Utility Air Regulatory Group v. EPA

  • July 1, 2015
    Guest Post

    by Justin Pidot, Associate Professor of Law, University of Denver Sturm College of Law

    In its last decision of the 2014 term, the Supreme Court decided Michigan v. EPA, ruling that EPA must consider costs before deciding to regulate toxic air pollutants from power plants.  Lisa Heinzerling has identified the many questions that remain open in the wake of the Court’s decision.  And Dan Farber and Ann Carlson also provide insightful commentary on the meaning of the decision. As all three suggest, the lasting practical effect of the Court’s decision on mercury and other toxic emissions from power plants remains to be seen.

    Without retreading ground that has been well-covered already, I want to offer two observations.  First, I want to offer some (very cautious) optimism that the legal rule provided by the Michigan v. EPA decision has little effect.  Read broadly, the decision could require agencies in many contexts to consider costs before regulating.  I’m not convinced, however, that the decision necessarily tells us anything about when agencies must consider costs. 

    The Court offers several reasons that EPA unreasonably interpreted its authority to regulate power plants without accounting for the billions of dollars of costs such regulation might impose: 

    First, the Court explains that the toxic air pollution provisions of § 112 of the Clean Air Act differentiate between power plants and other stationary sources.  For sources other than power plants, the Act essentially allows EPA to consider, at most, health and environmental effects.  In contrast, the Act requires EPA to regulate power plants only if “necessary and appropriate.”  This contrast, the Court offers, must mean something.

    Second, the Court opines that appropriate regulation generally requires an agency to think about both the benefits of regulation and its cots.  This suggests, that could be read to presumptively require agencies to consider costs in making regulatory decisions. 

  • 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. 

  • February 28, 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
     
    Around the web, Supreme Court experts are offering cautious opinions about Monday’s oral argument in Utility Air Regulatory Group v. EPA, the Court’s latest climate change case. As expected, all eyes were focused on Justice Kennedy. In the New York Times, Adam Liptak suggests that a point made by Justice Kennedy “did not bode well for the agency.” In his post on SCOTUSBlog, Lyle Dennison has a more EPA-favorable view, suggesting that Kennedy’s “vote seemed inclined toward the EPA, though with some doubt.”
     
    Having read the transcript, I’m inclined to think that EPA is likely to lose, but that the decision may nonetheless be helpful to environmentalists in the long run.
     
    I suspect that Justice Kennedy may vote against EPA for two reasons. The first (and perhaps somewhat less serious) is based on the pseudo-science of counting the words a justice says during an argument. Political scientists have demonstrated that parties tend to lose when they are asked more questions, and that the amount a justice speaks during the argument provides insights into that justice’s inclinations. If that theory holds true, EPA is in trouble. Justice Kennedy spoke only twice during the argument presented for the industry challengers, uttering about 110 words, and he remained entirely silent during the presentation by the Texas Attorney General on behalf of the state challengers. In contrast, Justice Kennedy spoke seven times during Solicitor General Donald Verrilli’s argument on behalf of EPA, uttering approximately 180 words. Of course, the general trend that the number of words spoken by the Justices relates to a party’s likelihood of success doesn’t always play out in individual cases. 
     
    My second reason for believing that the Supreme Court may rule against EPA is a more specific to this case. Justice Kennedy’s questions appear to express skepticism about EPA’s position.  At one point Justice Kennedy said to the Solicitor General: “I couldn’t find a single precedent that strongly supports your position. . . . [W]hat are the cases you want me to cite if I write the opinion to sustain your position?” Justice Kennedy also appeared to want assurance that an EPA loss would not be too significant an event, asking the Solicitor General: “Just to be clear, you’re not saying . . . that if you’re denied the authority you seek here, there can be no significant regulation of greenhouse gases under the Act?” Soon thereafter, perhaps sensing the mood among the Justices, Justice Sotomayor followed up, asking “If you were going to lose. . .” (The Solicitor General interrupted before the question finished, saying “I knew you were going to ask me that question.”).
     
  • February 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 U.S. Supreme Court will hear argument today in a case addressing EPA’s application of the Clean Air Act to greenhouse gases (“GHGs”). This will mark the third time the Court has dealt with a case related to climate change. Like its predecessors, this case has generated lots of attention, both from regulated parties and the media.

    Despite the attention, one of the most significant features of the case is, perhaps surprisingly, what is not at stake. This case had the potential to call into question the foundations of the Obama Administration’s efforts to address climate change. Before the D.C. Circuit, industry groups and a coalition of states opposed to federal regulation of GHGs, challenged an array of EPA regulatory decisions. These challengers sought to overturn: (1) EPA’s determination that GHGs endanger public health and welfare; (2) EPA’s further determination that GHGs from cars and trucks contribute to the danger; (3) EPA’s regulation of tailpipe emissions of GHGs from cars and trucks; (4) EPA’s reaffirmation of its long-held view that once an air pollutant is regulated, new and modified major stationary sources of that pollutant are regulated under the Prevention of Significant Deterioration Program (“PSD”); and (5) EPA’s decision to phase-in the applicability of PSD and exempt, at least in the short-term, sources that would plainly be covered by the statutory text. The D.C. Circuit ruled in favor of EPA on all counts, and the challengers sought Supreme Court review of all of those issues and also asked the Court to overrule its earlier decision in Massachusetts v. EPA, which held that GHGs are an air pollutant. The Court declined the vast majority of that invitation, deciding instead to consider only the fourth issue described above, whether EPA properly interpreted the statute to automatically trigger regulation under PSD once a pollutant is otherwise regulated.

    The limited grant is important for a couple of reasons. It suggests that the Court has little appetite to revisit the question of whether GHGs are air pollutants. It further indicates that the Court is willing to leave undisturbed, at least for the time being, EPA’s decision that GHGs endanger public health and welfare. Those two determinations underlie virtually any regulatory action under the Clean Air Act, and the Court’s denial of certiorari on those points leaves the agency in a strong position to continue regulating GHGs. Practically speaking, the limited grant means that any decision will have little consequence beyond the PSD Program itself, and that program was never likely to be the centerpiece of an EPA climate strategy under the Clean Air Act. 

    Nonetheless, the Supreme Court’s decision in this case will likely be invested with significant symbolic import. Some conservative commentators, legislators, and advocacy groups have repeatedly accused the Obama Administration of overreaching when it comes to addressing climate change, and a victory for the challengers will fuel that criticism. Progressive and liberal commentators, legislators, and advocacy groups have taken the opposite position and argued that the Administration has ample existing authority to tackle one of the biggest public policy challenges of our time. A victory for EPA will be heralded in those circles as a vindication for the broader climate strategy.