In late March 2016, North Carolina took front stage in national political news. The legislature convened  for a one-day special session to pass a bill preventing local governments from enacting anti-discrimination ordinances. Some of the news coverage, national and state, addressed the general issue of the legislature’s stripping power away from local governments in other areas, notably local government structure, taxing authority and infrastructure ownership.

Over the past five years, the North Carolina legislature has also stripped the state’s local governments of many of their powers to regulate environmental threats. This trend has not been widely reported. In this entry I will catalog some of the recent changes in local government’s environmental regulatory powers–all of them reductions in such powers.

These changes also should be viewed in a longer historical context, however. There has been dynamic ebb and flow between local governments, the State, and the federal government in power to regulate the environment ever since the passage in the 1970s and 1980s of the nation’s major federal environmental statutes. This entry will also go back to the start of the State of North Carolina and describe what I see as five major periods with different arrangements of local versus State environmental regulatory power:

1. A Preindustrial era of purely local control (1700s to 1900)
2. Early industrial era of State floors with local flexibility (1900 to 1970)
3. Late industrial era of federal mandates with potential State flexibility, limited in NC by the legislature (1970 to 1990)
4. Postindustrial era of federal and State “devolution” of power, yielding many localized or “place-based regulations” (1990s to 2010)
5. Great Recession and post-recession era clampdown on agency and local environmental discretion (2011 to present)

An important feature of all this ebb and flow is that new eras never completely wiped out the programs and laws created in early eras. The power swished around like water beneath coastal piers, but the old programs often remained, like barnacles, some alive and others just crusty hulks of their former living selves.  I will start with the recent era and work backwards in time. Some of the most interesting legal problems are presented by the persistence of those earliest barnacles.

Read More →

In earlier posts, I have discussed two canards about rulemaking in North Carolina

• Authority for rulemaking is rarely in question and easily found; more critical is whether there are “adequate guiding standards”
• Rules have the same legal power as statutes, among other things binding the agency as well as persons outside the agency

I will finish this series on some core beliefs about rulemaking with an environmentally-centered, critical look at this final canard:

• Rulemaking processes should be consistent from authorization to judicial review

Frankly, no one who practices or follows environmental law in this State could take seriously the claim that the legislature cares much about consistency in administrative law processes, such as rulemaking. What do they care about, and how should judges review their grants of authority, if not by seeking consistency, a long and hallowed hallmark of legal fairness?

Read More →

What is the power of an agency rule? The longstanding canard is that a rule has the force of law, just like a statute. So, for example, rules can alter the common law:

Where an agency has the authority to act, its rules and regulations have the binding effect of statutes and may accordingly alter the common law. Taylor v. Superior Motor Co., 227 N.C. 365, 367, 42 S.E.2d 460, 461 (1947) (noting that “proper regulations authorized under the Act have the binding effect of law,” because such regulations “are the tools used to effectuate the policy and purposes of the Act.”)

In re Declaratory Ruling by NC Comm’r of Insurance Regarding 11 N.C.A.C. 12.0319, 134 N.C. App. 22, 30 (1999).

Similarly, the view has long and generally been that agencies are bound by their own rules, since the rules are, essentially, just like statutes. See, e.g., Snow v. Board of Architecture, 273 N.C. 559 (1968); 2 Am. Jur.2d Administrative Law § 350 (1962) (“Procedural rules are binding upon the agency which enacts them as well as upon the public of the agency, and the agency does not, as a general rule, have the discretion to waive, suspend, or disregard in a particular case a validly adopted rule so long as such rule remains in force.”).

But here’s another conundrum about rules: they don’t always get treated with the same legal respect as statutes, despite what some court opinions say, and what the Administrative Procedures Act seems to imply about them.

Read More →

It’s impossible to grasp modern American environmental law without some understanding of administrative law–the law that limits and empowers governmental agencies (like U.S. EPA and N.C.’s Department of Environmental Quality). One of the primary ways that executive branch agencies carry out their work is through “rulemaking.” Rulemaking is the process for establishing rules (“regulations”) that have the force of law. Rules and regulations are at the center of many, if not most, of the current controversies over environmental law. So it’s important to understand how and why rules get made–what the “rules for rulemaking” are. The practicing environmental lawyer needs this understanding to advise clients every day, and the person interested in reform of environmental law and policy needs at least a general understanding of the rulemaking process in order to be effective.

So in this and a few followup posts, I will discuss some problems in the way that rules are authorized in North Carolina (and elsewhere, but my focus is on the Tarheel state).  I have structured this discussion as “canards, conundrums and conclusions” and I will present three canards, more than three conundrums and a few conclusions.

Canard: 1. a groundless rumor or belief. 2. (French) ‘duck,’ from Old French caner ‘to quack

My three canards–things that are widely believed to be true about the legislative authority for and power of rules–are these:

• Authority for rulemaking is rarely in question and easily found; more critical is whether there are “adequate guiding standards” for the particular rule that’s created
• Rules have the same legal power as statutes; for example, they bind the agency as well as persons outside the agency; they can change the common law; and they can’t be waived or disregarded by the agency that made them
• Rulemaking processes should be consistent from authorization to judicial review

These three propositions are not actually “groundless,” as the definition above implies, but they are taken almost as gospel by most administrative lawyers. In fact, when you scratch their surface just a little, the conundrums pop right up.

Read More →

2015 was another big year in changes, almost entirely deregulatory changes, in North Carolina’s environmental laws. The General Assembly’s first ratified bill of the session, S.L. 2015-1 (“Amend Environmental Laws”), was an assortment of changes to such diverse programs as coal ash cleanup, solid waste generally, and air toxics. Among the General Assembly’s last ratified bills was S.L. 2015-264 (misleadingly entitled a “technical corrections bill as recommended by the General Statutes Commission”) with a section appearing after midnight in the waning hours of the session, for the first time, with no prior committee review or public debate, that attempts to prohibit any local government regulation of oil and gas exploration, development and production. Between these two bookends, against the backdrop of Volkswagen’s admission that it faked its emission results on millions of supposedly “Clean Diesel” cars worldwide, were dozens of provisions affecting nearly all facets of N.C. environmental law. I have summarized these provisions in this framework:

1. Changes that reduce public environmental information
2. Changes that allow more pollution, or more development in environmentally sensitive areas.
   • Air
   • Water
   • Land
3. Environmentally protective changes
4. Environmental finance
5. Matters in limbo and miscellany

If Volkswagen, listed as recently as 2013 as “best in class” on Dow Jones’ Sustainability Index, was actually willing to blatantly defraud consumers and federal regulators, what are the odds that smaller, less well capitalized companies will self-regulate properly when it comes to environmental externalities?

Read More →

In 2011, a story appeared that seemed to capture the essence of the N.C. legislative leadership’s feelings about DENR, the State environmental and natural resource regulatory agency. The story, first attributed to Speaker of the House Tom Tillis, said that an Appropriations Commitee co-chair, Rep. Mitch Gillespie, had drawn a bullseye on his legislative office window so that it lined up with his view of the Archdale Building, long time DENR headquarters. The story’s intrigue deepened when Rep. Gillespie left the legislature in 2012 to join Gov. Pat McCrory’s administration as an Assistant Secretary …. of DENR. By most accounts, Rep. Gillespie did a fine job while at DENR, as one might expect after his years of paying close attention to environmental issues and asking good questions on the legislative Environmental Review Commission.

But with Gov. McCrory’s signature on the 2015 Budget Bill, S.L. 2015-241, on September 18, DENR went away. It became the “Department of Environmental Quality.” Several of its formerly important functions were transferred to other departments. Over the last twenty-five years, the erosion in size and power of North Carolina’s main environmental agency has been so striking as to count as “defenestration,” with Rep. Gillespie’s office window bullseye adding a new layer of meaning to that term. But the erosion really began in the late 1990s, during the administration of Gov. Jim Hunt.

Read More →

What kinds of laws can a unit of local government in North Carolina–a city, a county, or a special purpose unit such as a soil and water conservation district–pass to adjust the balance between environmental protection and economic production? The answer to this general question starts with a search for authority given to the unit of government by the state legislature. There is also the open question of whether the N.C. Constitution itself grants some such authority.

Assuming there is a source of local power to act, the next question is whether State or federal government has already acted in a way that prevents the local unit from changing the law. This is the question of preemption, in legalese. My colleagues who focus on general local government law have ably discussed the way preemption questions are analyzed legally.  But environmental problems have contributed more than their share of major cases on preemption. And environmental problems seem destined to continue raising hard questions about the relative power of local versus state and federal governments, as political power ebbs and flows in Raleigh.

Read More →

Many people in the United States today like to speak of a thing called “free enterprise,” which in their minds is closely linked to “property rights,” with both of these things being represented by a time in American history before the rise of “big government“–back in colonial days, and for a period after Independence up to the industrial revolution.  It would surprise and perhaps disturb these people to find that the earliest North Carolina legislatures, filled with “founding fathers,” were quite willing to take away an individual’s property rights in the interest of environmental improvement.  As long as environmental protection was perceived to advance economic development, early American leaders readily restricted individual freedom by imposing state-sanctioned changes on property.  But before the rise of the state administrative agencies that now form much of the executive branch of government, the legislature turned to local government and the courts to impose these requirements on property owners.

Read More →

North Carolina passed a series of laws in the 1970s that prevented its agencies and local governments from creating environmental regulations that were more stringent than federal regulations. These laws were called “Hardison amendments” in reference to then-Senator Harold Hardison, D-Lenoir, who chaired several important legislative committees, notably the Appropriations Committee. Environmentalists lobbied long and hard and finally succeeded in removing the Hardison amendments in the mid-1980s. For the next thirty years, North Carolina was often a national leader among states in innovative environmental regulatory approaches. But in 2011, with the return of a Republican majority to both legislative chambers for the first time since 1870, the legislature reinstated the Hardison amendments, in slightly altered form (originally the new language was added as GS § 143B-279.16; it was later re-codified into the Administrative Procedures Act as GS § 150B-19.3). Understanding the rise, fall, and restoration of North Carolina’s Hardison Amendments helps explain the political dynamics of environmental regulation at the state level in the United States.

Read More →