Utility Air Regulatory Group v. EPA: Climate Litigation and Statutory Construction

June 24, 2014
Guest Post

by Justin Pidot, Assistant Professor, University of Denver Sturm College of Law; Member, Board of Directors, ACS Colorado Lawyer Chapter; Faculty Advisor, University of Denver Sturm College of Law ACS Student Chapter

The Supreme Court handed down its decision in Utility Air Regulatory Group v. EPA yesterday. While vacating aspects of the EPA’s decision, the Court chose to leave EPA with authority to address the vast majority of the polluters the agency sought to regulate. In so doing, the opinion also offers a twist on the Court’s continuing debate about statutory construction and administrative law. 

Those needing a  refresher on this case, please refer to my two previous ACSblog posts, here and here. For the purposes of understanding the opinion, suffice it to say that the case involves EPA’s “tailoring rule,” which applies one of the more arcane provisions of the Clean Air Act – the Prevention of Significant Deterioration provisions (or “PSD”) – to greenhouse gases (“GHGs”). In so doing, EPA regulated two categories of sources: those subject to PSD regardless of their GHG emissions (referred to as “anyway sources” because they are already subject to PSD anyway). And those only subject to PSD because of the amount of GHGs they emit.

The High Court’s View of the Tailoring Rule

Justice Scalia authored the opinion for the Court, which was largely favorable to EPA despite his staunch opposition to Clean Air Act regulation of greenhouse gases in the 2007 Massachusetts v. EPA case. Writing for a seven-member majority, Scalia upheld the tailoring rule’s requirement that “anyway sources” control GHG emissions.  Writing for the conservative bloc of five justices, Scalia also ruled that EPA unreasonably applied PSD to sources that would not be subject to PSD but for their GHG emissions. 

Practically speaking, this is a significant win for EPA. As Scalia acknowledges, “anyway sources” account for 83 percent of GHG emissions from stationary sources. EPA strenuously defended its authority to regulate “anyway sources”—both in its briefing and at argument—and its emphasis clearly paid off. The sources the Court’s conservatives exempted from the reach of PSD account for only an additional 3 percent of emissions.

The decision also suggests that seven of the justices now view the issues decided in the Massachusetts v. EPA case as settled. Only Justices Thomas and Alito expressed the view that the case should be overruled. 

Scalia’s Atextual Policy-making

One aspect of the Court’s decision that has gone relatively unnoticed may have potential ramifications for administrative law (and thus is of interest to administrative law junkies). Scalia applies the Chevron framework (the primary doctrine courts use to test agency interpretations of statutes) to the tailoring rule and finds the relevant statutory provisions ambiguous. Nonetheless, he writes that that EPA’s interpretation is unreasonable. He explains: “The fact that EPA’s greenhouse-gas-inclusive interpretation . . . would place plainly excessive demands on limited government resources is alone a good reason for rejecting it. . . . EPA’s interpretation is also unreasonable because it would bring about an enormous and transformative expansion in EPA’s regulatory authority without clear congressional authorization.” 

Neither criterion finds its source in the text of the Clean Air Act or any other statute. Instead, Justice Scalia is applying his own sense of logic to deem “unreasonable” agencies that interpret ambiguous statutes too expansively and too expensively. In other words, Scalia derives the too expansive/too expensive constraint out of whole cloth, with a handful of citations thrown in for dressing, because, well, to him they make good sense. Such legal analysis can only be called “policy reasoning,” and it’s hard to reconcile the majority’s decision with Scalia’s oft-expressed antipathy to policy-based rationales. Is this the same Justice who once penned “[a]lthough assuredly having the virtue (if it be that) of leaving judges free to decide as they think best when the unanticipated occurs, a rule of law that binds neither by text nor by any particular, identifiable tradition is no rule of law at all”? Is Scalia softening in his famous disdain for policy arguments that, to his mind, substitute judges for legislators?

Justice Breyer, often comfortable with policy reasoning, thinks Scalia’s approach makes little sense. Joined by his three liberal sistren, Breyer’s dissent would have upheld the tailoring rule in toto. In reaching that conclusion, Breyer highlights his disagreement with the majority about the task of interpretation. Rather than turning to free-standing policy justifications about “excessive” costs and authority, Justice Breyer invokes statutory purpose.  As he explains, “[f]rom a legal, administrative, and functional perspective—that is, from a perspective that assumes that Congress was not merely trying to arrange words on a paper but was seeking to achieve a real-world purpose—my way of reading the statute is the more sensible one.” (Emphasis per Justice Breyer). Because EPA interpreted the statute so as to advance Congress’s purposes, Breyer would have left undisturbed the agency’s decision.

Lasting Importance

The main attraction of yesterday’s decision is likely to be its symbolic importance. EPA has other, better tools to address climate change and has made clear that it intends to use them. But the agencies appetite and ability to use those tools will be affected by the public and media response to yesterday’s decision. So far, a cohesive media narrative has yet to emerge.  The headlines are muted and fail to valorize or demonize EPA’s efforts. Examples include The Washington Post: “Justices support EPA rules with some limits;” Forbes’s: “Tread Carefully with Greenhouse-Gas Regs, Court Warns EPA;” Fox News: “Supreme Court Limits EPA Global Warming Rules;” and MSNBC: “Supreme Court decision on EPA is a mixed bag.” As I write this, the opinion is still only a few hours old, so there remains ample time for the media to fit the opinion into familiar narratives about ideological clashes amongst the Justices, or interpret it to advance political agendas related to climate change. Should, however, the decision be viewed as too technical or too ambivalent to serve as a source for political polemics, it may well be that it will have longevity only for students of administrative law. 

At this early hour, yesterday appears to have been a good day for EPA, environmentalists, and advocates for federal policy to contain GHG emissions