Jarkesy’s Potential Implications for EPA Administrative Proceedings
On June 27, 2024, the U.S. Supreme Court decided SEC v. Jarkesy,[1] holding that when the Securities and Exchange Commission (SEC) alleges a defendant has violated securities antifraud provisions and seeks civil penalties, the defendant is entitled to a jury trial in federal court under the Seventh Amendment. The ruling restricts the SEC’s use of its own in-house administrative tribunal with its own administrative law judges (ALJs), which the SEC has historically used to pursue antifraud claims. While the Court’s ruling focuses on the SEC, the principles underlying the decision may be applied more broadly to restrict the ability of other federal agencies, including the Environmental Protection Agency (EPA), to pursue civil penalties via their own administrative proceedings.
Environmental Law Implications of Loper Bright and the End of Chevron Deference
On Friday, June 28, 2024, the U.S. Supreme Court overruled Chevron v. NRDC in Loper Bright Enterprises v. Raimondo.[1] Although the Court’s decision to overturn Chevron was anticipated, Loper Bright nonetheless represents a paradigm shift because the Chevron doctrine had been a cornerstone of administrative law for 40 years.
Fifth Circuit Limits EPA’s Attempts to Regulate PFAS Under Toxic Substances Control Act in Inhance Technologies v. EPA
On March 21, 2024, the U.S. Court of Appeals for the Fifth Circuit vacated two U.S. Environmental Protection Agency (EPA) orders under Section 5 of the Toxic Substances Control Act (TSCA), holding that EPA had exceeded its statutory authority when it issued the orders in an attempt to regulate the manufacture of per- and polyfluorinated substances (PFAS) by petitioner Inhance Technologies, LLC (Inhance). The Fifth Circuit’s decision comes after EPA’s Office of Enforcement and Compliance Assurance announced its National Enforcement and Compliance Initiatives for Fiscal Years 2024 – 2027, which involve increased emphasis on addressing PFAS exposure and contamination through enforcement actions and potential additional regulations.
Federal Court Upholds U.S. Department of Labor ESG Rule
On September 21, 2023, Judge Matthew J. Kacsmaryk of the U.S. District Court of the Northern District of Texas rejected a challenge by 26 states and upheld the U.S. Department of Labor (DOL) rule that permits fiduciaries of plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) to consider environmental, social, or governance (ESG) considerations under certain circumstances when making investment decisions. By upholding the rule, the court rejected the states’ contention that by allowing ESG considerations, financial interests would be subordinate to nonpecuniary interests. Stakeholders interested in ESG should continue to track this ruling, which may be appealed.
