ENVIRONMENTAL

DISPUTE RESOLUTION

ENVIRONMENT, DEVELOPMENT, AND PUBLIC POLICY A series of volumes under the general editorship of Lawrence Susskind, Massachusetts institute of Technology, Cambridge, Massachusetts

ENVIRONMENTAL POLICY AND PLANNING Series Editor: Lawrence Susskind, Massachusetts institute of Technology, Cambridge, Massachusetts

CAN REGULATION WORK? Paul A. Sabatier and Daniel A. Mazmanlan

PATERNAUSM, CONFUCT, AND COPRODUCTION Learning from Citizen Action and Citizen Participation In Western Europe Lawrence Susskind and Michael Elliott

BEYOND THE NEIGHBOHOOD UNIT Residential Environments and Public Policy Trldlb Banerjee and William C. Baer

RESOLVING DEVELOPMENT DISPUTES THROUGH NEGOTIATIONS Timothy J. Sullivan

ENVIRONMENTAL DISPUTE RESOLUTION Lawrence S. Bacow and Michael Wheeler

Other subser/es:

CITIES AND DEVELOPMENT Series Editor: Uoyd Rodwin, Massachusetts InstItute of Technology, Cambridge, Massachusetts

PUBUC POUCY AND SOCIAL SERVICES Series Editor: Gary Marx, Massachusetts institute of Technology, Cambridge, Massachusetts

ENVIRONMENTAL

DISPUTE RESOLUTION

LAWRENCE S. BACOW Massachusetts Institute of TechnolosY Cambricl&e, Massachusetts

AND

MICHAEL WHEELER New EfI8land School of Law Boston, Massachusetts and Massachusetts Institute of TechnolCJBY Cambricl&e, Massachusetts

Springer Science+Business Media, LLC

Library of Congress Cataloging in Publication Data

Bacow, Lawrence S.

Environmental dispute resolution.

(Environment, development, and public policy. Environmental policy and planning)

Bibliography: p. Includes index. 1. Environmental mediation —United States. I. Wheeler, Michael, 1943-

II. Title. III. Series. KF3775.B32 1984 344.73W0269 8446066 ISBN 978-1-4899-2298-4 ISBN 978-1-4899-2296-0 (eBook) DOI 10.1007/978-1-4899-2296-0

10 9 8 7 6 5 4 3

©1984 Springer Science+Business Media New York

Originally Published by Plenum Press, New York in 1984 Softcover reprint of the hardcover 1st edition 1984

All rights reserved

No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, microfilming, recording, or otherwise, without written permission from the Publisher

To our children

PREFACE

This book has its origins in an M.I.T. research project that was funded by the U.S. Environmental Protection Agency (EPA). Our immediate objective was to prepare a set of case studies that examined bargaining and negotiation as they occurred between government, environmental advocates, and regulatees throughout the traditional regulatory process. The project was part of a larger effort by the EPA to make environmental regulation more efficient and less litigious. The principal investigator for the research effort was Lawrence Sus­skind of the Department of Urban Studies and Planning. Eight case studies were prepared under the joint supervision of Susskind and the authors of this book.

Studying the negotiating behavior of parties as we worked our way through an environmental dispute proved enlightening. We observed missed oppor­tunities for settlement, negotiating tactics that backfired, and strategies that ap­peared to be grounded more in intuition than in thoughtful analysis. At the same time, however, we were struck by how often the parties ultimately managed to muddle through. People negotiated not out of some idealistic commitment to consensus but because they thought it better served their own interests. When some negotiations reached an impasse, people improvised mediation. These disputants succeeded in spite of legal and institutional barriers, even though few of them had a sophisticated understanding of negotiation.

It soon became clear that the case studies we were developing had a power­ful teaching potential. The studies provided documented examples of oppor­tunities and obstacles to negotiation in a variety of regulatory contexts, among them permitting, enforcement, grant making, and rulemaking. Our pedagogical goal was twofold: first, to prepare materials that would help environmentalists, developers, and regulators negotiate more effectively and intelligently; and sec­ond, to identify for legislators, planners, and managers ways in which laws could be amended and procedures revised to encourage nonadversarial dispute reso­lution.

Whether one is locked into a particular dispute or is concerned with broader policy, a sophisticated understanding of the dynamics of bargaining and negotia-

vii

viii PREFACE

tion is essential. This book represents an attempt to teach a structured, analytic approach to the major issues likely to be encountered when people work their way through environmental controversies. Our mode of analysis draws heavily from decision theory. Other scholars might view this topic from a different perspective-a psychological approach, to name one. A variety of perspectives can be valuable, but we are convinced that everyone can benefit from sharper analytic negotiating skills.

We have taken the original case studies prepared for the EPA, edited them heavily for teaching purposes, and supplemented them with essays, notes, ques­tions, problems, additional readings, and descriptions of still other cases. (For those who are interested, a full version of the cases is available in a book entitled Resolving Environmental Regulatory Disputes by Lawrence Susskind, Lawrence Bacow, and Michael Wheeler [New York: Schenkman, 1984].) Although this book should be of interest to anyone who may someday be involved in an environmental controversy, it is organized as a self-contained text for a one­semester graduate-level course in environmental dispute resolution. A course by that name has been offered by the New England School of Law and M.lT. each of the past four years. The materials have been revised substantially in that time. The book is designed to be accessible to students from a variety of backgrounds­law, planning, management, public administration, and engineering. In fact, our course has usually drawn a mix of students from such schools and has thus served as a forum for examination of different perspectives on environmental problems. Our materials assume no prior training or exposure either to bargain­ing, negotiation, or environmental policy. Draft portions of the book have also been used in courses at the University of California, the University of Colorado, the University of Hawaii, Harvard Law School, and the Harvard Graduate School of Education.

Readers will quickly recognize that we believe that, in many instances, face­to-face negotiation of environmental disputes is more likely than litigation to produce a fair and efficient outcome that serves the interests of all sides. Yet we do not view negotiation as a panacea. Through questions and notes, we have tried to highlight the pitfalls and shortcomings of negotiation as well as the advantages.· More fundamentally, we believe it is important to understand the interplay of negotiation and litigation; in many instances, both paths are followed.

The organization of the book reflects the order in which negotiation issues arise in practice. The first chapter examines the nature of environmental con­flict, its sources, its costs, and the frustrating characteristics of litigation that often give rise to a search for alternatives. The second chapter on dispute resolution theory introduces the analytic approach to negotiation that is developed in the remainder of the book; in this chapter, we develop a vocabulary for analyzing

PREFACE ix

negotiation problems. Chapter 3 focuses on the first problem that confronts a prospective negotiator: What are my incentives to negotiate and what are the incentives of the other parties? This matter of incentives first arises at the start of bargaining but remains relevant throughout a dispute as the parties continually assess and reassess the factors that keep them at the bargaining table. Chapter 4 analyzes one of the strongest incentives for negotiation: the prospect of mutually beneficial gains through joint problem solving. Chapter 5 explores the problems inherent in resolving disputes that appear to be highly technical; that is, disputes in which data, modeling, and differing expert opinions lie at the core of the problem. The next two chapters look at how bargaining and negotiation change when more than two parties are at the table and at how issues of compliance affect the negotiation process. Chapters 8, 9, and 10 are devoted to mediation. They examine the circumstances under which the presence of a nonpartisan facilitator may help to achieve agreement; they also raise a number of important questions about the ethical responsibilities of the mediator in an environmental dispute. Chapter II analyzes multiparty negotiation as it occurs at the policy development stage. Chapter 12 adopts a systemic perspective and reviews at­tempts to institutionalize negotiation through reforms in a traditional dispute resolution process. The book concludes with a look at a number of themes that are touched on but not directly addressed in earlier chapters.

Many people made important contributions to the writing of this book. Foremost among them was our colleague and friend, Larry Susskind. He took responsibility for organizing and administering the original research project; he proposed the idea of a casebook; he patiently reviewed drafts and offered advice based on his use of the teaching materials; and he gently prodded us to keep the project on track. We are indebted to him for both his advice and his enthusiasm.

The original versions of the cases that appear in this book were researched and written by a talented group of students and postdoctoral fellows. The original research group consisted of Heidi Burgess, David Gilmore, Stephen Hill, Diane Hoffman, Alexander Jaegerman, Jennifer Knapp-Stump, Mary Lucci, Douglas Smith, and Timothy SuJlivan. The original author of each case is identified where his or her case appears in the book. We are grateful to Julia Wondolleck for her permission to use portions of her Grayrocks Dam case. We are also indebted to our students for their comments on earlier drafts of this book. Our colleague from the Harvard Negotiation Project, David Kuechle of the Harvard Graduate School of Education, contributed greatly through additional research and updating of the Brown Paper case that appears in Chapter 3. Thomas ScheJling of Harvard University generously shared with us some of his superb teaching materials on bargaining.

We also wish to thank Henry Beal, formerly of the EPA, who helped initiate the research project that gave rise to this book. The Department of Urban

x PREFACE

Studies and Planning at M.I.T., the New England School of Law, and the Program on Negotiation at Harvard Law School also contributed institutional support to this project. Finally, we wish to thank Heather Worrel and Audrey Latimer who displayed great patience and skill in helping to prepare the manu-script for publication. .

CONTENTS

CHAPTER 1

The Nature of Environmental Conflict ............................. .

Introduction ................................................ . The Sources of Environmental Conflict . . . . . . . . . . . . . . . . . . . . . . . . . .. 5 The Storm King Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 Litigating Environmental Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 The Scope of Judicial Review .......... '. . . . . . . . . . . . . . . . . . . . . . .. 17 Negotiation as an Alternative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18

CHAPTER 2

Dispute Resolution Theory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 21

Introduction .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 21 Negotiation Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 22 Incentives to Negotiate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 26 Obstacles to Consensus ....... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 28 Problem I .................................................. 30 Zero-sum and Nonzero-sum Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . .. 33 Problem 2 ......... '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. 34 Problem 3 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 35 Bargaining Strength. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 38 Problem 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 40 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 41

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xii CONTENTS

CHAPTER 3

Incentives to Negotiate . ................................. " . . . . .. 42

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 42 Incentives to Settle a Lawsuit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 43 Incentives to Negotiate in Other Contexts. . . . . . . . . . . . . . . . . . . . . . . .. 44 Case Study: Grayrocks Dam. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 46 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 51 Inducements and Obstacles .................................... 52 Problem .................................................... 54

CHAPTER 4

Toint Problem Solving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 56

Introduction ......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 56 Case Study: Brown Paper. ; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 56 Study Questions ............................................ " 70 Problem 1 ........................................... ~ . . . . .. 71 Problem 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 71 Problem 3 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 72 The Search for Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 73

CHAPTER 5

Data Negotiation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 76

Introduction ................................................ 76 The Holston River Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 77 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 89 Judicial Review of Technical Decisions. . . . . . . . . . . . . . . . . . . . . . . . . .. 91 Courts and Technical Issues .................................. " 96 The Elusive Nature of Facts in Environmental Cases. . . . . . . . . . . . . .. 99

CHAPTER 6

Two-Party Versus Multiparty Negotiations. . . . . . . . . . . . . . . . . . . . . . . .. 104

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 104 Case Study: The West Side Highway. .. .. . . . . . . . . . . .. . . . . . . . . . .. 105

CONTENTS xiii

West Side Highway Study Questions. . . . .. . . . . .. . . . ... . . . . . . . . .. 108 Negotiation Participants: Representation . . . . . . . . . . . . . . . . . . . . . . . .. 109 Study Questions on Sullivan's Proposal. . . . . . . . . . . . . . . . . . . . . . . . .. 113 Case Study: The Snoqualmie Dam Dispute . . . . . . . . . . . . . . . . . . . . .. 113 Questions on Snoqualmie. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 115 Multiparty Negotiation and Coalitions. . . . . . . . . . . . . . . . . . . . . . . . . .. 115 Problem I ................................................. 117 Problem 2 ................................ '" . . . . . . . . . . . . .. 118 Problems of Cost Sharing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 119 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 122 Cross-References .......................................... ". .. 122 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 123 Reading References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 124

CHAPrER 7

Prospects for Compliance. . .. .. . . . . . .. . . .. . . .. . .. .. . . . .. . . . .. . . .. 126

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 126 Case Study: Jackson, Wyoming-20l Grants

for Municipal Wastewater Treatment.. .. . . . . . . . . .... . . . . . . . .. 127 General Study Questions ..................... " . . . . . . . ... . . .. 143 Hypothetical Problem. . . . . . . . . . . . . . . . . . .. . . . .. . . . .. . . . . .. . ... 145 The Compliance Issue. . .... .. . . . ..... .. . . . . . . . . . .... . . . .. . .. 145 Cross-Reference: A Look Ahead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 154

CHAPrER 8

Mediation Techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 156

Introduction .............................................. , 156 Case Study: Mediation and the Brayton Point Coal Conversion. . . . .. 158 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 184 Cross-Reference. . . .. . . . . . ... . . ..... ..... .... . . ... . . .. . . . . . .. 185 Mediation Study Questions . . . . . .. . .. . . .. . . . .. . . . .. . .. . .. . . ... 186 Mediation Skills. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 187

CHAPrER 9

Mediating LArge Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 195

xiv CONTENTS

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 195 Case Study: The Foothills Water Treatment Project. . . . . . . . . . . . . .. 196 General Study Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 240 Mediation Study Questions ................................... 241 Foothills Epilogue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 243 The Role of the Press. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 244

CHAPTER 10

Mediation Ethics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 248

Introduction .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 248 The Concept of Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 248 Problems of Implementing Accountability. . . . . . . . . . . . . . . . . . . . . . .. 253 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 262 Related Ethical Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 262 Study Questions: Incentives and Ethics. . . . . . . . . . . . . . . . . . . . . . . . .. 269 The Mediator With Clout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 270 Conclusion ................................................ 275

CHAPTER 11

Negotiated Rulemaking . .................................... .- . .. 279

Introduction .............. ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 279 Case Study: Water Treatment Rulemaking ....................... 280 Case Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 303 Competition or Cooperation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 304 Study Questions on Negotiations and the Rulemaking Process. . . . . .. 305 Reform .............................................. ; . . . .. 305 Study Questions. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 316

CHAPTER 12

institutionalizing Negotiation . .............................. ~ . . .. 323

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 323 Removing Procedural Obstacles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 324 Conflict Anticipation and Its Kin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 326 Mandatory Negotiation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 328

CONTENTS xv

Study Questions on Colstrip. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 336 Cross Reference Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 336 Encouraging Negotiation through Incentives ..................... 339 Study Questions on the Siting Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 343

CHAPTER 13

Epilogue,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 347

Introduction ............................................... 347 Small-Scale Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 347 Problem I ................................................. 350 Problem 2 ............................................... " 354 Politics and Alternative Dispute Resolution. . . . . . . . . . . . . . . . . . . . . .. 359 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 362 Conclusion: Negotiation and Public Policymaking. . . . . . . . . . . . . . . .. 362

Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 365

Index . ...................................................... 369