Introduction
The legal environment is one of the most important external environmental factors that dictate the operations of a firm. Business units cannot operate in an environment that does not have clearly defined laws that govern their trade and relationship with other entities. The laws are made to help regulate business practices of various entities and other entities in order to ensure that operations of one firm do not interfere with the operations of another firm (Rom, 2012). These laws help create a healthy environment where firms can operate cordially without the fear of unlawful interferences from various stakeholders. This research will analyze the impact of environmental law on businesses with a focus on the litigation filed by Environmental Defense against Duke Energy. Duke Energy is accused of violation of the Clean Air Act in the renovations of its plants within the United States. The research will analyze the jurisprudence and administrative law concerning this case. The research will focus on the decisions made by different courts, and the reasons behind these decisions.
The fundamental conflict between Environmental Defense and Duke Energy
Lindstrom (2011) defines jurisprudence as “The study of the theory and philosophy of law which is concerned with the law and the principles that lead courts to make the decisions they do, and that which deals with ethical questions concerning the administration of justice within a society.” As stated in this definition, the focus of this study will be on the decisions of the courts and the determination of the principles used to arrive at these decisions. According to Bergeson (2010), “Administrative law is the body of law that governs the activities of administrative agencies of government.” As was mentioned before, business units cannot operate without a body of law and an agency responsible for enforcing the law. These definitions would help in developing the basis of the conflict between Environmental Defense and Duke Energy.
Duke Energy was concerned with the fact that its plants were not operating optimally. Some of its plants were not put into full usage. For this reason, it modified the plants to operate for more hours in order to achieve their full potential. This increased hours of operations increased its productivity. Determined to operate within the law set by PSD (Prevention of Significant Deterioration), this firm ensured that the hourly rate of emissions into the air remained constant even after the improvement of the plant. This firm was also concerned with ensuring that it observes the laws and regulations put forth by NSPS (New Source Performance Standard) concerning the yearly emissions of the plant as stated by the law concerning modification of the plant. Having been keen on following the letter of the law, this firm did not consider it necessary to obtain a certificate PSD permit.
On the other hand, Environmental Defense read mischief out of the actions of Duke Energy. According to the Environmental Defense, it was true that even after modifying its plants, Duke Energy maintained its hourly emission within the originally agreed levels. However, they followed the letter of the law other than the spirit. According to Environmental Defense, the spirit of the law was to ensure that the emissions as per a given period (a year) should be clearly defined (Layzer, 2012). For them, Duke Energy maintained its hourly emissions but increased the number of hours its plants were in operations. This would lead to increased emissions on yearly basis. For this reason, Environmental Defense considered it illegal that this firm did not acquire a permit to this effect. According to Environmental Defense, the spirit of the law was to regulate the total sum of emissions of such firms operating within this country. Duke Energy, therefore, contravened the Clean Air Act. For this reason, they held that Duke Energy had contravened this law and there was a need to issue some disciplinary actions against it. This was the fundamental conflict between Environmental Defense and Duke Energy.
Effectiveness of the legal partnership between the Federal Government and Environmental Defense as a strategy
According to Ong (2011), the state has the supreme power to dictate the activities taking place within its borders. For this reason, all entities would want to develop a legal partnership with it that would be binding as a sign of assurance of state protection. Environmental Defense is a nonprofit making organization concerned with the protection of the environment. This organization checks the activities of various other organizations within the country to ensure that they abide by the laws and regulations about the standards of emission into the environment. In order to ensure that it has the mandate to execute its duties properly, there must be authorization from the supreme authority in the country, which is the federal government. This will give them the power to act with the voice of the federal government. It is with this power that they can execute their duties without any form of contempt from other entities within the country.
In determining the effectiveness of the legal partnership between the federal government and Environmental Defense, it would be prudent to analyze how well the federal government is willing to abide by the decisions made by this body. The partnership would always be considered effective when the government is ready to protect the decision made by this body (Malone, 2007). In this study, the focus will be narrowed to the case pitting Environmental Defense against Duke Energy. This relationship between the federal government and Environmental Defense will be analyzed using the decisions made by government agencies presented in this case (Ferrey, 2010). When Environmental Defense first made its case against Duke Energy to the District Court, this court held that Duke Energy was within its right to modify its operations as long as they did not contravene the hourly rate emissions that they had been permitted before.
Environmental Defense was not satisfied by the decision and appealed the case to the Fourth Circuit. However, the Fourth Circuit upheld the decision made by the District Court Circuit. Still not satisfied with this decision, this body appealed to the Supreme Court. It was at this court that a decision was made that when looking at the letter of the law, it is also important to determine the spirit of the same law. It is important to determine what the law was trying to protect or encourage. Finally, the federal government was able to come to the defense of Environmental Defense. This is a clear demonstration that the legal partnership between the federal government and Environmental Defense is legally binding.
Significant evidence that duke energy violated the Clean Air Act
According to Farber (2011), it is always very important to ensure that the interest of investors is protected if a country is to attract more local and international investments. It is through these investments that a country is able to advance its economic power. For this reason, when a case such as this one arises, it is always important to determine if the investor is guilty as charged. This will assure investors that the law will protect their investment. In determining whether there was any evidence implicating Duke Energy, it is important to analyze the letter and spirit of the Clean Air Act about the modification done by Duke Energy. In this Act, PSD and NSPS define modification based on the hourly rate of emissions. However, one is specifically concerned with hourly emissions while the other is concerned with yearly emissions.
When Duke Energy did its modification, it abided by the hourly emissions, meaning that it did not contravene the letter of the law. However, when the agency concerned with the yearly emissions did its analysis, it was obvious that due to increased hours of operations, Duke Energy would have higher emissions into the environment. Legally, and taking into consideration the spirit of the law, it is obvious that Duke Energy is guilty as charged. Increasing hours of constant emissions would definitely translate to higher yearly emissions, which warrant the need to have a permit towards the same.
The ethics of this case and potential alternative means that might be used outside the court system to resolve this dispute
It is ethical for a firm to work within the confines of the law in order to avoid cases of litigation. In this particular case, Duke Energy should have maintained ethics in order to avoid court cases that may harm their reputation and finances. When such cases arise, there should be ethical alternative means of addressing them instead of going to court. In this case, the best alternative and ethical method would have been arbitration (DiMento, 1986). In the arbitration, the focus should be on both the letter and spirit of the law. Duke Energy should appreciate the fact that if the number of hours is increased without increasing the emissions rate per hour, the overall effect will be an increased emission. Given that Environmental Defense is keen to fight such increases, it should appreciate the need to negotiate and find an amicable solution through arbitration other than clinging to the letter with disregard to the spirit of the law.
The perspective this case could have on both a national and global level
This case could have a massive impact on other similar cases both national and at the global level. Many multinational corporations (MNC) and transnational corporations (TNC) have developed a tendency of abusing the transnational trade agreements once they become stable in the host countries (Ashford & Caldart, 2008). Many of these firms would extend the provisions stated in the law based on their own interpretations and expect protection from the government simply because the law assigned in the agreement protects them. This case will pass a message to them that they have the responsibility to consult with the host country government- through its agencies- whenever they want to make a decision that would expand their operations.
References
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