Contributor, The Volokh Conspiracy

On Tuesday, a federal district court in Wyoming invalidated Interior Department regulations limiting hydraulic fracturing (a.k.a. “fracking” or “fracing”) on federal lands. The opinion, by Judge Scott Skavdahl, begins:

This matter comes before the Court on the Petitions for Review of Final Agency Action filed separately in each of these consolidated actions, challenging the Bureau of Land Management’s issuance of regulations applying to hydraulic fracturing on federal and Indian lands. The Court, having considered the briefs and materials submitted in support of the petitions and the oppositions thereto, including the Administrative Record, and being otherwise fully advised, FINDS that the Bureau of Land Management lacked Congressional authority to promulgate the regulations.

Our Constitutional form of government is built upon three separate but equal branches of government: the legislative branch (Congress) which makes the laws; the executive branch (President) which enforces the laws; and the judicial branch (Courts) which interpret the laws. In this case, the threshold issue before this Court is a Constitutional one—^has Congress (the legislative branch) delegated its legal authority to the Department of Interior to regulate hydraulic fracturing. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). The issue before this Court is not whether hydraulic fracturing is good or bad for the environment or the citizens of the United States. “Regardless of how serious the problem an administrative agency seeks to address; … it may not exercise its authority ‘in a manner that is inconsistent with administrative structure that Congress enacted into law.'” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 125 (2000) (quoting ETSI Pipeline Project v. Missouri, 484 U.S. 495, 517 (1988)). The Constitutional role of this Court is to interpret the applicable statutory enactments and determine whether Congress has delegated to the Department of Interior legal authority to regulate hydraulic fracturing. It has not.

In rejecting the Obama administration’s arguments that the court should defer to the agency’s construction of the relevant statutory provisions, Skavdahl wrote:

In recent years, as does the BLM here, federal agencies have increasingly relied on Chevron deference to stretch the outer limits of its “delegated” statutory authority by revising and reshaping legislation. See Caring Hearts Personal Home Servs., Inc. v. Burwell, —F.3d —, No. 14-3243, 2016 WL 3064870, at *1 (10th Cir. May 31, 2016). However, Chevron involved a challenge to an agency construction of a specific statutory provision where the agency had clearly been granted regulatory authority over the activity in question. Chevron, 467 U.S. at 839-40, 866. This case stands in contrast — Congress has not directed the BLM to enact regulations governing hydraulic fracturing. Indeed, Congress has expressly removed federal agency authority to regulate the activity, making its intent clear. If this Court were to accept Respondents’ and Intervenor Respondents’ argument, there would be no limit to the scope or extent of Congressionally delegated authority BLM has, regardless of topic or subject matter.

“[N]o matter how important, conspicuous, and controversial the issue, … an administrative agency’s power to regulate in the public interest must always be grounded in a valid grant of authority from Congress.” Brown & Williamson, 529 U.S. at 161. Having explicitly removed the only source of specific federal agency authority over fracking, it defies common sense for the BLM to argue that Congress intended to allow it to regulate the same activity under a general statute that says nothing about hydraulic fracturing. Despite the lack of authority, the BLM persisted in its rulemaking efforts. Comments made by the EPA itself suggest that the Fracking Rule is an attempt to resurrect EPA’s pre-2005 EP Act authority (see DOI AR 0103278_002-3); that is, the BLM is attempting to regulate hydraulic fracturing as underground injection wells in a manner that the EPA would have done under the SDWA absent the 2005 EP Act. The BLM has attempted an end-run around the 2005 EP Act; however, regulation of an activity must be by Congressional authority, not administrative fiat. The Court finds the intent of Congress is clear, so that is the end of the matter; “for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Chevron, 467 U.S. at 842-43.

The opinion concludes:

As this Court has previously noted, our system of government operates based upon the principle of limited and enumerated powers assigned to the three branches of government. In its simplest form, the legislative branch enacts laws, the executive branch enforces those laws, and the judicial branch ensures that the laws passed and enforced are Constitutional. See Marbury v. Madison, 5 U.S. 137, 176 (1803). A federal agency is a creature of statute and derives its existence, authority and powers from Congress alone. It has no constitutional or common law existence or authority outside that expressly conveyed to it by Congress. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988); see also Michigan v. EPA, 268 F.3d 1075, 1081-82 (D.C. Cir. 2001). In the absence of a statute conferring authority, then, an administrative agency has none. See American Petroleum Inst. v. EPA, 52 F.3d 1113, 1119-20 (D.C. Cir. 1995). This Court “must be guided to a degree by common sense as to the manner in which Congress would likely delegate a policy decision of such economic and political magnitude to an administrative agency.” Brown & Williamson, 529 U.S. at 133. Given Congress’ enactment of the EP Act of 2005, to nonetheless conclude that Congress implicitly delegated BLM authority to regulate hydraulic fracturing lacks common sense. Congress’ inability or unwillingness to pass a law desired by the executive branch does not default authority to the executive branch to act independently, regardless of whether hydraulic fracturing is good or bad for the environment or the Citizens of the United States. “[The Supreme] Court consistently has given voice to, and has reaffirmed, the central judgment of the Framers of the Constitution that, within our political scheme, the separation of governmental powers into three coordinate Branches is essential to the preservation of liberty.” Mistretta v. United States, 488 U.S. 361, 380 (1989). Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing. The BLM’s effort to do so through the Tracking Rule is in excess of its statutory authority and contrary to law. As this finding is dispositive as to each of the Petitions for Review, the Court need not address the other points raised in support of setting aside the Fracking Rule. THEREFORE, the Court holds the Fracking Rule is unlawful, and it is

ORDERED that the BLM’s final rule related to hydraulic fracturing on federal and Indian lands, 80 Fed. Reg. 16,128 (Mar. 26, 2015), is hereby SET ASIDE.

I expect the Obama administration will appeal.