Supreme Court puts the brakes on the EPA's Clean Power Plan

Tuesday evening, the U.S. Supreme Court granted a stay, halting implementation of the Environmental Protection Agency's Clean Power Plan pending the resolution of legal challenges to the program in court. The CPP is arguably the Obama administration's signature environmental initiative, representing the EPA's most ambitious effort to control greenhouse gas emissions under the Clean Air Act. Five separate stay applications were filed by more than two dozen states and numerous industry groups. Other states, environmental groups and some energy companies opposed the stay.

The order reads as follows:

The application for a stay submitted to The Chief Justice and by him referred to the Court is granted. The Environmental Protection Agency's "Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units," 80 Fed. Reg. 64,662 (October 23, 2015), is stayed pending disposition of the applicants' petitions for review in the United States Court of Appeals for the District of Columbia Circuit and disposition of the applicants' petition for a writ of certiorari, if such writ is sought. If a writ of certiorari is sought and the Court denies the petition, this order shall terminate automatically. If the Court grants the petition for a writ of certiorari, this order shall terminate when the Court enters its judgment.

Justice Ginsburg, Justice Breyer, Justice Sotomayor, and Justice Kagan would deny the application.

The Supreme Court's decision comes as a surprise, as it is unusual for the high court to block federal regulations, particularly where (as here) the D.C. Circuit had denied a similar request. What could explain the move? One possibility, suggested by Michael Greve, is that the court was concerned about a replay of Michigan v. EPA, in which the court invalidated another EPA rule to little practical effect. As Greve noted, this point was stressed in the opening of the stay application submitted by 29 states and state agencies seeking a stay:

This Court's decision last Term in Michigan v. EPA, 135 S. Ct. 2699 (2015), starkly illustrates the need for a stay in this case. The day after this Court ruled in Michigan that EPA had violated the Clean Air Act ("CAA") in enacting its rule regulating fossil fuel-fired power plants under Section 112 of the CAA, 42 U.S.C. § 7412, EPA boasted in an official blog post that the Court's decision was effectively a nullity. Because the rule had not been stayed during the years of litigation, EPA assured its supporters that "the majority of power plants are already in compliance or well on their way to compliance." Then, in reliance on EPA's representation that most power plants had already fully complied, the D.C. Circuit responded to this Court's remand by declining to vacate the rule that this Court had declared unlawful. […] In short, EPA extracted "nearly $10 billion a year" in compliance from power plants before this Court could even review the rule […] and then successfully used that unlawfully-mandated compliance to keep the rule in place even after this Court declared that the agency had violated the law.

The decision also suggests that a majority of the court has concerns about the EPA's authority to impose the CPP under the Clean Air Act. The CPP, whatever its policy merits, is based on a fairly aggressive reading of the relevant provisions of the Clean Air Act, most notably Section 111. Even some liberal scholars, such as Harvard's Laurence Tribe, have raised questions about the EPA's authority here. (Tribe is also an attorney on one of the stay applications filed with the court.)

There are serious legal arguments against specific elements of the CPP (such as the consideration of potential emission reductions to be achieved "outside the fence" of regulated facilities) as well as the position that Section 111 of the CAA allows the EPA to regulate greenhouse gases from power plants in the first place. The latter concerns raise the stakes of the case and strengthen the argument for a stay. This is because the question at issue is not merely whether the EPA observed the relevant procedural niceties or properly exercised its authority on the margin. Rather, the question is whether the EPA has the authority to do this at all.

As a practical matter, this stay means that the EPA may not continue to take any actions to implement or enforce the CPP pending the resolution of the state and industry challenge to the rule. That challenge is currently before the U.S. Court of Appeals for the D.C. Circuit, which will hear oral arguments on June 2. In all likelihood, this means a D.C. Circuit decision will not be issued until early fall, at the earliest. Given all that's at stake, either en banc review on the D.C. Circuit or a petition for certiorari will follow.

For those interested, the Environmental Defense Fund has posted copies of the relevant case documents here.

UPDATE: Some additional thoughts. Looking back over the various stay applications (linked above), I suspect that the EPA's arguments against the stay were undermined by the Agency's own statements about the potentially revolutionary nature of the CPP. In promoting the plan, the EPA repeatedly emphasized that the CPP represented the most ambitious climate-related undertaking in the agency's history and crowed that the plan would lead to the complete restructuring of the energy sector. Making these claims may have undermined the EPA's position, because it made it easier for the stay applicants to argue that a stay was justified. Put another way, an unprecedented assertion of regulatory authority may itself have justified an unprecedented exercise of the Court's jurisdiction to stay the agency's action.

SECOND UPDATE: Here is the White House response to the stay.

THIRD UPDATE: I have a follow-up post that summarizes some of the legal and policy issues surrounding the CPP.