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Supreme Court sharply limits EPA power plant authority

Posted on 11 July 2022 by Guest Author

This is a re-post from Yale Climate Connections by Lexi Smith

The Supreme Court’s closely watched decision in West Virginia v. EPA held that the EPA exceeded its statutory authority in attempting to regulate greenhouse gases under the Clean Air Act through the Obama-era Clean Power Plan. The six conservative justices ruled against EPA, the three liberal justices dissented.

While the six conservatives framed the decision as the natural consequence of long-standing legal principles, the three liberals suggested that the majority departed from normal principles and precedents, upending settled doctrines without acknowledging that they were doing so. More on this below.

The decision, announced June 30, is sparking widespread backlash from environmentalists and supporters of federal agency authority fearful the Court’s reasoning will have ripple effects not only in the environmental area, but across numerous federal agencies.

What was the court majority’s reasoning to limit EPA’s authority?

As anticipated in earlier coverage, Chief Justice Roberts’ majority opinion focused on three main arguments: the major questions doctrine; the text of the Clean Air Act; and standing.

The ‘major questions’ doctrine

The major questions doctrine suggests that courts should presume that Congress wants to make the most important policy decisions itself, rather than delegating them to Executive branch agencies. In other words, Congress must clearly state if it wishes to delegate authority to an agency on an issue of major “economic and political significance.” Otherwise, the majority opinion holds, the courts will presume that such congressional authority was not delegated.

The Court turned to the major questions doctrine to assess whether the Obama administration’s Clean Power Plan exceeded the EPA’s statutory authority under the Clean Air Act. The majority suggested that Section 111(d) of the Clean Air Act, the provision on which the Clean Power Plan was based, did not clearly delegate authority to the EPA to shift energy generation. (The Court uses “shifting energy generation” to mean shifting away from the most greenhouse gas-intensive sources like coal and toward renewables).

Chief Justice Roberts characterized Section 111(d) as “ancillary” and a “backwater.” Roberts emphasized that the section had not been used to justify sweeping regulatory programs prior to the Clean Power Plan and should not be read to implicitly grant EPA broad authority to “balanc[e] the many vital considerations of national policy implicated in deciding how Americans will get their energy.” He concluded that the court should approach “assertions of extravagant statutory power over the national economy with skepticism.”

To show how broad the Clean Power Plan’s effect on the national economy would be, the majority looked to projections from when the plan was initially put forward, predicting compliance costs and resulting lost jobs. (These figures did not translate to real-world costs or job losses because the Clean Power Plan was never implemented, and market forces alone accomplished the plan’s emission reduction goals).

The majority also analogized this case to other recent decisions made on major questions doctrine grounds. The Court used the doctrine to strike down an eviction moratorium created by the Centers for Disease Control and Prevention during the pandemic, writing that “[w]e expect Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” Similarly, the Court struck down a workplace COVID vaccine mandate by the Occupational Health and Safety Administration on major questions grounds.

The text of the Clean Air Act

The majority spent less time on text of the actual statute than might be expected, given the conservative-leaning Justices’ proclaimed textualist philosophy of statutory interpretation. One of the main debates in the parties’ briefing and oral argument concerned the scope of EPA’s textual authority under Section 111(d) of the Clean Air Act: Did the statute authorize emission reduction programs that worked across different sources of pollution, such as the emissions trading system created by the Clean Power Plan; Or did it limit reduction programs to technological measures implemented at individual power plants?

In other words:

– Could EPA try to shift energy generation away from heavy polluters like coal plants?

– Or was EPA restricted to measures that cleaned up each individual plant without changing how much each plant was used?

The majority side-stepped this question. Chief Justice Roberts wrote that the court “had no occasion to decide whether the statutory phrase ‘system of emission reduction’ [in Section 111(d)] refers exclusively to measures that improve the pollution performance of individual sources.” Instead, the court asked more narrowly whether the “the ‘best system of emission reduction’ identified by EPA in the Clean Power Plan [namely generation shifting] was within the authority granted to the agency in Section 111(d) of the Clean Air Act.”

The Court concluded that it was not. The majority distinguished between the use of the word “system” in Section 111(d) versus other areas of the Clean Air Act that allow broader regulatory power, such as the cap-and-trade program used to reduce acid rain under the Clean Air Act.

The issue of standing

One of the major issues in the case involved whether West Virginia and the other challengers had standing to bring this suit to court in the first place. The court concluded that they did have standing.

In order to get into court, litigants must prove they have standing. Standing requires that litigants show they have been injured; that the person or institution they are suing caused the injury; and that the courts can redress the injury.

The parties in this case debated whether the challengers have standing because the Clean Power Plan is no longer in effect. The Trump administration had repealed it and then replaced it with the Alternative Clean Energy rule. That rule was struck down by the D.C. Circuit Court of Appeals. In short, no regulation currently is doing what the challengers oppose, namely using the relevant section of the Clean Air Act to regulate greenhouse gas emissions from power plants.

The challengers successfully argued that they had standing because when the Trump administration’s Alternative Clean Energy rule was struck down by the D.C. Circuit Court of Appeals, that court opened the door for the Obama administration’s Clean Power Plan to be reinstated, even if the Biden administration had not actually reinstated it or an alternative rule.

The Court also found that the case was not moot. Since the regulation of greenhouse gases under the relevant provision of the Clean Air Act could recur, the Court found the case to be justiciable, i.e., appropriate for judicial consideration.

How would Justices Gorsuch and Alito take the major questions doctrine further?

Justice Gorsuch, joined by Justice Alito, concurred with the majority but wrote separately to argue that the major questions doctrine embodies constitutional principles, not just principles of statutory interpretation. In his view, the major questions doctrine protects the constitutional principle that legislative power rests with Congress and not with the executive branch, meaning Congress cannot delegate authority too broadly to federal agencies.

Anticipating counterarguments that Congress lacks the time and the capacity to take over the federal agencies’ often highly technical regulatory work, he responded: “Admittedly, lawmaking under our Constitution can be difficult. But that is nothing particular to our time nor any accident. The framers believed that the power to make new laws regulating private conduct was a grave one that could, if not properly checked, pose a serious threat to individual liberty . . . By effectively requiring a broad consensus to pass legislation, the Constitution sought to ensure that any new laws would enjoy wide social acceptance, profit from input by an array of different perspectives during their consideration, and thanks to all this prove stable over time.” In other words, Justice Gorsuch views the gridlock of Congress not as an obstacle that requires gap-filling by federal agencies, but rather as a feature of our constitutional system that prevents government overreach.

If Justices Gorsuch and Alito’s views gain traction over time, we may see the revival of the nondelegation doctrine, which would make it unconstitutional for Congress to delegate broad authority to agencies. The majority opinion in this case merely held that Congress did not delegate authority to the EPA to shift energy generation away from fossil fuels. But if Justices Gorsuch and Alito’s views prevail in the long run, the court eventually could Congress cannot delegate such authority under constitutional principles.

How did the dissenters respond?

Justice Kagan’s dissent, joined by Justices Sotomayor and Breyer, opposed the majority’s decisions on the major questions doctrine (MQD), the text of the Clean Air Act, and standing.

With respect to the major questions doctrine, Kagan argued that the majority used the doctrine in a novel and unwarranted way. In past MQD cases, she argued, the Court simply used “common sense” with regard to agencies working outside their usual area of expertise and authority. But here, she argued, the EPA is operating clearly within its wheelhouse under the statutory design that Congress intended. Justice Kagan also expressed concern that the majority did not clearly define what constitutes a “major question,” meaning this ruling creates uncertainty for the future of federal regulation.

In discussing the text of the Clean Air Act, the dissent emphasized that a textualist approach to interpreting the phrase “best system of emission reduction” would focus on the definition of “system,” which encompasses almost any regulatory program aimed at reducing emissions, including cap-and-trade. Kagan accused the current court of being “textualist only when being so suits it. When that method would frustrate broader goals, special canons like the ‘major questions doctrine’ magically appear as get-out-of-text-free cards.”

Finally, the dissent vehemently disagreed with the majority about whether the challengers had standing. She called the majority’s ruling an “advisory opinion,” which is another way of saying it exceeded the court’s constitutional authority by ruling on a matter that was speculative rather than a concrete controversy. Past standing cases have repeatedly held that speculative harms are not sufficient to sustain a litigant’s case. She suggested that “this Court could not wait – even to see what the new rule says – to constrain EPA’s efforts to address climate change.”

Looking to the future of climate regulation

Perhaps most obviously, this decision sharply curtails EPA’s authority to regulate greenhouse gas emissions from power plants. While the opinion is technically limited to Section 111(d) of the Clean Air Act, the logic of the major questions doctrine may prevent EPA from using any of the major environmental statutes to promote energy generation shifting. Most of the nation’s environmental laws were passed before climate change was a widespread public concern. Any attempt to use those older laws to promote generation shifting may run into the same argument: That Congress in those laws did not clearly delegate the authority to create regulations of major “economic and political significance” in the energy sector in the face of climate change.

However, certain avenues remain open for environmental regulation. EPA still can implement restrictions at individual power plants. It still can use the Clean Air Act to limit greenhouse gas emissions from motor vehicles and oil and gas. And it can target other pollutants that directly harm human health and often co-occur with greenhouse gas emissions. State and local climate efforts will also become increasingly important tools. It’s important to acknowledge that most of those alternative approaches involve prospects of time-consuming rule-makings and of likely litigation.

On the legal side, the court’s ruling on standing may or may not unsettle long-standing principles regarding speculative harm. The ruling may open the door for anti-regulation advocates to challenge rules before they go into effect, so long as they are similar to defunct rules that the Court deems illegal. But the ruling might also be limited to the strange procedural elements of this case, in which the D.C. Circuit Court of Appeals in some sense reinstated the Clean Power Plan, and only the Executive branch’s voluntary decision to pursue a new rule prevented the plan from going back into effect.

Finally, it is worth noting how little the Court discussed two of its past decisions that are closely related to this case: Massachusetts v. EPA and American Electric Power v. Connecticut.

In Massachusetts v. EPA, the Supreme Court on 2007 had held 5-4 that EPA has authority to regulate greenhouse gases under the Clean Air Act. That power was not overturned in West Virginia v. EPA, given the other avenues still available discussed above. But it did sharply curtail the EPA’s authority.

 In American Electric Power v. Connecticut, the Court in 2011 heard a public nuisance challenge to greenhouse gas pollution. Public nuisances are acts, conditions, or conduct that interfere with the rights of the public generally. Connecticut’s nuisance claim rested on federal common law, a form of judge-made law. Judge-made law can be displaced by laws passed by Congress. The Supreme Court decided that because Congress had already granted EPA authority to regulate greenhouse gases under the Clean Air Act, Congress had displaced judge-made law in this area.

In West Virginia v. EPA, the Court did not overrule either precedent, but it is noteworthy that the majority and concurrence did not mention Massachusetts v. EPA at all. And Chief Justice Roberts mentioned American Electric Power v. Connecticut only briefly, distinguishing it from this case. He characterized American Electric Power as a decision that acknowledged that Section 111(d) displaced federal nuisance suits regarding climate change, but said that in that decision, “we said nothing about the ways in which Congress intended EPA to exercise its power under that provision.”

What does the court’s ruling mean for federal agencies writ large?

The expansion of the major questions doctrine in this case may have an impact across the federal government. If Justice Kagan is correct, this case is the first time the major questions doctrine has been used to stop an agency from taking action that was, she argued, clearly within its wheelhouse and authorized by statutory text. In effect, she fears the door has been opened for the court to limit any federal agency power not clearly and explicitly delegated on questions of major “economic and political significance.” Lots of agencies rely on older statutes to regulate modern problems, particularly in arenas that are fast-changing, like environment, health, public safety, finance, technology, and more. The court’s logic in this case could be used to curtail many of these regulations.

As Justice Kagan put it, “In all times, but ever more in our increasingly complex society, the legislature simply cannot do its job absent an ability to delegate power under broad general directives . . . First, Members of Congress often don’t know enough – and know they don’t know enough – to regulate sensibly on an issue . . . Second and relatedly, Members of Congress often can’t know enough – and again, know they can’t – to keep regulatory schemes working across time.” If the Court requires Congress to take on the work of modern regulatory agencies, she wrote, many key governmental functions will be affected.

Lexi Smith is a third-year student at Yale Law School. She studied environmental science and public policy as an undergraduate at Harvard, and she worked as an advisor to the Mayor of Boston on climate policy before enrolling in law school.

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Comments

Comments 1 to 12:

  1. Indeed, the conservative biased judges (some selected for appointment due to the efforts of people like Charles Koch - see "2022 SkS Weekly Climate Change & Global Warming News Roundup #27") do seem to have come to conclusions that do not bode well for the future of development of improvements that limit harm done in the USA (especially limiting damaging results of actions in the USA on Others, especially all the Others in the future impacted by un-limited ghg emissions).

    If this type of thinking had been applied decades ago, imagine all the important regulation of pursuits of profit, like Building Codes, having to have their details created and updated by Congress ...

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  2. Under the US constitution and the separation of powers, this decision was correct.  In the US, congress makes law, the executive branch executes the law.   At the time of passage of section 111 , would have taken a serious stretch of language to interpret congressional intent to treat CO2 as a pollutant.  

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  3. Part of the law - at least in Canada, and I'm pretty sure in the U.S. - is to delegate regulation to the executive branch.

    If Congress had to pass a new law for every act of regulation of a new chemical, nothing would ever get regulated.

    Some would probably think of that as a feature, not a bug, though.

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  4. To supplement Bob Loblaw’s response to David-acct’s claim made @2,

    I am pretty sure that Section 111 was passed after 1965.

    Check out the recent SkS reposting of Climate Adam’s “Climate Change: We Were Warned!”. The entire video should be watched. But the part starting at 3:10 in the video conveys the following fact: In 1965 prominent climate scientist Charles Keeling wrote a report to the President of the USA which included a Section titled “Carbon Dioxide from Fossil Fuels – The Invisible Pollutant”.

    So it appears that leaders in the USA since 1965 were aware that CO2 from fossil fuels was able to be considered to be a pollutant.

    But there is a more fundamental point in response to the claims made by David-acct @2. There are undeniably harmful consequences from the type of thinking exhibited in the SC majority decision. It is a decision that fundamentally ‘allows more liberty to be more harmful’ vs. ‘implementing understandable restrictions on harmful actions that the marketplace (of ideas and of commerce) fails to effectively limit’. Claiming that such a decision is the correct interpretation of the constitution appears to only be explained by one of the following:

    • The USA Constitution and its current set of Amendments is a fundamentally flawed guiding document for governing (limiting the harm done) by actions within the nation.
    • Interpretations of the Constitution and Amendments can be harmfully incorrect, and the Constitution is flawed because of wording that is open to such interpretations.
    • The abuse of the powerful science of misleading marketing can harmfully compromise even the Best Intentions.

    There do not appear to be any other common sense explanations. Which one is it? My suspicion is it is a combination of all 3.

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  5. Bob you comment indicates that you dont like the structure of the US Constitution and the separate powers to each of the three branchs of the US Government.  As previously discussed, Congress is the branch that enact laws, the actions of the executive branch are limited to the laws passed by congress.  Under the US Constitution, the executive branch can not enforce regulations or create "new law " not enacted by Congress.  Whether that is good or bad is a separate and unrelated issue.  

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  6. David-acct:

    The executive branch cannot enforce regulation? Then who does? The judicial branch? That only includes the judges and court systems, not the police, not the bulding inspectors, health inspectors, not the tax auditors, etc.

    In my definition of "executive branch", I am including pretty much all the government departments, all the government employees that work in them, etc. And yes, they act as a consequence of the duties assigned to them through legiislation. But legislation includes assigning responsibilities to monitor and assure compliance with the laws that are passed, adjust regulations, and charge people that break those laws.

    In what you appear to be claiming, the legislative branch would have to approve each indivudal speed limit on each individual road, instead of giving the executive branch the power to assess appropriate speed limits, set them, and pursue offenders.

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  7. Or are you using the phrase "enforce regulation" to mean "create it"?

    Regulations passed by the legislative branch can and will be written to provide flexibilityto the executive branch, as in my speed limit example. The executive branch could be assigned the task of improving highway and road safety, and the flexibility to choose to do this via speed limits, traffic controls, driving test requirements, etc. The legislative branch does not need to pass a law stating every individual aspect of what is allowed on any individual road.

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  8. Bob Loblaw @6 and David-acct @5  :

    [Opinion]  The concept of the Separation of Powers was "cutting edge" political thinking in the 1600's and 1700's.   The famed American Constitution was a great achievement for its time.   But, with the wisdom of hindsight, there is much room for criticism & improvement ~ only part of which has been "fixed" by Constitutional Amendments.

    Analogy : the famed first airplane - the Kittyhawk biplane - was a great achievment.  Cutting edge.  Two pairs of wings, and a control lever system.   [Stretching the analogy . . . the Congress, the Executive, and the SCOTUS.]    Subsequent developments included the triplane with three pairs of wings.  [The third pair corresponding to the States Legislatures?]

    By analogy again : Adam Smith's economics theory (largely laissez-faire) was well-suited to the village economies of the 1700's and prior times.   Unfortunately, the subsequent growth of city populations and of new technologies & communications , has led to a complex society which requires complex control systems (just as an elephant's body requires more complex systems than does a simple earthworm).

    The point I am coming to, is that nowadays there is much overlap in the functions of Congress, Executive, and SCOTUS.   In practical terms, we cannot regard them as fully separate.   We engage in faulty thinking if we believe complete separation is possible ~ we are guilty of a False Dichotomy (Tri-chotomy?).   We waste our time if we see Separation as being some form of Holy Writ which must never be questioned or examined or modified.   The Constitutional Founding Fathers dealt with the problems facing them, and made a remarkable experimental creation.   How could they have foreseen the problems of future vast developments?  (including the current gridlocked paralysis of Congress/Executive . . . failing to deal intelligently with problems.)

    To boil it down : please put aside doctrinaire thinking, and look at the realites.  The reality is that all "wings" and control levers are influenced/manipulated by powerful individuals & groups  ~ and we live in a plutocracy only slightly mollified by the democratic citizenry.   Twas ever thus, throughout history.  Nevertheless, we must do better.

    And on the airplane analogy : there are still a lot of Fokkers** who still favor a triplane design.   ** a Red Baron reference, of course  ;-)

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  9. If you read the blog post, the disagreement between the majority and minority views within SCOTUS rest on the question of what sort of decisions need explicit legislative expression, and what can be delegated to the agency to decide on its own. ("Major questions doctrine").

    Two quotes in the post, from the dissenting side, that strike me are:

    Justice Kagan also expressed concern that the majority did not clearly define what constitutes a “major question,” meaning this ruling creates uncertainty for the future of federal regulation.

    and

    Kagan accused the current court of being “textualist only when being so suits it. When that method would frustrate broader goals, special canons like the ‘major questions doctrine’ magically appear as get-out-of-text-free cards.”

    This strikes me as letting politics overshadow law (on the majority opinion side). Not a good sign, IMHO.

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  10. David-acct: " the executive branch can not enforce regulations"

    US government official source: "The executive branch carries out and enforces laws."

    I know who I'm going to believe on this one...

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  11. Each side acts behind a veil of words.

    In the end, it comes to power politics : who-can-get-away-with-what.

    And we ourselves can choose to be a bystander or a participant.

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  12. Phillippe:

    As I mentioned above, it may be that David-acct meant "enforce" in the sense of creating, but he will have to explain what he meant.

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