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In Both the USA and Israel, Energy Issues Test the Limits of Supreme Court Power
In Both the USA and Israel, Energy Issues Test the Limits of Supreme Court Power

This article originally ran on Forbes.com on July 26, 2023. All rights reserved.

Daniel B. Markind is a Forbes.com energy column contributor. The views expressed in this article are not to be associated with the views of Flaster Greenberg PC.

The right-wing government of Israeli Prime Minister Benjamin (Binyamin) Netanyahu and the left-wing government of US President Joseph Biden do not often see eye-to-eye on many issues, but both curiously have in common a desire to limit the power of each country’s Supreme Court. In each country, energy issues are also among the flashpoints behind the movement to limit the high court’s powers.

For months now in Israel, demonstrations have raged against attempts by the Netanyahu Administration to limit the power and selection process of “Bagatz,” which is the Israeli Supreme Court. In fact, the protests have gotten so bitter that, for the first time in memory, or possibly even in the nation’s entire history since it was created in 1948, reservists in the most elite units of the Israeli military are refusing to serve. This comes at a time when Iran makes no secret of its desire to destroy the Jewish State, and the need for a cohesive and committed military has been never more essential to Israel’s long term survival.

The protests focus on attempts by Netanyahu to shield himself from potential legal liability for corruption, to permit the return to the Knesset, the Israeli Parliament, of Arye Deri, leader of a Coalition partner who previously was convicted of corruption himself, and to bring the Supreme Court under the control of the country’s political leadership, thereby possibly vitiating that Court’s authority on many issues. Meanwhile, the desire to curb the power of the Court remains popular across much of the political spectrum.

Specifically, in recent years, Bagatz has interjected itself in many areas that Israelis believe should be decided by the political process and not the judiciary. Among them, perhaps even first among them, has involved the issue of natural gas development.

In 2016, the Israeli state oil concern, Delek, entered into an agreement with the American energy company, Noble Energy, to develop Israel's offshore Leviathan natural gas field. However, Bagatz inserted itself into the situation, ruling that one part of the agreement, which provided that it could not be changed for ten years, was not "reasonable."

In 2022, Bagatz went the opposite way on another natural gas issue. Israel and Lebanon had then been locked in a contentious disagreement over their maritime border, as it impacted development of another offshore natural gas field. However, the leftist government of the previous Prime Minister, Yair Lapid, under substantial pressure from the Biden Administration, gave away to Lebanon the entirety of the disputed territory in return for a curious promise of royalties from the Lebanese gas sale. No mention was made about how this promise would be enforced (it likely won't be).

Despite Israel’s getting practically nothing from the agreement, Bagatz ruled that this deal was “reasonable” and allowed it to go forward, thus reinforcing the view of many on the right that the High Court looked at legal issues mostly through a political and not a legal lens. Indeed, the first step in Netanyahu’s attempted Bagatz “reform,” after replacing Lapid to regain the position of Prime Minister, was to limit the definition and jurisdiction of the concept of “reasonableness.”

To be sure, the series of bills brought to the Knesset relating to Bagatz goes much further than merely redefining the concept of "reasonableness," which Bagatz has used to inject itself in many other issues ranging from natural gas agreements to ministerial appointments. Indeed, so proactive has Bagatz been in involving itself in what are inherently political issues that it is perceived by many to it be engaged in a substantial power grasp that could fundamentally alter Israel’s democratic character and political tradition. Still, the energy issues have crystallized for many what had been bubbling up for decades: that is, that Bagatz has been usurping too much power and replacing it with its own, non-democratic, non-judicial determinations.

Meanwhile, in the United States, the Supreme Court may soon be called on to decide an inherently political question of its own: that is, whether Congress has the ability to dictate which federal court has jurisdiction over a particular dispute. Specifically, and not unlike Israel, the core issue again relates to natural gas, in this case the Mountain Valley Pipeline. This pipeline, which would transmit natural gas from West Virginia along a 1000 mile route to Tennessee and Virginia, has been blocked consistently by the Fourth Circuit over issues relating to its crossing of the Jefferson National Forest (Source).

In the recent Fiscal Responsibility Act of 2023, which allowed the debt ceiling to be raised, West Virginia Senator Joe Manchin managed to obtain a provision in the statute that expressly stripped the Fourth Circuit of jurisdiction over the pipeline and specified that any further adjudications must be heard in the DC Circuit instead. However, ignoring if not flaunting that new law, the Fourth Circuit most recently again issued stays of the pipeline construction, this time in response to a challenge from the Wilderness Society. Frustrated, the pipeline developers have now petitioned the Supreme Court for a ruling on whether Congress had the power to replace the Fourth Circuit’s jurisdictional authority over this sort of a project. This week, the Biden Administration actually filed an amicus (“friend of the court”) brief asking the Supreme Court to approve the ability of Congress to limit the jurisdiction of the Fourth Circuit in the debt ceiling law. The  Court upheld another such jurisdiction-stripping provision in 2018 in the case of Patchak v. Zinke (Source), but these cases are rare and the law remains unsettled.

Politically, the juxtaposition with what is happening in Israel puts Biden and the Democrats in a difficult spot. They have warned Israel’s Netanyahu about any rash moves in altering the Israeli Supreme Court’s status, yet many Democrats, frustrated by the United States Supreme Court’s Dobbs decision and other recent rulings that have leaned more conservatively, have proposed themselves making changes to the United State’s fundamental Supreme Court structure. In both countries, the situation highlights the centrality of energy issues in modern jurisprudence. It remains an open question as to whether each society’s political center will hold, and whether good judgment can overrule the passions of the time.

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