Footnote 7 and the Clean Power Plan

September 27, 2016

In February, the Supreme Court of the United States stayed implementation of the Clean Power Plan, which provides the EPA with its best chance to cut future greenhouse gas emissions. On Tuesday, Sept. 27, the United State Court of Appeals for the District of Columbia Circuit will hear oral arguments in a consolidated case, known as West Virginia, et. al. v. EPA. This case will determine whether it is within the EPA’s power to regulate air quality by setting strict standards for carbon emission. ACS invited experts to explore the issues that will be presented before the Court.

by Richard L. Revesz,  Dean Emeritus, Lawrence King Professor of Law and Director of the Institute for Policy Integrity at New York University School of Law; Denise A. Grab, Senior Attorney at the Institute for Policy Integrity at New York University School of Law and Jack Lienke, Senior Attorney at the Institute for Policy Integrity at New York University School of Law

It may not have yet reached the level of fame of Carolene Products’s Footnote 4, but among the lawyers immersed in the Clean Power Plan, Footnote 7 in American Electric Power v. Connecticut has become something of a household name.

In AEP v. Connecticut, the Supreme Court held that EPA’s authority to address greenhouse gases under the Clean Air Act—and section 111(d) in particular—displaces federal common law public nuisance claims against power plants. Footnote 7 is dicta that describes the limited circumstances under which section 111(d) does not apply.

Four years after the decision in AEP, EPA used section 111(d) to issue the Clean Power Plan. Interestingly, both supporters and opponents of the Plan now argue that Footnote 7 supports their position. The dispute here boils down to an argument over whether the scope of section 111(d)’s coverage focuses on the particular pollutants being regulated or the source category as a whole (in this case, power plants).

This source category vs. pollutant distinction matters to the Clean Power Plan because, while EPA has never before regulated carbon dioxide emissions from existing power plants, it has regulated mercury and other toxic emissions from such plants, under section 112. Thus, if section 111(d) cannot be used to regulate previously regulated source categories, the Clean Power Plan would be invalid. 

What does Footnote 7 have to say about this? It reads as follows:

There is an exception: EPA may not employ § 7411(d) if existing stationary sources of the pollutant in question are regulated under the national ambient air quality standard program, §§ 7408-7410, or the "hazardous air pollutants" program, § 7412. See § 7411(d)(1). [emphasis added]

The footnote discusses two categories of other regulations that may prevent EPA from promulgating a section 111(d) rule: the National Ambient Air Quality Standards (NAAQS) program under sections 108-110 and the section 112 hazardous air pollutant program. No one has argued that regulation under the NAAQS program precludes section 111(d) rules, even though power plants have had their NAAQS pollutants regulated for decades. In contrast, Petitioners think that the section 112 program should operate in a different way, precluding section 111(d) regulation if power plants are regulated at all, even for entirely different pollutants.

Footnote 7 does not support Petitioners’ reading. The footnote treats the NAAQS and section 112 programs in the same way with respect to their impact on section 111(d). For both programs, the applicability of section 111(d) is tied to whether the pollutant in question (here, carbon dioxide) is regulated under that program.

Petitioners would prefer to ignore Footnote 7’s parallelism between the NAAQS program and the section 112 program, focusing instead on the “existing stationary source” language.  But their argument overlooks one key piece of evidence, which has not been the focus of the discussions so far and which answers any lingering questions about what Footnote 7 really means.

This key evidence involves the timeline of the AEP case relative to the timing of EPA’s promulgation of the section 112 rule that caused the alleged conflict.

On March 16, 2011, EPA proposed a section 112 rule targeting hazardous air pollutants, most notably mercury, from power plants. The proposed rule was then published in the Federal Register a few weeks later on May 3.

Oral arguments in the AEP case took place on April 19, 2011, a full month after EPA released its proposed section 112 rule—the rule that Petitioners now argue precludes the promulgation of the Clean Power Plan under section 111(d). Peter Keisler, who is representing Petitioners in the Clean Power Plan litigation, also represented the coal power plant petitioners in the AEP Supreme Court argument. Even though the section 112 rule for power plants had already been released, Petitioners’ counsel argued before the AEP Court that EPA could still regulate the greenhouse gas emissions of existing power plants under section 111.

We believe that the EPA can consider, as it’s undertaking to do, regulating existing nonmodified sources under section 111 of the Clean Air Act, and that’s the process that’s engaged in now. It’s announced that it will propose standards in the summer and complete a rulemaking by May. Obviously, at the close of that process there could be [Administrative Procedure Act] challenges on a variety of grounds, but we do believe that they have the authority to consider standards under section 111. (Attorney Peter Keisler, from transcript of oral argument in American Electric Power v. Connecticut, 564 U.S. 410 (2011) (No. 10-174), page 15-16, emphasis added)

The AEP Court relied on these representations in describing EPA’s regulatory options under section 111, including the scope of coverage discussion in Footnote 7. Petitioners’ counsel must have known about the proposed section 112 rule given his clients’ membership in trade associations that were already actively involved in opposing it. Moreover, Petitioners’ counsel referred in oral argument to EPA’s plans to propose its section 111(d) rule for greenhouse gases from power plants, which was at an even earlier stage of development. Keisler thus did not consider the proposed section 112 rule to be a bar to regulation of greenhouse gases from power plants under section 111(d). Since the Court relied on Keisler’s representation when writing the AEP decision, it implicitly accepted this view.

Properly understood in light of the relevant regulatory history, Footnote 7 stands for the proposition that the regulation under section 112 of the hazardous pollutants emitted by power plants does not bar the regulation of different pollutants, like carbon dioxide, under section 111(d).

Footnote 7 does not need to do all the work here. To make their argument that section 112 bars the Clean Power Plan, its opponents have to engage in interpretive gymnastics that are not persuasive as a matter of statutory interpretation or logic and are inconsistent with the interpretation that EPA has given to those statutory provisions over several decades under administrations of both political parties.  

Interpreting Footnote 7 correctly further weakens the opponents’ already strained argument. Even though Footnote 7 is just a footnote, reading it properly will help secure the future of a rule that is projected, each year, to save thousands of lives and secure billions of dollars in climate and public health benefits.