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Sen. Chuck Grassley Holds a Hearing on the Nomination of Judge Sonia Sotomayor to Be an Associate Justice of the U.S. Supreme Court

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LEAHY: Again, both Senator Session is and I have said, as all previous chairs and ranking members of this have said, this is a hearing of the United States Senate. The judge deserves respect. Senators in asking questions deserve respect.

I will order the removal of anyone who disrupts it, whether they're supportive of the nominee or opposed to the nominee, whether they're supportive of a position I take or opposed to it. We will have the respect that should be accorded to both the nominee and to the United States Senate.

SESSIONS: Thank you, Mr. Chairman. I think you've handled this well throughout, and I support you 100 percent.

LEAHY: Thank you.

Senator -- Senator Grassley, we did stop the clock, so it did not take from your time.

GRASSLEY: Thank you. People always say I have the ability to turn people on.


Maybe you could start over again with your -- with your sentence, please.

(UNKNOWN): Where were we?

SOTOMAYOR: I hope I remember where we were.


SOTOMAYOR: Senator, the right of property owners to have their day in court is a very important one, but there is a corollary to the right to have your day in court, which is that you have to bring it to court in a timely manner...


SOTOMAYOR: ... because people who are relying on your assertion of rights should know when you're going to make them. And so there's a doctrine called the statute of limitations that says if a party knows or has reason to know of their injury, then that party has to come in to court and raise their arguments within that statute that sets the limits of the action. GRASSLEY: I...

SOTOMAYOR: In the -- oh, I'm sorry.

GRASSLEY: No, no, no...

SOTOMAYOR: No, no, no.

GRASSLEY: ... you, please. I interrupted you. I should not have interrupted you.


GRASSLEY: Please, go ahead.

SOTOMAYOR: In the Didden case, the question was whether Mr. Didden knew that the state was intending to take his property and for what it, the state, claimed was a public use and that it had plans to have a private developer take his -- they take his property and the private developer develop the land.

So there was a full hearing by the village on this question of whether there was a public use of the land. Mr. Didden didn't claim in the action before the courts that he didn't have notice of that hearing. He did not raise a challenge in that hearing to the public taking. And he didn't raise a challenge to the state's intent to have a private developer develop the land.

Now, in that case, the developer was developing not just Mr. Didden's property. It was one piece of property in a larger development project. And that larger development project had been based on the village's conclusions from its very lengthy hearings in accordance with New York law that the area was blighted and that the area needed economic development.

SOTOMAYOR: So to that issue became the issue before the court in the sense of, had Mr. Didden, knowing that he could be injured by the state's finding of public use and the state's decision to let a private developer develop this land -- did he bring his lawsuit in a timely manner. And the court below and our court ruled on that basis that he hadn't because he had reason to know about the injury that could -- that could come to him.

GRASSLEY: Well, since Mr. Didden's claim was based on conduct of the developer, how could he ever have filed a successful claim under the standard that you just mentioned?

SOTOMAYOR: Mr. Didden alleged in his complaint that the private developer had extorted him. Extortion, under the law, is defined as an unlawful demand for money. On this one piece of property, within a larger development that the private developer was actively engaged in doing what he had contracted with the state to do, to revive the economic base by making investments in it, the private developer knew that Mr. Didden had his claims. The private developer had his agreement with state.

And so he was doing -- at least this was the private developer's argument -- what he was entitled to do which is to say we disagree. I'm claiming that I have a right under contract. You're claiming that you have a right under the takings clause. Let's settle this.

I'm going to lose X amount of money. So you pay me back for me not to do what I'm entitled to do under the law.

That's, however, was -- those were the claims of the parties in the action. In the end, the decision of the court was if you believe that the takings of your property were not proper under the public use -- under the takings clause, and you knew that the state had entered a contract with this private developer, then you had knowledge that you could be injured and you should have come to court earlier.

GRASSLEY: Why was the situation in Didden not the kind of prohibited pretextual (ph) taking articulated in Kelo? How was this not some sort of form of extortion? And if there wasn't a pretext in the Didden case where the developer says give me the money personally or we'll take your land, then what is the pretext?

SOTOMAYOR: Well, as I -- as I have described the case...

GRASSLEY: Yes, I understand. SOTOMAYOR: ... the question comes up in the context of what did Mr. Didden know, did he have enough to know he could be injured, was there no public use to the -- to which the property would apply, and what rights did the private developer have with the state.

And so the extortion question came up in a legal context surrounding the relative rights of the parties. And so as I said, extortion is a term -- a legal term which is someone demanding money with no lawful claim to it. I'm simplifying this. There's different definitions of extortion that apply to different situations.

But in the context of this case, that's the simplest description of the case, I believe.

GRASSLEY: The Second Circuit panel in Didden took over a year to issue its rulings, suggesting that you understood the novelty and importance of this case, yet your opinion dealt with Mr. Didden's Fifth Amendment claim in just one paragraph. Did you believe that this was an ordinary takings case?

SOTOMAYOR: Well, cases present claims by parties. And to the extent that Mr. Didden was raising claims that sounded in the issues the court was looking at in Kelo, certainly if Kelo had not come out and the court had to, for whatever reason, determine that somehow the Kelo decision affected the statute of limitations question, it may have had to reach the question.

But courts do often wait for supreme courts to act on cases that are pending in order to see if some form of its analysis changes or not or inform whether a different look should be given to the case.

But on the bottom-line issue, Kelo didn't change, in the judgment of the panel, the statute of limitations question.

GRASSLEY: OK. Regardless of the statutes of limitations, I am curious why you didn't elaborate on your Kelo analysis. And why wasn't this opinion published?

SOTOMAYOR: Well, Kelo didn't control the outcome; the statute of limitations did. So there was no basis to go into an elaborate discussion of Kelo.

The discussion of Kelo really was to say that we had understood the public taking issue that Mr. Didden had spent a lot of time in his argument about, but the ruling was based on the narrow statute of limitations ground. So the Kelo discussion didn't need to be longer because it wasn't the holding of the case. The holding of the case was the statute of limitations.

GRASSLEY: OK. This -- on another case, the Supreme Court reversed you 6-3 just three months ago in Entergy Corporation v. Riverkeeper. You had held that the Environmental Protection Agency, which is the agency with expertise, could not use a cost-benefit analysis in adopting regulations from the construction of water structures that had an impact on fish.

Rather, you interpreted the Clean Water Act to hold that EPA had to require upgrades to technology that achieved the greatest reduction in adverse environmental impact, even when the costs of those upgrades were disproportionate to benefit. Following long-established precedent, the Supreme Court held that the EPA was reasonable in providing a cost-benefit analysis when adopting regulations under the Clean Water Act. In reversing, the Supreme Court questioned your proper applications of settled law that agency regulations should be upheld, so long as they're reasonable.

Under Chevron, agency interpretation of statutes are entitled to deference so long as they are reasonable, in other words, if they aren't capricious and arbitrary. Do you find it unreasonable that the EPA was willing to allow money to be spent in a cost-effective manner by not requiring billions of additional dollars to be spent to save a minimal number of additional fish?

SOTOMAYOR: To be able to answer your question, I would need to explain a little bit more about the background. The Supreme Court has now ruled in that case that the conclusion of the Second Circuit would not be upheld on this narrow question. But the question the 2nd Circuit was looking at is what did Congress intend or mean when in the statute at issue it said that the agency had to use the best technology available to minimize an adverse environmental impact. Those were the statute's words.

In looking at that, the circuit applied general statutory construction principles, which is, in our judgment, what was the ordinary meaning of that and...

GRASSLEY: Are you saying you're not bound by Chevron then?

SOTOMAYOR: No, absolutely not.

GRASSLEY: OK, go ahead.

SOTOMAYOR: Chevron -- Chevron speaks to agency action or interpretation. But ultimately the task of a court is to give deference to what Congress wants. That's the very purpose of Congress' legislation. And so, what the court was trying to do there was to see if the agency's interpretation in light of the words of the statute and how Congress has used cost-benefit analysis in other statutes in this area and determine what Congress intended.

And so, we looked at the language. And it said just what it said -- best technology available to minimize adverse environmental impact. We looked at how Congress used cost benefit in similar statutes and similar provisions. Or I shouldn't say similar -- in other provisions. We noted that under the statutes at issue when Congress wanted the agency to use cost-benefit analysis, it said so.

In this provision, Congress was silent. But the language, in the panel's judgment, was the language. And so, in trying to discern what Congress' intent was, we came to the conclusion, not that cost had no role in the agency's evaluation, but that Congress had specified a more limited role than cost benefit. We described it as cost effectiveness.

And, in fact, we voted to vote it past our decision, asked and sent the case back to describe to us exactly what the agency had done and why. Had it used cost benefit? Had it used cost effectiveness? The cost was always going to be a part of what the agency could consider. The issue was more in what approach did Congress' words intend.

And so, agency deference is important. But Congress is the one who writes the statutes. So you have to start as a court with what did Congress intend.

GRASSLEY: It seems to me like you're saying when going (ph) the expertise of the statute that the agency was being arbitrary and capricious in...

SOTOMAYOR: Not -- not at all, sir. We were trying to look at the statute as a whole and determine what Congress meant by words that appeared to say that best technology available had to minimize an environmental effect.


SOTOMAYOR: As I said, that does have -- and as our opinion said, considerations of cost. But given that Congress didn't use the cost benefit -- give the agency cost benefit approval in the terms of this particular provision while it had in others, we determined that the agency and precedent interpreting provisions limited the use of cost benefit analysis.

GRASSLEY: In another 2004 administrative law case dealing with environmental issues, NRDC v. Abraham, you voted to strike down a Bush administration regulation and reinstate a Clinton administration environmental rule that had never even become final. In this case, it appears you also fairly narrowly interpreted Chevron deference when striking down EPA adoptions of reasonable regulations.

If you were elevated to the Supreme Court, do you intend to replace an agency's policy decisions with your own personal policy opinions, as it appears you did in both -- in the Abraham case?

SOTOMAYOR: No, sir. In that case, we were talking about and deciding an issue of whether the agency had followed its own procedures in changing policy. We weren't substituting our judgment for that of the agency. We were looking at the agency's own regulations as to the procedure that it had to follow in order to change an approach by the agency.

So that was a completely different question. With respect to deference to administrative bodies, in case after case where Chevron deference required deference, I have voted in favor of upholding administrative -- executive and administrative decisions.

GRASSLEY: This will probably have to be my last question.

Since 2005, you have been a presiding judge on a panel of an appeal filed by eight states and environmental groups arguing that greenhouse gases are a public nuisance that warrant a court-imposed injunction to reduce emissions.

Your panel, in Connecticut v. American Electric Power, has sat on that case for 45 months or nearly three times the average of the Second Circuit. Why, after four years, have you failed to issue a decision in this case?

SOTOMAYOR: The American Bar Association rule on code of conduct does not permit me to talk about a pending case. I can talk to you about one of the delays for substantial a period of time in that decision, and it was that the Supreme Court was considering a case, a Massachusetts case, that had some relevancy or at least had relevancy to the extent that the panel asked the parties to brief further the applicability of that case to that decision.

GRASSLEY: OK. Thank you, Mr. Chairman.

LEAHY: Thank you, Senator Grassley.

Senator Feingold?

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