Evidentiary Uses for Environmental Agency Inspection Reports in Kentucky: The Dangers Posed by KRE 803(8)

Note By: Henry L. Stephens, Jr., JNREL Vol. 18, No. 2

Abstract By: Mattea Van Zee, Staff Member

The Natural Resources and Environmental Protection Cabinet (NREPC) was created by the Kentucky General Assembly with the aim to protect the natural resources of the Commonwealth. This Cabinet produces Inspection Reports (IRs) and Notices of Violations (NOVs) to communicate to those jurisdictions under its authority the statutory and regulatory provisions. These reports and notices are issued solely within the discretion of the NREPC based upon the nature of the violation. Prater v. Cabinet for Human Resources, 954 S.W.2d 954 (Ky. 1997) explains the seminal differences between KRE 803(6) and KRE 803(8). With this case as a starting ground, Kentucky courts are urged to harmonize these evidence rules to perform judicial scrutiny on the validity of opinions contained in documents such as those produced by NREPC.

The use of IRs and NOVs has the potential to be powerful and dangerous when admitted into evidence without the physical testimony of the author. This outcome is inevitable if either KRE 803(6) or KRE 803(8) is utilized in the admissibility of the documents. Prater indicated that in cases where public agency documents contain opinions and conclusions of agency inspectors, the documents would not be admitted in their entirety due to the insufficient qualifications that fail to meet the status of expert opinions. It remains unanswered as to whether IRs, NOVs, and other agency documents would be admissible via KRE 803(8) in third party litigation where the agency is not a party. Courts should take heed that this particular provision may serve as an open door to the admission of "expert" opinions conveyed by public officials who may have relied on third party hearsay statements. Instead, admissibility should be sought through FRE 803(6) to prevent this outcome.

Differences also arise in the qualification of these reports as factual findings v. factual allegations. As factual allegations, the statements would not be precluded under FRE 803(8). Additionally, with the lack of expert opinion, FRE 803(6) will not provide a route to admissibility. Those attempting to have this type of evidence excluded should not only argue that there is a lack of factual findings, but also that the statements fail to meet trustworthiness standards. For admissibility in third party actions where the agency is not a party, there still remains a viable option under FRE 803(8) for the admission of conclusions or opinions based on factual investigations if the requirement of trustworthiness requirement is met. Practitioners should assume that there will be a liberal interpretation of factual findings.

Daubert v. Merill Dow Pharmaceuticals, 113 S.Ct. 2786 (1993) provides a newer framework for courts to determine the admissibility of these so-called expert opinions. The Kentucky Supreme Court has adopted this framework in FRE 702 analysis. The trial judge is required to satisfy himself of the expertise, credentials, and rationality of the expert's conclusions. Courts should also consider the weigh of depriving the jury from weighing the credibility of the witness when the testimony comes from an agent's report.

Two Steps Forward and One Step Back: Has the Supreme Court’s Decision in Tahoe-Sierra Preservation Council Unnecessarily Muddled the Waters of Takings Law Analysis or Restored Penn Central to a Place of Prominence?

Note By: C. Phillip Wheeler, Jr.; JNREL Vol. 19 No. 1

Abstract By: Erin M. Boggs, Staff Member

Few issues rile the general public more quickly than the idea that the government can, whether through regulation or a physical taking, deprive a property owner of the ability to do what he wishes with a parcel of property. The Supreme Court has approached this problem in a variety of ways, and integrating these multiple approaches into a coherent view of regulatory takings law has proven difficult. C. Phillip Wheeler, however, closely examines the Court's decisions in this area to offer a somewhat historical perspective and a more firm grasp on the state of the law. He contends that Tahoe-Sierra Pres? Council v. Tahoe Regional Planning Agency, 535 U.S. 305 (2002), offers a firm reaffirmation of some precedent and severely limits others, hopefully clarifying the law in this area.

Tahoe-Sierra involved the interaction of property owners surrounding the highly-visited Lake Tahoe and the Tahoe Regional Planning Agency. In response to concerns about runoff into the lake, TRPA placed a moratorium on new building in the area from August 24, 1981 to August 26, 1983. Tahoe Sierra, 535 U.S. at 306. A second, more restrictive moratorium went into effect August 27, 1983 and lasted until April 25, 1984. Id. The majority of the court found that the moratorium did temporarily strip property owners of the development rights of the subject of the regulation. Id. Nevertheless, despite this finding, the Supreme Court ultimately held that the owners had not suffered a taking, relying particularly on the temporary nature of the regulation. Id. at 332.

Wheeler contends that the Court in reaching this holding clarified the test required by the law when it relied on its holdings in Penn Central and its progeny and severely limited the Lucas line of cases. Penn Central Transportation Company v. New York City, 434 U.S. 104 (1978). In order to reach this conclusion, he traces the development of the law through the modified twelve-factor test of Penn Central and the exceptions carved out in Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Wheeler's careful examination of the opinions in the regulatory takings cases, including concurring and dissenting opinions shows both the confusion of the law and the necessity of its clarification in Tahoe-Sierra. By showing the Court's historical arc and close examination of the principles that Tahoe-Sierra reaffirms, Wheeler offers a guide for understanding the narrow reach of the Lucas test and the primacy of the Penn Central test in regulatory takings law. Although Penn Central represents a flexible factor test that can have variable results, this coherent presentation of the law can assist scholars and practitioners alike in evaluating their actions by at least showing the Court's apparent choice of the Penn Central test for all regulatory takings cases.

“The Battle for the Bluegrass: An Overview of the Struggle Between Conservation and Development”

Appearing in JNREL Vol. 20, No.2 the following Note was written by former staff member Elizabeth Clevinger. Staff member J. Anthony Cash wrote the following abstract.

The Bluegrass Region of Kentucky has gained great economic benefit from its agricultural lands, particularly those utilized by the equine industry. In addition to money, these farmlands provide a cultural and aesthetic value that is unique to the region and irreplaceable. However, these farmlands can become a victim of their own success. For as with any economic boon, comes development. In the Bluegrass Region of Kentucky, such development can easily consume the farmlands that made such growth possible.

With such a clash of competing and coalescing interests, the struggle to strike a balance between development and conservation of farmland is difficult. It is made increasingly difficult because farmland is privately owned and thus protection of farmland depends upon the cooperation of landowners. However, the creation of several non-profit and governmental bodies that engage in the purchase or collection of donated easements has helped to ease this tension. The easements collected by these organizations guarantee that the land will be available for farm use in perpetuity by restricting the use of farmland upon which the easement is placed.

Even with these easements a number of factors can still affect the balance between development and conservation. First, the donation of these easements is heavily dependent on the tax deductibility of these easements. However, Congress has considered reducing the amount of the deduction granted for these types of donations. Additionally, funding for the purchase of additional easements by the local and state governments is becoming increasingly difficult because funding is drying up. Finally, the community of farmers, entrepreneurs, developers, and ordinary citizens of the Bluegrass has not decided exactly how to find the balance that is needed between development and conservation. While there is no simple answer, it is important that whatever solutions are used balance the need for conservation against the need for economic development.

“The Suitability of Government for Economic Valuation of Natural Resources and Environmental Harm”

Appearing in JNREL Vol. 20, No. 1, the following Note was written by former staff member LeeAnne Edmonds Applegate. Staff member Katie Huddleston wrote the following abstract.

Law and economics arose in the 1970's as a legal theory that promoted the application of economic principles to the law. Despite many evolutions over the past three decades, the theory has remained and has been applied to many legal fields, including environmental law. Its application in this field provides an interesting example of the theory at work and of the various criticisms made of the theory.

From the standpoint of law and economics, commercial transactions that produce environmental effects result in market failure. In such transactions, the environmental effects of consumer activities are not included in the price of such activities. Rather, these additional costs are borne by the larger society, people outside of the actual commercial transaction. In economic terms, this is a market failure. Therefore, government regulation has evolved in an effort to rectify this market failure by making the cost of such transactions to the consumer more closely approximate the larger cost of the activity to society.

The modern trend is to rectify market failure through the use of a "sin tax." A "sin tax" uses tax incentives to promote environmentally beneficial behavior, while imposing taxes for environmentally damaging behavior. The major problem with this approach is that to determine the appropriate amount for the "sin tax," the government must calculate the value of the environment and the societal cost of damage to it.

There are two main theories as to how to make these seemingly impossible valuations. Preservationists seek to set the tax according to an evaluation of the intrinsic value of the environment in its natural state. Conservationists, on the other hand, think the tax should be set according to the value of the environment as a resource. For example, when a tree is cut down, preservationists would value that tree in accordance with its function of air purification, soil retention, animal habitat, etc. Conservationists would set the value of the tree based on the value of the lumber that could be derived from it.

Aside from these two theories on valuation, there are two methods of economic valuation that can be used in setting the taxes. First is the Market Price Method. This method is useful when a market actually exists for the parts of the environment sought to be valued, such as products or resources derived there from. The current market price for the "commodity" is measured and studied for changes over time. This method is useful because it uses actual, easily identifiable and understandable data. However, it has limited applicability because of the limited markets for the environment and environmental goods. The market price may also bad indicator of the true, underlying value to society of such goods and activities, merely perpetuating the problem of market failure.

The other option is the Contingent Value Method. This method involves surveys in which people are interviewed about various hypothetical situations and asked to put a dollar value on an environmental service or commodity. This method has the benefit of being more flexible than the Mark Price Method. However, critics cite the time and effort that must be put into designing such surveys, the lack of actual observation of consumer behavior and the possibly inaccurate results that could result from it.

“The Threatened and Endangered Species Recovery Act, or ‘The Wildlife Extinction Bill?’”

Appearing in JNREL Vol. 20, No.2 the following Note was written by former staff member Jacob Eaton. Staff member Jessica Drake wrote the following abstract.

When the Endangered Species Act ("ESA"), 16 U.S.C. §§ 1531-1544 (2005), was enacted, its framers designed it to meet its goals through four specific features: 1) providing discretion to the Secretary of the Interior in listing and delisting species; 2) implementing protection of species on a nationwide level; 3) giving the Secretary the power to acquire and protect from development habitats for these endangered species (a provision in the ESA termed "Critical Habitat Protection"); and 4) creating state programs supported by federal funds and abiding by federal standards. S. Rep. No. 93-307, as reprinted in 1973 U.S.C.C.A.N. 2989, 2990-2991. In the years since its inception, the ESA, while doing tremendous good in the eyes of some, has been criticized for the discretion it provides the secretary in the first feature. Criticisms also arise through the litigation of the critical habitat provision of the ESA. With respect to this provision, courts implemented a balancing test between the interests of the endangered and those of developers – a balance that endangered species all too often lost out on. Critics argue that this further frustrates the effort of ESA in its protective goals. Furthermore, opponents contend that throughout the history of the ESA, few species have moved up or off the lists in the years of protection, and that the act, therefore, does little to protect those species on the list. This lack of movement forces fewer species to be added over time and even those that should be added are often refused because of presumably more pressing concerns.

In response to these types of criticisms, Representative Pombo introduced the Threatened and Endangered Species Recovery Act of 2005 ("TESRA"), H.R. 3824, 109^th Cong. (2005) as a remedy for the existing problems faced by the ESA. In his view, the ESA has largely failed in its attempt to conserve and provide recovery for endangered/threatened species and that this new legislation will ultimately improve the success rate in this area. The TESRA deviates from the ESA in many respects, most radically with a focus on incentives to private landowners to establish conservation plans on their own. The TESRA mechanisms such as cooperative agreements between states and Indian Tribes and improved recovery plans might provide greater protection for endangered species; however, the other deviations from the ESA, those of narrower definitions, broader exceptions, and repeal of critical protections (like habitat protection), could very much outweigh the improvements.

While the push behind the TESRA is one insisting of greater conservation and preservation of endangered species, it comes in disguise. The reality of its implementation is one that will not only frustrate three of the four objectives established by the ESA but also weaken the protections afforded to the endangered and threatened species of the United States created by the ESA. Because TESRA focuses on the private property owner, it focuses less on the species that should be paramount in conservation legislation. The kinds of incentives provided to landowners would be expensive to the budget of the Act and not dependent upon actual implementation, only a proposed plan to conserve sometime in the future. With the narrow focus of the proposed Act, the criticism and problems created by the ESA will not be solved.

“What’s Up Doc?: A Critique of Veterinarian Experts Addressing Toxic Torts in the Environment Under the Daubert Threshold Inquiry”

This note appearing in JNREL Vol. 21 No.2 was written by former staff member Michael Marsch and confronts the Daubert threshold inquiry in the context of toxic torts that affect farmers' livestock. Staff member Derek Leslie wrote the following abstract.

The Daubert threshold inquiry acts as the vehicle through which many courts address the principles behind the Federal Rule of Evidence 702, which requires that for expert testimony to be admitted, (1) the testimony must assist the trier of fact, and (2) the expert must be qualified to offer such testimony. The U.S. Supreme Court elaborated upon these principles by developing what is now known as the Daubert threshold inquiry. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The inquiry takes the shape of pre-trial motions in limine, where one party attempts to discredit and thus exclude the testimony of the other side's expert witness. The court, when considering whether scientific evidence is to be admitted, considers "(1) whether a theory or technique can be or has been tested; (2) whether it has been subjected to peer review and publication; (3) whether a technique has a high known or potential rate of error and whether there are standards controlling its operation; and (4) whether the theory or technique enjoys general acceptance within a relevant scientific community." Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001) (citing Daubert, 509 U.S. at 592-94).

Unfortunately, the Daubert threshold inquiry actually heightens the standard required by FRE 702. Where FRE 702 essentially required that the expert be qualified and that her methodology be reliable, the Daubert threshold inquiry's fourth prong, general acceptance, requires more: that the science behind the testimony has wider acceptance in the scientific community. While it may sound innocent enough, it runs contrary to the evolving nature of science, and effectively closes the door on innovative and novel scientific techniques and evidence, despite its use by a qualified expert using a reliable methodology. Moreover, the inquiry relies upon the judge, who is in no better position than the jury to weigh the merits of competing scientific assessments, to sort out these difficult scientific questions.

In the cases involving toxic torts affecting farmers' livestock, the Daubert threshold inquiry often invites the exclusion of veterinarian testimony, effectively precluding the plaintiff-farmer from making his case to the jury. In these cases, courts often apply the Daubert threshold inquiry with respect to the conclusions rather than the methodology of the expert witness. The central premise of the plaintiff-farmer's case, causation, is left unsupported without an expert witness to expound that theory.

Because the Daubert inquiry invites misapplication, and tempts judges to decide factual questions about causation, it should be abandoned. The alternative, obviously, is to rely on FRE 702 itself. If a qualified witness' testimony will assist the trier of fact in coming to a determination, the witness should be allowed to testify in front of a jury. Of course, this also permits the other party to present their own qualified expert witnesses with their own conclusions, leaving the jury to resolve the problem of which parties' expert came to the sounder scientific conclusion. Here, in the case of toxic torts affecting livestock, the plaintiff-farmer would at least be able to present his argument with respect to causation. This approach simplifies the issues surrounding expert testimony, and results, ultimately, in a fairer trial.

“2006 Eminent Domain Ballot Initiatives: Citizens’ Voice or Crying Wolf?”

Appearing in JNREL Vol. 21 No. 2 this comment was written by former staff member Ryan Daugherty. The following abstract was written by staff member Kyle Hermanson.

Citizens of the United States view the right to own and use land as a fundamental right. While strong property rights are a valued ideal, too strong a grip on this view could be injurious to society as a whole. In 2006, a handful of states passed, or nearly passed, radical reactionary ballot initiatives in response to the United States Supreme Court decision in Kelo v. New London, 545 U.S. 469 (2005). Citizens voted for these initiatives aiming to prevent their state courts from applying the broad definition "public use" used by the U.S. Supreme Court in Kelo in their states. In Kelo, the Supreme Court held that the promotion of economic development qualified as a "public use" under the Just Compensation Clause of the U.S. Constitution. However, the ballot measures passed in response to Kelo are far more potent then they appear, challenging the concept of land use planning as a whole.

Ballot initiatives can be a powerful tool for citizens. Measures authorizing direct popular participation in law-making are liberally construed, often cannot be vetoed by the governor, and allow the measure's sponsors to construct the initiative as they wish, so long as it complies with state conditions and procedures. The 2006 eminent domain ballot initiatives include either one or both of two components: a provision outlawing "Kelo- style eminent domain," and a provision that introduces a "pay-or-waive scheme." Outlawing "Kelo-style eminent domain" means banning the taking of private property or residences for use by a private or quasi-private entity and a "pay-or-waive" scheme requires the government to waive any newly enacted regulations on the use of land or pay just compensation to the land owner. These kinds of ballot initiatives were passed in Oregon and Arizona and defeated in Washington and California.

The consequences of these measures are beginning to be felt in the states that passed them. In Oregon, where the measure required that certain listed takings be construed in favor of compensation, there were over six billion dollars worth of unpaid claims against the state as of November 2006. In Arizona, the measure did not include an exception allowing takings for conservation purposes without required compensation. This forces the state government to compensate landowners for conservation-based restrictions on the use of their land. As a result, government officials will be fiscally unable to enforce new conservation regulations.

In Kentucky, state legislators have redefined eminent domain in response to Kelo as "the right of the Commonwealth to take for a public use." "Public use" in Kentucky means "ownership, possession, occupation or enjoyment of the property by a local government entity; removal of blighted properties; or for use by a public utility," and "[p]rohibits the transfer of private property to another private entity for economic development purposes." This clarification makes a ballot initiative clearly unnecessary, as state statute prevents a "Kelo-style" invasion in Kentucky. However, property protections in Kentucky could use further reform, as the definition of "blighted area" is too broad, including such subjective features as inadequate street layout or improper subdivision. Furthermore, the legislature has not clearly delineated allowable or prohibited public uses of property subject to eminent domain. Kentucky's responded with moderation to Kelo, but the people may still want stronger provisions.

“The Terminator a Trendsetter? How California’s Global Warming Solutions Act Will Impact California, the United States, and the World.”

Appearing in JNREL Vol. 21, No. 2 this Note was written by former JNREL Technical Editor Keeana Sajadi. Staff member Jessica Drake wrote the following abstract.

In September of 2006, Arnold Schwarzenegger, Governor of the state of California, signed into law the most comprehensive greenhouse emission reduction program in the United States at that time, the Global Warming Solutions Act (GWSA). The Act would require reporting of the current emissions and a detailed timeline to reduce pollution rates in California to 1990 levels by the year 2020. The state established itself as a leader who would, through their efforts and projected success in such reductions as well as increases in overall energy expenses and job creations, gain governmental following by the United States and the world.

Because California is the twelfth largest emitter in the world of this pollution, it will use GWSA to reduce the associated stigma with that status and minimize its role in the harsh effects resulting from greenhouse emissions made by the state itself, other states of America, and counties around the world. Besides GWSA's establishment of short-term goals for reductions, it also allows the California Air Resources Board, created by GWSA to implement a specific reduction plan and timeline, to provide future guidance to the Governor once the 2020 goal is attained. Further, it applies the program with an eye toward creating a workable market-based compliance mechanism, limiting emissions through automobiles, and minimizing leakage of emission to surrounding areas because of reductions in California.

The implementation of such a bold step in environmental protection incites opposition from individuals and industries that will be currently affected. Farmers, power companies, and car manufacturers argue against this drastic plan that will require major changes for their operations. However, the benefits for the state, country and world-at-large overshadow those concerns. Because the program indirectly provides lower long-term energy costs, major increases in employment opportunities, better economic spending and saving, and progression in innovative technology that should ensure a better future for our natural environment, it is well worth the short-term discomfort for such industries today. Although there are critics with legitimate concerns, the GWSA benefits will outweigh any burdens imposed.

For a more specific and thorough analysis of California's monumental effort to reduce these emissions and encourage others to follow its lead, read Keeana Sajadi's "The Terminator a Trendsetter? How California's Global Warming Solutions Act will Impact California, the United States and the World," JNREL Vol. 21, No. 2.

“Parental Control: The Impact of the Sarbanes-Oxley Act Upon Environmental Disclosure Requirements of Public Companies”

This Note was written by former staff member Dawn R. Franklin. The abstract was written by staff member Tanner James.

A law is only as good as its enforcement, and in the world of publicly-traded corporations, poor enforcement invites exploitation and noncompliance. In the context of the environment, this creates one unsuspecting loser: the shareholders. Through delayed, misleading, or simply nonexistent reports, companies dupe shareholders in to paying premium prices per share while hiding environmental violations that, once made public, will result in plummeting share value.

As protection, shareholders must rely on regulatory statutes and policies that are often more bark than bite. Regulation S-K and Financial Accounting Standard No. 5 ("FAS 5") both explicitly require routine environmental status reports, especially if a liability may reasonably exist. Furthermore, there are also implied disclosure requirements in the Securities Exchange Acts of 1933 and 1934, as well as Environmental Protection Agency policies that exist to stimulate more frequent, honest, and accurate environmental reporting. Unfortunately, although the guidelines and requirements are well-established, the incentive to break or circumvent the rules (e.g., more investors) has long outweighed the risk of violation.

Times have changed, however. The adoption of the Sarbanes-Oxley Act of 2002 ("SOX") heralded a new era of corporate disclosure. The rules remain the same—Regulation S-K, FAS 5, etc., all exist unchanged. The key difference is in the enforcement. Specifically, SOX gave the old rules new teeth.

To encourage compliance, SOX introduced a new element of accountability: the consequences of failure to comply are shared by the company and their senior officers. For instance, willful false certification of required reports could result in a $5 million dollar fine and 20 years in prison for a guilty officer. Few CEOs are willing to risk their money and freedom in exchange for temporarily-misled stockholders.

While the incentive for better reporting is a key benefit to SOX, the trickle-down effect is just as important. More accountability at the top turns in to more accountability throughout, and, in turn, better organization. Ultimately everything comes together to paint a much happier, fairer picture for both shareholders and the environment, alike. No longer do shareholders have to rely on illusory protection from unenforced regulations. With corporate officers finding themselves under the intense heat of the SOX spotlight, shareholders can invest with confidence, knowing that there are not any hidden environmental catastrophes looming.

Fire in the Hole: Aluminum Dross in Landfills

This Note appeared in JNREL Vol. 22. No 2. and was written by staff member Thomas Szcsygielski. Staff member Sunni Harris wrote the following abstract.

Every year there are approximately 8,300 fires that occur in landfills. Landfill fires frequently emit harmful dioxins that can cause cancer, liver damage, skin rashes, and reproductive disorders. A growing subset of these fires is caused when aluminum dross reacts with water.

Aluminum dross is the material that is left behind when aluminum ore is melted or processed. Five million tons of aluminum dross is produced per year as aluminum is often used for such commercial products as pistons, engine and body parts for cars, beverage cans, doors, siding and aluminum foil. Aluminum dross can become dangerous when it is improperly stored in landfills because it is highly combustible when mixed with water.

While aluminum dross storage can be easily regulated by legislation, it currently is not. CERCLA (The Comprehensive Environmental Response, Compensation, and Liability Act) is the primary source of federal jurisdiction over hazardous material dump sites. CERCLA allows the EPA to undertake direct removal or remedial action to protect the public health or the environment when it determines that release of a hazardous substance poses an imminent and substantial danger; however, the EPA has not used CERCLA to regulate aluminum dross because it does not consider aluminum dross a hazardous material. It is interesting that while the EPA does not officially recognize the production of aluminum dross as hazardous, it recognizes the need for its regulation.

Barmet Aluminum Corp v. Reilly illustrates this point well. In Barmet, the plaintiff operated an aluminum recycling plant that produced aluminum dross as a by-product. The plaintiff stored the dross in landfills; however, the EPA placed these landfills on a list of high priority hazardous sites under CERCLA and threatened to hold the plaintiff liable for damage to a nearby stream that originated in the waste. The plaintiff sued for injunctive relief arguing that the EPA forced them to expend resources for expensive, remedial feasibility studies before they were deemed responsible for the damage to the nearby river. The court rejected the plaintiff's argument. Barmet is a demonstration that while the U.S. EPA does not deem aluminum dross as legally hazardous, they recognize the importance of its regulation.

Going forward, there are three main suggestions to decrease the amount of fires that are started because of the improper disposal of aluminum dross: (1) continue to allow landfills to be responsible for their own dross, (2) encourage or mandate companies that produce dross as a by-product to recycle it, or (3) have the EPA classify aluminum dross as hazardous substance. The most effective solution will most likely be a combination of the aforementioned approaches.

The Endangered Species Act and the Conflict With Modern Economic and Development Interests

This note written by staff member Michael D. Russell appeared in JNREL Vol. 22 No.2. The abstract was written by staff member Ramsey Groves.

Congress enacted the Endangered Species Act (ESA) in 1973. The ESA was enacted because many people were concerned about several species and their diminishing populations. These species included the bald eagle, the American alligator, the wolf, and the grizzly bear. Accordingly, one of the main purposes of the ESA is to protect these and other species of fish, wildlife, and plants. Another purpose of the ESA is to protect the ecosystems of both endangered and threatened species. These ecosystems are termed "critical habitats." Disputes stemming from the ESA often concern the impact of an economic development on a habitat, which ultimately harms a species.

Two competing interests are generally involved in ESA conflicts. These are the interests of conservation and the interests of economic development. The ESA tends to place more value on conservation interests than economic development concerns. Due to these two clashing interests, this statute has produced a great deal of controversy. However, economic considerations also affect the conservation side of the dispute. For example, many citizens, such as fishermen, rely upon a species for their livelihood. If that particular species is not protected and ultimately eradicated, there will be grave economic consequences.

To ensure that specific species are protected, the ESA provides federal agencies with certain duties. Unless the agency has been granted an exemption, the ESA requires every federal agency to guarantee that its actions do not harm an endangered or threatened species. The agency in question is forced to find alternatives if it is determined that specific actions would violate the ESA. If no alternatives are available, a committee is formed to determine whether economic interests outweigh the interests of the ESA. This committee, which has become known as the "God Squad," may choose to allow agency action. This committee is essentially playing God because it determines if a species is sacrificed due to a stronger economic interest.

The ESA does provide for judicial review, but there is no express standard of review included in the statute. According to courts, the arbitrary and capricious standard is the appropriate standard of review under the ESA. Consequently, courts should generally defer to reasonable agency decisions. Courts may not weight interests because, in reality, agencies are better equipped to perform this balancing function.

There has been a great deal of controversy due to the ESA. For example, in the middle of a drought in the Klamath Basin, the government shut off irrigation water to provide sufficient water levels for a species of fish. Due to lack of access to water, farmers and ranchers were adversely affected. Additionally, people in Georgia have faced water shortages because the ESA required a certain amount of water to be released downstream to protect endangered species. These examples illustrate how the ESA forces judgment calls when important but competing interests clash. As a result, the ESA will certainly remain a hotly debated statute for years to come.

“The Pending Farmers’ Market Fiasco: Small-Time Farmers, Part-Time Shoppers, and a Big-Time Problem”

Written by staff member Brandon Baird, this Note appeared in KJEANRL Vol. 1 No. 1. This abstract is written by staff member Brandon Wells.

The recent growth in farmer’s markets has created increased complexities in dealing with liability for injuries from food sold at these markets. The main focus of this note is on the implications of applying the modern “consumer expectations” test of food liability to the markets, as well as what duties the vendors at these markets may owe to the consumers that visit them.

The analysis begins with a brief discussion of the history of farmer’s markets, noting that farmer’s markets have been around essentially as long as people have been trading for produce. A brief timeline is provided, outlining the shift from early products liability law that applied a strict liability theory to the sellers of food to the modern “consumer expectations” test. The “consumer expectations” test actually provides food purchasers less protection than strict liability, mainly because the “consumer expectations” test allows a jury to decide whether the reasonable consumer should have expected to find the defective aspect of the food.

The legal liability of the farmer’s markets is of significant importance, and there is much concern over whether the mostly uninsured farmer’s markets can continue to thrive while facing inevitable products liability claims for defective food. There is also an interest in the protection of farmer’s market consumers, and how the law can come to their aid. Courts have found manufacturers and restaurants liable for failing to warn of possible contamination in food, and the duty to warn should be applied to farmers in markets as well.

While some markets do require their vendors to carry liability insurance, unfortunately most do not. This opens up vendors to a potentially unlimited amount of liability. Most farmers’ market vendors don’t have many assets, and while this may prevent them from acquiring insurance; it may also prevent them from ever having to defend against a claim. Pursuing a claim against a vendor with little assets to satisfy a judgment may not be practical for injured consumers.

Although growing more prominent with local purchasers trying to save money in a tough economy and those that just want to enjoy local fresh produce; farmer’s markets are not completely safe for consumers. Contamination of food is at great risk with farmer’s markets, especially since farmers are mostly unregulated and are allowed to process foods such as jam, jelly and cake in their own kitchens. A failure to warn combined with uninsured vendors makes claims against farmers more complex and less remedial than those against large food retailers. While farmer’s markets have the ability to be a great part of our future society, the legal liabilities involved are certainly a risk factor we can’t ignore.

Reining in the Horse Racing Industry: A Proposal for Federal Regulation of Steroid Use in Racehorses

Appearing in KJEANRL Vol. 1 No. 1, this note was written by staff member Jennifer Jabroski. The abstract was written by staff member Bryan Henley.

The use of performance enhancing drugs is a major and ongoing controversy in many professional sports involving human athletes, most notably Major League Baseball. In general, arguments surrounding these issues are invariably drawn to the effect these drugs have on the integrity sport itself, and the risk of harm that they have on the athletes. It should come as no surprise that many of the same problems permeate sports where nonhuman athletes compete, such as horse racing. Strong arguments have been put forth that improper use of anabolic steroids on racehorses both harms the endeavor of sport of racing itself and increases the risk of injury to the horse. Accordingly, many jurisdictions have “banned” use of these drugs. However, many steroids are distillations of naturally occurring chemicals found in the body, so regulation relies on setting reasonable thresholds where the occurrence of a concentration in excess of that threshold denotes a foreign supply. Furthermore, these drugs do have valid medical uses that regulation should not encourage trainers to neglect, less such regulation become an instrument of harm to the horse – a purpose in direct contrivance of its generally accepted goals.

In her KJEANRL note entitled “Reining in the Horse Racing Industry: A Proposal for Federal Regulation of Steroid Use on Racehorses,” Jennifer M. Jabroski explores the current regulatory schemes of four states with a well developed horse industry: Kentucky, California, New York, and Illinois. These schemes are then compared with each other and with the suggested standards set for by the Racing Medication Testing Consortium, which is a voluntary body composed of major stakeholders and technical experts for the horse racing industry. The result is inconsistency; inconsistency with the drugs, their therapeutic regulation, and the penalties associated with noncompliance. Such inconsistency is anathema to economic development of the sport and possibly the health and well being of the horses themselves. As it currently exists, horse racing relies heavily on the transportation of the same horse between multiple states. A diligent owner would be burdened with compliance to the multiple, and potentially contradictory, regulations of all relevant states. Alternatively, as many jurisdictions have failed to regulate at all, horses that only race in unregulated jurisdictions would be placed at greater risk.

Federal regulation is the solution that Ms. Jabroski proposes. Empowered by the commerce clause, Congress could prescribe a uniform regulation of steroid use for race horses. This uniformity would be of economic benefit to the industry by providing its participants with a clear and consistent standard of operation. Additionally, and perhaps most importantly, the integrity of the sport would be maintained both by direct fair standards of competition while simultaneously securing the safety of all racehorses within the United States.