Thursday, June 25, 2009

New Arrival!

You may have noticed I haven't posted anything in a while. I assure you it is not out of a lack of interest, but rather because my wife and I just welcomed our first child into the world. Because of this I have been taking a short vacation from blogging which will probably continue for another week or so. I look forward to returning to the discussion of water issues and thank you for your patience in the interim.

Thursday, June 4, 2009

Clean Water Restoration Act Unconstitutional?

The Pacific Legal Foundation recently issued a press release putting forth the argument by attorney Reed Hopper that the Clean Water Restoration Act (CWRA) is unconstitutional. (Thanks to Aquafornia for picking this up) Mr. Hopper is the Principle Attorney for the Pacific Legal Foundation, and represented the petitioner (the winning side) in the Rapanos case.

Is Mr. Hopper correct? Pacific Legal’s press release doesn’t contain much specific information on the reasons for his position – so I asked him. In response to an e-mail inquiring into the basis for his position, Mr. Hopper kindly provided me with a copy of his July 17, 2007 testimony before the Subcommittee of Water Resources and Environment. In that testimony he addresses a previous (though substantively identical) version of the CWRA, and discusses the constitutional problems he sees with it.

Mr. Hopper raises two compelling questions in his testimony: 1) whether the inclusion of non-navigable waters within the CWRA exceeds Congress’ authority under the Commerce Clause; and 2) whether the definition of ‘waters of the United States” which extends “to the fullest extent that these waters…are subject to the legislative power of Congress under the Constitution.” is an effective abdication by Congress of its legislative responsibilities. (S. 787, §4(3)).

As Mr. Hopper points out, the Supreme Court has held,

[W]e have identified three broad categories of activity that Congress may regulate under its commerce power. First, Congress may regulate the use of the channels of interstate commerce. Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities. Finally, Congress' commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, i.e., those activities that substantially affect interstate commerce.

U.S. v. Lopez, 514 U.S. 549, 558-559 (1995)(citations omitted). Under which of these three categories, if any, do non-navigable intrastate waters (and activities that effect them) fit? Mr. Hopper contends that they do not fall within either of the first two categories and thus must fall within the third – that they “substantially affect” interstate commerce – for the CWRA to be constitutional. Mr. Hopper makes a compelling case that they do not, as they facially have nothing to do with interstate economic activities.

As to the argument that Congress is essentially abdicating its legislative responsibilities to the courts, I am not sure that I agree. I do however agree that the language is an explicit invitation for litigation over the “fullest extent” of Congress’ legislative power. But, given the inevitability that the constitutionality of the CWRA will be litigated whether or not the language is there, this is probably an argument of little moment.

If the CWRA is passed into law by Congress I do not doubt that Mr. Hopper, or some other attorney, will have an opportunity to argue these questions before the Supreme Court. But, Mr. Hopper’s position, and the Supreme Court’s decision in Rapanos, leaves me with a question. Is the analysis factually out of date?

The discussion over the constitutionality of the CWRA focuses on water as a means of conveyance, like a road or rail line. This is understandable in the context of the Clean Water Act’s reference to “navigable” waters. But ever increasingly water is considered – first and foremost – a resource. Further, it is a resource that is regularly shipped across state lines by a multi-billion dollar bottled water industry. It is also a resource that the States themselves are fighting over, sometimes to the point of litigation. Water has become a commodity. And it is a commodity that is critical to innumerable industries (see this article for examples).

It is not hard for me to imagine that activities that affect apparently “intrastate” bodies of water or wetlands would have a deleterious effect on the availability of water within a State, and thus affect the pattern of commerce relating to – or dependant on – water. Any individual instance may have a negligible impact overall, but that is irrelevant. In Maryland v. Wirtz, 392 U.S. 183 (1968) the Supreme Court noted, “[t]he Court has said only that where a general regulatory statute bears a substantial relation to commerce, the de minimis character of individual instances arising under that statute is of no consequence." Id. at 197, n. 27. If water is viewed as a pervasive commodity, then an argument can be made that a regulatory statute governing its treatment bears a “substantial relation” to commerce.

Tuesday, June 2, 2009

Clean Water Closer To Restoration

As readers will be aware from my prior posts (both of which can be found here), a bill entitled the "Clean Water Restoration Act" is wending its way through Congress. Well, as discussed in this New York Times editorial, the bill may start wending a little faster. The Obama administration has written to the House and Senate committees considering the bill urging that they approve the legislation. Some of the urgency may derive from efforts to polish the United States' environmental credentials in advance of the December climate change talks in Copenhagen.

Water and Risk

There is an interesting article just published by Risk Management Magazine entitled “Water, Water Everywhere … But Not Enough for Business.” Much of the information in the article is familiar to those who follow water issues, though increased public awareness is always a good thing. But, the article does address an interesting issue I have not seen discussed elsewhere – namely the impact water scarcity has on the insurance industry.

Many people reading this may think “so what?” Most people don’t think about insurance issues in their day to day lives. Yet insurance coverage, or lack thereof, can have a major impact on both individuals and businesses. Its availability can ameliorate catastrophe, and its unavailability can make a business venture impossible.

Insurance companies are experts at evaluating risk – or at least they need to be if they want to stay in business. As is made clear by the examples in the article, water scarcity is a risk that insurance companies need to start evaluating. All is not gloom and doom however. With every crisis comes opportunity, and water scarcity is no different. The article quotes Roman Hohl, an insurance director at Swiss Re who suggested that tradable water rights, “could be an opportunity for the insurance sector-insuring companies that have water rights but can't exercise them, for example.” I found this interesting given that a number of States in the American Southwest are already in the position have having more “paper rights” than available water.

Other than the insurance questions, the article discusses particular industry segments that make intensive use of water as well as some of the initiatives those in those industries have taken to reduce their water usage. Ms. Holdbrook leaves us with a question however, “All these efforts represent positive steps in overcoming the risks related to water scarcity. But are they enough?”

What do you think?