On March 24, 1989, the Exxon Valdez oil tanker struck a reef west of Alaska, spilling millions of gallons of oil and wreaking catastrophic environmental damage.1 In response,2 Congress amended the Clean Water Act3 (CWA) with the Oil Pollution Act of 1990.4 Among other mandates, the 1990 amendments require oil pipeline operators to submit oil spill response plans to certain administrative agencies.5 Recently, in National Wildlife Federation v. Secretary of the U.S. Department of Transportation,6 the Sixth Circuit held that agencies are not bound by either the Endangered Species Act7 (ESA) or the National Environmental Policy Act8 (NEPA) when evaluating and approving these response plans.9 To arrive at this conclusion, the court agreed with the relevant agency’s determination that it lacked discretion to reject response plans based on the ESA or NEPA.10 This case exemplifies and exacerbates concerns about agency discretion aversion, a phenomenon in which agencies deliberately eschew discretion in order to avoid certain statutory obligations.11 In addition to enabling agencies to game regulatory requirements, muddle judicial oversight, and subvert the purposes of the ESA and NEPA, the Sixth Circuit’s decision is likely to undermine the Oil Pollution Act itself.
For over sixty years, Enbridge Energy, an energy transportation company, has operated a major pipeline called Line 5, which carries oil across the Great Lakes region.12 Pursuant to the CWA, Enbridge submitted two oil spill response plans for Line 5 in the past five years.13 The Pipeline and Hazardous Materials Safety Administration (PHMSA) approved the response plans in 2015 and 2017, respectively.14 PHMSA did not, however, perform two other actions arguably required by environmental statutes: first, it did not consult with other environmental agencies, per section 7 of the ESA, on the potential dangers posed by its approval to endangered species or their habitats; and second, it did not prepare an environmental impact statement, per NEPA, to evaluate its approval’s environmental impact and any less damaging alternatives.15
The National Wildlife Federation (NWF) sued PHMSA,16 claiming, among other things,17 that because the agency failed to meet its obligations under the ESA and NEPA, its approval of the response plans was unlawful.18 The parties agreed that whether PHMSA was required to conform with the ESA and NEPA turned on whether the CWA affords PHMSA “discretion” to influence response plans based on environmental concerns.19 The parties’ emphasis on agency discretion stemmed in particular from two Supreme Court cases — National Ass’n of Home Builders v. Defenders of Wildlife20 and Department of Transportation v. Public Citizen21 — that establish that an agency need not comply with ESA and NEPA requirements if such compliance could have no impact on the agency’s action.22 PHMSA argued that approvals of response plans are nondiscretionary due to the CWA’s instruction that the agency “shall” approve any response plan that meets six enumerated criteria.23 NWF disagreed, contending that approvals are discretionary because the criteria require the agency to make various environmental judgments, such as deciding whether the response plans contain adequate information on oil spill removal resources.24
The U.S. District Court for the Eastern District of Michigan found in favor of NWF, writing that the CWA “unambiguously affords PHMSA the discretion necessary to require compliance with NEPA and the ESA.”25 While conceding that PHMSA cannot reject a response plan that meets the six criteria, the court emphasized that the agency retains discretion in evaluating whether the criteria are “met in the first place.”26 And, the court continued, this evaluation requires the agency to exercise “considerable environmental judgment”;27 in particular, the CWA requires PHMSA to determine whether response plans outline adequate mechanisms to remove worst-case discharges “to the maximum extent practicable.”28 The court concluded that because the CWA’s text unambiguously gives PHMSA discretion to take into account environmental concerns before approving response plans,29 the agency’s assertion to the contrary was unreasonable and entitled to no deference under the Chevron30 doctrine.31 The government appealed.32
The Sixth Circuit reversed.33 Writing for the panel, Judge Thapar34 first held that PHMSA was not bound by the ESA’s consultation requirement because its approval of the response plans was nondiscretionary.35 The Supreme Court’s decision in Home Builders, according to the panel, demonstrates that an agency lacks discretion when faced with a statute providing that the agency “shall” take a specified action if enumerated criteria are met.36 Thus, the court concluded, PHMSA was required to approve the response plans once the “triggering event[]” — that is, the satisfaction of the CWA’s six criteria — occurred.37 The panel rejected NWF’s argument that the necessity of PHMSA’s exercising environmental judgment conferred discretion on the agency, writing that “[d]iscretion and judgment are not the same thing.”38
Next, the panel held that the nondiscretionary nature of PHMSA’s approvals meant that the agency also was not obligated to prepare an environmental impact statement under NEPA.39 Relying on the Supreme Court’s decision in Public Citizen, the panel noted that it would be pointless to require an agency to prepare an environmental impact statement for an action that it “lacks discretion to prevent.”40 In sum, because the “statutory text [was] clear” that PHMSA had no discretion, the court deemed Chevron inapplicable and held that PHMSA had no obligations under either the ESA or NEPA as a matter of law.41
Judge Merritt dissented.42 Like the district court, he determined that PHMSA had “significant discretion or latitude in considering and applying the criteria” set forth by the CWA.43 In finding PHMSA to be bound by the ESA’s consultation requirement, Judge Merritt emphasized the CWA’s broad mandate that a response plan include sufficient removal strategies to “prevent, minimize, or mitigate damage to the public health or welfare, including . . . fish, shellfish, [and] wildlife.”44 Furthermore, the substantial discretion enjoyed by PHMSA, according to Judge Merritt, rendered inapposite the majority’s comparison to the simple “triggering event” described in Home Builders.45 Similarly, PHMSA’s discretion meant that the agency was required to conform with NEPA’s requirements.46 Unlike the agency in Public Citizen, PHMSA here would benefit from preparing an environmental impact statement, because doing so would help it discern whether Enbridge had the “necessary means to prevent, minimize, or mitigate environmental damage.”47
The Sixth Circuit’s decision both reflects and compounds the consequences of “agency discretion aversion,” a phenomenon in which an agency purposely disavows that it has discretion in conducting particular actions.48 It demonstrates that even when judges review agency discretion de novo, agency discretion aversion can lead to agency gaming behavior; judicial inconsistency; and the undercutting of the purposes motivating statutes, including not only the ESA and NEPA, but also the primary statute governing the agency action — here, the CWA. The Sixth Circuit has condoned and potentially calcified PHMSA’s evasion of discretion and, in doing so, has threatened the interlocking structure of American environmental laws.
In their article Agencies Running from Agency Discretion, Professor J.B. Ruhl and attorney Kyle Robisch note that the approach of agency discretion aversion has increasingly been used by agencies that, like PHMSA, wish to “wiggle out of ESA and NEPA assessment requirements by claiming nondiscretion.”49 Ruhl and Robisch discuss three damaging consequences of agency discretion aversion in the context of the ESA and NEPA: first, agencies “game” their nondiscretion positions to have discretion only when they want it;50 second, courts struggle to uniformly evaluate whether agencies’ discretion aversion positions are justified;51 and third, discretion aversion undermines the purposes of the ESA and NEPA.52
The Sixth Circuit, though, did not defer to PHMSA’s interpretation that it lacked discretion. Instead, it performed an analysis of PHMSA’s discretion from scratch, looking only to the statutory text — not to the agency’s interpretation.53 In theory, by not granting Chevron deference to an agency’s eschewal of environmental discretion, this approach might ameliorate the downsides of agency discretion aversion. But in practice, this case demonstrates that de novo review of a nondiscretion claim may in fact exacerbate the consequences described by Ruhl and Robisch.
First, the Sixth Circuit’s approach still allows the agency to “game” the system by claiming discretion only when desirable. The CWA’s provisions governing oil spill response plan approvals are what Ruhl and Robisch call “if find/then shall” provisions: if an agency finds that certain requirements (here, the six enumerated criteria) are met, then it shall take a certain action (here, approval of the response plans).54 This structure, as interpreted by Home Builders, allows the agency to use the “shall” command as a “firewall behind which it can . . . use the ‘if find’ process to exercise all or most of the discretion it cares to exert.”55 The Sixth Circuit’s approach has seemingly aggravated this problem. By holding that the CWA’s text unambiguously removes discretion from the agency reviewing response plans, the court treats the CWA’s “if find/then shall” provision as an absolute barrier to ESA and NEPA applicability. This approach allowed PHMSA to exercise significant discretion in the “if find” stage while still avoiding ESA and NEPA obligations; for example, PHMSA necessarily leveraged its environmental expertise to determine whether the response plans contained adequate mechanisms to remove oil pollution to the “maximum extent practicable,”56 taking into account “the public health or welfare, including . . . fish, shellfish, wildlife, and public and private property.”57
Second, the court’s method creates no reason for optimism as to the consistency of future judicial decisions about agency discretion. As Ruhl and Robisch note, because courts have difficulty “evaluating agency nondiscretion claims,”58 the outcomes in agency discretion aversion cases “defy any coherent synthesis.”59 Here, the fact that both the majority and the dissent reasoned solely based on the CWA’s text, and did not discuss whether to defer to PHMSA’s interpretation, could in theory simplify the process: after all, this approach confines the judicial role to statutory analysis, rather than requiring judges to gauge the reasonableness of the agency’s stance.60 And if the panel is correct, the text itself is clear and the agency has no choice but to disavow discretion.61 But the panel’s interpretation of the CWA was the exact opposite of that of the dissent and the district court,62 demonstrating that even when judges analyze agency discretion de novo, outcomes will still be unpredictable.63
Finally, the Sixth Circuit’s decision enables agencies to “chip away at the underlying purposes” of the ESA and NEPA through discretion aversion.64 One of the primary goals of both NEPA and the ESA is to inform the public and other government agencies of impending environmental impacts,65 and as Ruhl and Robisch point out, successful agency discretion aversion “completely cut[s] off that flow of information.”66 The Sixth Circuit’s decision here, by categorically denying that agencies need to comply with the ESA and NEPA when scrutinizing response plans, further restricts the influence of those landmark statutes. Indeed, by enshrining its interpretation as the unambiguous textual result of the CWA, the court forecloses opportunities for future administrations to take the contrary position and claim discretion.67 This result seems like an odd one considering the sweeping language of the ESA and NEPA68 and extensive precedent confirming their breadth.69
Furthermore, this case demonstrates a consequence unexplored by Ruhl and Robisch. It shows that agency discretion aversion can also undermine the fundamental purposes of the statute containing the “if find/then shall” provision — in this case, the CWA. The provisions at issue were added to the CWA by the Oil Pollution Act of 1990, which was passed in direct response to the 1989 Exxon Valdez oil spill.70 Congress’s clear purpose in passing the Oil Pollution Act was to protect wildlife and natural habitats from future oil spills,71 and the Act’s legislative history reflects this intent,72 as well as the intent to give environmental agencies substantial discretion.73 Removing ESA and NEPA protections from the response plan approval process thus appears antithetical to the Act’s purpose, particularly in this case, given Enbridge’s own history of oil spills.74 The Sixth Circuit deliberately did not consider this information,75 even though Public Citizen — the very case the court relied upon to hold NEPA inapplicable76 — specifically instructs courts to consider congressional intent when determining whether an agency must conduct an environmental impact statement.77
Under the Sixth Circuit’s approach, no agency has the discretion to consider information from ESA consultation, or from an environmental impact statement under NEPA, when deciding whether to approve oil spill response plans. Without these environmental safeguards, agencies like PHMSA may in some respects be “captured by the oil pipeline business,”78 which was “not . . . envisioned by Congress when it passed the 1990 CWA amendments.”79 If courts are unable to ameliorate the detriments of agency discretion aversion, agencies themselves must recognize the significant discretion they often wield, thereby allowing environmental statutes to exist in harmony with one another, rather than in conflict.