delta ecosystem makes the canal alternative well worth explor-ing.231 The Public Policy Institute of California estimates that a periph-eral canal would cost between two and three billion dollars—expensive, but worth the cost for a sustainable water delivery system.232 Proper

225 See id. The NRC report concludes, “[a]t this time, the best that can be done is to

design a strategy of pumping limitations that uses the best available monitoring data and the best methods of statistical analysis . . . to manage the pumping limitations adaptively while minimizing impacts on water users.” Id.

226 See id. 227 See 16 U.S.C. § 1536(h) (2006). 228 See Lund et al., supra note 24, at 123–24. After approval in the 1930s, CVP engi-

neers considered using a peripheral canal around the Delta as the primary means of water transport, but decided to route the water through the Delta instead. Id. at 32.

229 See id. at 123–24. 230 See Nikko Ambroselli, California’s Water: California Water Systems, Ass’n Cal. Water

Agencies ( Jan. 10, 2011, 9:57 AM), http://www.acwa.com/content/california-water-series/californias-water-california-water-systems (noting that California’s water delivery system is a series of aqueducts, canals, and pipelines).

231 See Lodi City Council, supra note 167. 232 See Pub. Policy Inst. of Cal., Issue No. 144, Research Brief: Dealing with the

Delta: Envisioning Futures, Finding Solutions 5 (2007), available at http://www.ppic. org/content/pubs/rb/RB_207JLRB.pdf.


monitoring of the canal would ensure that overuse and pollution from the canal’s construction do not occur, thereby protecting the ecology of the Bay.233 The God Squad would have a difficult time finding that an increase of water pumping speed in the winter months justified the ex-tinction of the delta smelt, and perhaps other species threatened by the ecological changes in the Bay.234 Reasonable alternatives, like the pe-ripheral canal, have been available for decades, and failure to invest in a smart solution earlier should not be justification for granting an exemp-tion now.235

D. Other Considerations

1. The Mitigation Factor

Proponents of a God Squad exemption must also consider the fact that the process would require the Committee to establish mitigation techniques designed to protect the delta smelt, even if it allowed for increased pumping.236 By comparison, the two previous God Squad decisions that granted exemptions did so only where the mitigation requirements resulted in no real harm to the threatened animals.237 The mitigation efforts chosen by the Committee to try and protect the delta smelt may be significant, and could involve expensive transplant efforts, habitat preservation and restoration, or other techniques that would make an exemption less appealing.238

2. The Political Hurdle

The God Squad is an inherently political device, even if it serves a quasi-judicial function.239 Citizens typically frown on politicians who allow the extinction of a species, and the God Squad members have significant national political exposure.240 Further, an industry impor-

233 See Lund et al., supra note 24, at 144. Researchers at the Public Policy Institute of

California call the canal and monitoring alternative the “canal plus” alternative. Id. at 4. 234 See supra text accompanying note 175. 235 See Lund et al., supra note 24, at 32–34. Before water project construction began,

authorities were concerned about water quality issues associated with drawing water from the Delta, which possibly could have been avoided by using a freshwater canal at the pro-ject’s inception. See id.

236 See Endangered Species Act, 16 U.S.C. § 1536(h)(1)(B) (2006). 237 See supra Part II.B–.C. 238 See supra note 97 and accompanying text. 239 See Portland Audubon Soc’y v. Endangered Species Comm. 984 F.2d 1534, 1540

(9th Cir. 1993); Plater et al., supra note 71, at 800. 240 See Plater, supra note 62, at 307.


tant to one region may not have as much support nationally.241 The timber industry in the spotted owl case may have supplied many jobs in the Pacific Northwest, but the disgust of those far removed from the forest economy over killing the photogenic bird created a political minefield.242 Likewise, the nation may be reluctant to sanction the ex-tinction of the delta smelt so that a pair of water pumping stations can increase production during a few months.243 However, if the economic situation becomes acute enough, or if food prices rise as a result of wa-ter shortages, the political pressure may grow enough for an admini-stration to consider asking for the God Squad.244 Of course, the Secretary of the Interior must first agree to convene the God Squad.245 Currently, Interior has signaled that it would be re-luctant to do so.246 The agency released a communication directly ad-dressing the delta smelt situation and rejected the notion that ESA pro-tections were responsible for the water shortages.247 Addressing the idea of convening the God Squad, Interior outlined its position, stating:

The creation of a “God Squad” would override protections on California’s watersheds—on which 25 million people depend for clean drinking water—and turn the state’s water crisis over to the courts. Moreover, a “God Squad” would undermine the ability of local communities, local water districts, and federal and state water experts to find collaborative, constructive solu-tions to deliver water where it is needed most in current drought conditions. Trying to force more water out of a dying system will only cause more human tragedy and environmental collapse, while diverting attention from the real need to fix the broken water system in California after decades of neglect.248

It seems unlikely that proponents of a God Squad solution to the Cali-fornia water crisis will find much support from the current administra-tion.249

241 See Yaffee, supra note 133, at 245–46; discussion supra Part II.C. 242 See Yaffee, supra note 133, at 245–46; discussion supra Part II.C. 243 See supra note 94 and accompanying text. 244 Governor Schwarzenegger cited a potential rise in food prices as one factor in his

declaration of a statewide emergency due to the water crisis. See Cal. Dep’t of Water Res., supra note 11, at 70.

245 See 16 U.S.C. § 1536(g) (2006). 246 See U.S. Dep’t Interior, supra note 25, at 1–2. 247 See id. 248 See id. 249 See id.


Conclusion

A combination of factors makes the God Squad exemption a poor mechanism for solving the California water crisis. As past applications of the God Squad have shown, even when exemptions are granted, the results are usually not the unbridled discretion that the agency seeks. Water interests seeking to eliminate the ESA’s protection of the delta smelt would have a difficult time convincing the Committee that there was no reasonable or prudent alternative to high-speed water pumping from the Delta-Bay region consistent with conserving the species. There is growing consensus that alternatives exist, and studies are underway to further explore them. Interior, already skeptical of the God Squad solu-tion, would need much convincing before convening the Committee, and even if the God Squad did grant an exemption, the required miti-gation provision ensures that it would not come without cost. The Cali-fornia water crisis would be better addressed directly, by pursuing an alternative that would conserve the delta smelt and its habitat.