2022 United States Supreme Court case
West Virginia v. Environmental Protection Agency, 597 U.S. 697 (2022), is a landmark decision of the U.S. Supreme Court relating to the Clean Air Act, and the extent to which the Environmental Protection Agency (EPA) can regulate carbon dioxide emissions related to climate change.
The case centers on the Clean Power Plan (CPP) proposed by the EPA in 2015 under the Obama administration. Among the provisions, the CPP had included regulation at existing power plants under Section 7411(d) of Title 42 of the United States Code to implement "within the fence line" emissions reduction technology and "outside the fence line" generation shifting to alternative clean energy sources such as solar and wind power. The generation shifting aspects of the CPP were challenged by several states and coal industry companies, and the CPP was stayed by the courts and never came into enforcement. The Trump administration's EPA put forth a less-aggressive Affordable Clean Power rule in 2019 which was similar and stayed by courts. The stay was challenged by multiple states and coal industry companies, seeking to question the EPA's ability to regulate existing power plants under 7411(d) as proposed in the CPP. The case was not rendered moot when the Biden administration took over in 2021, as the EPA under the Biden administration stated their inclination to include "outside the fence line" controls, making the case still relevant to the authority the EPA had in interpreting their Congressional charter.
In a 6–3 ruling issued on June 30, 2022, the Court ruled that the regulation of existing power plants in Section 7411(d) fell under the major questions doctrine, and within that, Congress did not grant the EPA authority to regulate emissions from existing plants based on generation shifting mechanisms, which would have invalidated the Clean Power Plan. The EPA may still continue to regulate emissions at existing plants through emissions reduction technologies.
Background.
Clean Air Act.
As part of the amended Clean Air Act (CAA), under § 7411(d) (or Section 111 in the proposed bill), Congress granted the Environmental Protection Agency (EPA) authority to identify the "best system of emission reduction" from power generating plants or other large stationary sources, and work with states to complete implementation plans to incorporate those systems. This authority was split between two regulations, one covering emissions controls for new plants, outlined at § 7411(b), and another controlling emissions at existing plants, at § 7411(d). Within the scope of § 7411(d), while the EPA itself cannot set taxes or fines on plants that fail to meet emission standards, it can work with states in their implementation plans to force generating plants to install emissions control technology or to participate in emissions trading programs, or allow states to implement their own taxes on violating plants. Compared to the EPA's use of § 7411(b) in overseeing new plants, the EPA had rarely evoked § 7411(d) in any of its rule-making, and thus § 7411(d) realized less legal scrutiny compared to other parts of the Clean Air Act.
Prior EPA litigation.
One key piece of litigation related to the Clean Air Act was the 2007 Supreme Court case "Massachusetts v. EPA", which in a 5–4 decision, had found that the EPA was mandated by Congress to regulate greenhouse gas emissions and can be sued for failing to enact rules to this end under the Clean Air Act. "Massachusetts v. EPA" was considered one of the most significant cases in environmental litigation, as it allowed for a range of further lawsuits aimed to force emission-producing entities to limit their emissions.
Another relevant piece of litigation was the 2015 Supreme Court case "Michigan v. EPA", which in a 5–4 decision held that the EPA must consider costs and that it interpreted the Clean Air Act unreasonably when it determined that it did not need to consider costs when it issued a "finding" that it was "necessary and appropriate" to regulate fossil fuel power plants. "Michigan v. EPA" was considered a controversial case in environmental litigation as it was criticized for minimizing health impacts and signalling a retreat of the Chevron deference, in which the interpretation of congressional legislation made by executive agencies is given deference in judicial court established in "Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.", in administrative law.
Procedural history.
Clean Power Plan.
In June 2014, the United States Environmental Protection Agency (EPA) proposed The Clean Power Plan (CPP) as an Obama administration rule. The rules aimed to tackle climate change by requiring reductions of carbon dioxide emissions from electricity generation by 32% of recorded 2005 levels by 2030, with the implementation to be set by the states, under the authority granted by the Clean Air Act, § 7411(d). States would have been required to submit implementation plans by 2018 with enforcement to start by 2022. States could require existing plants to implement efficiency improvements, emissions controls, or incorporate renewable energy generation; under these rules, existing plants adding these elements could then be subject to a New Source Review by the EPA under § 7411(b), thus assuring older plants then were brought up to standards expected of new power plants. This was part of the United States' commitment towards the Paris Agreement, using amendments introduced in 1990 to the Clean Air Act that identified carbon dioxide as a pollutant. Although the CPP did not go into effect, its goals were met in 2019 due to energy efficiency, construction of wind and solar power, and energy market prices resulting in shifting of generation from coal to gas.
In August 2015, opponents of the CPP, which included 28 states and hundreds of companies, challenged the EPA's authority in its rulemaking of the CPP, filing suit in the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) after the rules were published in the Federal Register. Their suit challenged the CPP primarily on three factors. The first related to an oversight during the reconciliation of the Clean Air Act amendment in 1990 which resulted in the House and Senate versions of § 7411(d) to never be reconciled, and both versions were codified into the signed law. The House version had stated that because other parts of the Clean Air Act had covered regulation of carbon dioxide, the EPA could not use § 7411(d) to cover carbon dioxide emissions from existing plants, while the Senate version allowed for § 7411(d) to overlap carbon dioxide emissions coverage. The EPA inferred that they had judicial deference to interpret the law, following the 2015 Supreme Court decision in "King v. Burwell", and used the Senate's language to develop the CPP, while opponents believed that the House version was the intended language consistent with other parts of the law.
A second factor raised by opponents of the CPP was that the EPA's rule reached beyond their normal authority by giving states authority to regulate power plants across the board rather than at an individual plant level. Opponents believed that while the EPA or states could have plants take actions like implementing emissions controls as those were within bounds of the plant's control or "within the fenceline", the rules related to efficiency improvements and renewables were considered to be "outside the fenceline". The third factor was related to Tenth Amendment arguments that the EPA was inappropriately delegating federal authority to the states.
In January 2016, the D.C. Circuit agreed to hear the case, though they did not grant a temporary injunction to stay enforcement of the CPP. In February 2016, the Supreme Court ordered a stay in the implementation of the CPP. While the order was unsigned, Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan stated they would have denied the request. The D.C. Circuit held an "en banc" hearing in September 2016.
After the 2016 presidential election and the installation of the Trump administration at the start of 2017, the EPA effectively stated its intent to repeal the Clean Power Plan by March 2017 and to replace it with a new rule that was intended to keep its authority "within the fenceline", and asked the D.C. District to put the case in abeyance. In April 2017, the D.C. District court granted the abeyance request and granted continued extensions through the year. In October 2017, the EPA formally issued its initial ruling to repeal the CPP, and continued to request the D.C. Circuit to hold the case in abeyance until the rulemaking was finalized. Proponents of the CPP urged the District court to press ahead with ruling from the September 2016, since any delay would allow the EPA to avoid its duty to uphold the Clean Air Act. While the D.C. Circuit did continue to grant additional periods of abeyance through June 2018, the court stated that month that it would no longer grant any further requests to delay the case, requiring the EPA to issue its final rule repealing the CPP and introducing a replacement rule, or to allow the court to continue its review.
Affordable Clean Energy rule.
With the D.C. Circuit court refusal to grant further abeyance delays, the EPA issued a new proposed set of emissions regulations, the Affordable Clean Energy (ACE) rule, in August 2018. These repealed the CPP, with the EPA arguing these were developed on a misplaced use of statutory interpretation of § 7411(d). The ACE rules were developed based the EPA's responsibility established in "Massachusetts v. EPA", but only setting minimal safeguards and requirements for such reductions, targeting only a reduction of between 0.7% and 1.5% of carbon dioxide emissions from 2005 levels by 2030, compared to the 32% set by the CPP. Further, ACE kept the EPA's regulations to only steps "within the fenceline" of a power plant through emissions controls and lacked any allowance towards efficiency improvements or renewable sources. While power plants that implemented emissions controls would still be subject to a New Sources Review, the ACE rule also aimed to weaken the requirements of this review to make it less rigorous and more likely for older plants to pass without having to upgrade their facilities. EPA analysis estimated this rule would increase particulate pollution compared to what was proposed under CPP, potentially leading to 1,500–3,600 more premature deaths per year by 2030 and up to 15,000 more new cases of upper respiratory problems, among other human health impacts. The EPA argued that these initial rules were based on a limited interpretation of § 7411(d), and that other aspects of the Clean Air Act can be used to address other pollutants to reduce these numbers. With the release of the ACE rule and intent to repeal to the CPP, the D.C. Circuit dismissed the case over the CPP as moot, which subsequently ended the stay on the CPP issued by the Supreme Court.
The new rules were seen as a boon to the states and companies that had opposed the CPP, particularly by President Donald Trump who saw it as a means to support the coal industry, but several other states and public health groups criticized the new rules, putting profits of the fossil fuel sector over public health. Opponents also argued that the 32% reduction target in the CPP had already been met by the time the new ACE was introduced, so the ACE represented a reversal of those gains in reducing emissions. After the final rule was published in June 2019, the American Lung Association and the American Public Health Association filed suit in the D.C. Circuit court to challenge the rule in July 2019. The plaintiffs were joined by over 170 other groups, including twenty three states, several cities, and other public health groups over time. The suit argued that through the ACE rule, the EPA was failing to meet its duty to reduce emissions and improve public health under the Clean Air Act, as well as preventing states from using other long-standing measures such as emissions trading as part of their implementation plans. Oral hearings were heard in October 2020.
The D.C. Circuit ruled 2–1 on January 19, 2021, by happenstance the day before the inauguration of Joe Biden as the next U.S. president, in favor of the plaintiffs, vacating the ACE and its repeal of the CPP. The majority opinion ruled that the EPA's ACE rulemaking was made in an arbitrary and capricious manner intended "to slow the process for reduction of emissions", and that its implementation "hinged on a fundamental misconstruction" of the Clean Air Act's § 7411(d). Because