THE DUCKS STOP HERE? 
The Environmental Challenge to Federalism

Jonathan H. Adler

Accepted for publication in Forthcoming in 9 Supreme Court Economic Review (Univ. of Chicago Press, 2001)

Abstract

In Solid Waste Association of Northern Cook County v. U.S. Army Corps of Engineers ("SWANCC"), the Supreme Court considered whether federal regulatory authority reaches isolated wetlands and ponds due to the potential presence of migratory birds. In rejecting such an expansive view of federal authority, the Court’s majority underlined its devotion to the federalism principles enunciated in Lopez and other recent cases. The federalist majority further reiterated its support for a canon of statutory construction which holds that federal statutes will not be interpreted to intrude into state matters, such as local land-use control, absent a clear statement by Congress. The dissent argued that the majority ignored Congress’ clear intent and, in the process, exposed millions of acres of wetlands to destruction.

This paper argues that there is little reason to believe that interstate competition amongst states will produce a "race to the bottom" in environmental regulation today, if it ever did. Interstate competition is not likely to result in suboptimal environmental protection, at least when compared with the federal alternative. States will make trade-offs between environmental protection and other values that are most consistent with the values of the people in those states and because interjurisdictional competition will promote discovery of preferable environmental protection strategies. The presence of interstate externalities can, in certain circumstances, justify federal environmental regulation. However, the presence of such externalities is often overstated, and the costs of addressing such externalities through federal regulation may well be greater than maintaining state primacy. Insofar as wetlands represent public goods that are undersupplied by states, federal intervention may be justified, but this need not mean federal regulation. Fiscal policy, such as economic incentives or the direct provision of environmental goods, are sufficient. In short, there is little basis for the argument that interstate externalities justify a departure from the Lopez federalism analysis.

The SWANCC majority articulated its federalism rationale without addressing environmental concerns. The opinion rested on the broad federalism principles underlying the Court’s prior decisions. The interpretive canon that seeks to avoid facing constitutional questions – in this case whether a given statute exceeds Congress commerce clause power – serves the same purpose as the federalism doctrine itself: It preserves the preeminence of state authority in the broadest possible sphere. Where Congress has been ambiguous about the extent to which it is asserting federal authority, such a canon will be sufficient to advance the aims of federalism. This will not be true in all cases, however. There are other environmental statutes, such as the Endangered Species Act, which assert equally far-reaching federal authority with less statutory ambiguity. In such cases, the Court will need to confront the arguments against federalism head-on to preserve interjurisdictional competition amongst the states.

FULL TEXT available on SSRN