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March 8, 2022  |  Written by Michelle E. Chester

Supreme Court Hears Oral Arguments on the Scope of EPA’s Authority to Regulate Greenhouse Gases

The Supreme Court heard arguments last week in the case of West Virginia v. Environmental Protection Agency, in which more than a dozen states and coal companies challenge the United States Environmental Protection Agency’s (EPA) authority to regulate greenhouse gas emissions. A key question in the litigation is the applicability of the “major questions doctrine”: the legal doctrine that courts should not defer to agency statutory interpretations on questions of “vast economic or political significance.” (See, e.g., Util. Air Regulatory Group v. EPA (2014) 573 U.S. 302, 324 [“We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance.’”] Those opposed to EPA’s climate change regulations argue, in part, that such rules are an administrative overreach violating principles of federalism dividing responsibility for environmental issues between the states and the federal government. The unique issue raised in West Virginia v. Environmental Protection Agency is that there is no current regulation of greenhouse gases in effect. Instead, the case addresses a hypothetical future regulation.

In 2015, the Obama administration relied on Clean Air Act Section 111(d), which authorizes the EPA to impose emission control standards for existing stationary sources of air pollutants, as support for the administration’s Clean Power Plan (CPP). The CPP established state-specific emission reduction goals and guidelines for the development and implementation of state plans to meet those goals, which included shifting carbon-intensive energy production to renewable energy sources. (See 80 Fed.Reg. 64965 (Oct. 23, 2015).) The Trump administration repealed the CPP in 2019, and instead issued the Affordable Clean Energy (ACE) rule, which relied on a narrower interpretation of the Clean Air Act to limit EPA’s regulation to pollution control technologies that can be installed at individual power plants – as opposed to the sector‑wide technological changes proposed under the CPP. In 2021, on the last day of Trump’s presidency, a federal appeals court for the D.C. Circuit dismissed the ACE Rule and rejected the repeal of the CPP on grounds that it “hinged on a fundamental misconstruction of . . . the Clean Air Act.” (Am. Lung Ass’n v. EPA (2021) 985 F.3d 914, 930.) The rulemaking was sent back to the EPA, and is now with the Biden administration for consideration of new rules.

Notably, despite the partisan history of the formation of the proposed rules, opponents of the EPA’s regulation of greenhouse gases frame their argument as an issue of administrative authority – not as opposition to the climate change reduction objectives of the rules. In this context, plaintiffs argue that their case is not premature, even though specific rules for greenhouse gas regulation are not yet in effect. They contend that there is a present question of the scope of federal regulation. The parties disagree as to whether the Clean Air Act’s statutory language allows the EPA to “look beyond the fenceline [sic]” of an individual power plant for achieving emission reductions. Specifically, plaintiffs contend that the systematic approach to emission reduction employed by the CPP – as opposed to the source-specific approach under the ACE Rule – violates the major questions doctrine and federalism principles, and the Court should reject such a broad interpretation of Section 111(d).

At oral argument, the justices asked the parties about the major questions doctrine and the related non-delegation doctrine – or the principle that it is the court’s role to interpret “major” legal questions, not agency officials. Although the issue in this case concerns federal regulation of emissions from power plants, the outcome of the case and the Court’s supporting interpretation of the relevant doctrines will have broader implications for federal agency regulations under many federal statutes. Most immediately, we can expect the ruling to have an impact on the Biden administration’s formation of a replacement for the CPP and ACE Rule, as well as other air quality-related regulations, such as limits on auto emissions.

A final decision in West Virginia v. Environmental Protection Agency is expected by the close of the Court’s term in June. For more information on this case or other air issues, please contact Michelle Chester at mchester@somachlaw.com or Michael Vergara at mvergara@somachlaw.com.

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