Supreme Court

Supreme Court Agrees to Hear Case Challenging EPA Authority to Regulate Greenhouse Gases (Updated)

A surprising grant of certiorari places a high-stakes regulatory case on the Court's docket, with profound implications for EPA authority to regulate greenhouse gases.

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Today the Supreme Court granted multiple petitions for certiorari seeking review of an opinion from the U.S. Court of Appeals for the D.C. Circuit concluding the Environmental Protection Agency has broad authority to regulate greenhouse gas emissions from power plants under the Clean Air Act. The grants are somewhat surprising because the EPA is not currently defending or seeking to enforce any such regulations, but suggest the Court is interested in clarifying the overall scope of the EPA's regulatory authority, while potentially resolving some questions about agency authority more broadly at the same time. (I previously blogged on the petitions, and suggested they would not be granted. Oops.)

The petitions all sought review of the D.C. Circuit's opinion invalidating the Trump Administration's repeal of the Obama Administration's Clean Power Plan (CPP) and adoption of the Affordable Clean Energy (ACE). In its decision, a divided panel of the D.C. Circuit concluded the EPA had far more regulatory authority than the Trump Administration admitted, and that the rescission of the CPP was arbitrary and capricious. Nonetheless, the D.C. Circuit panel did not require the EPA to readopt the CPP, and the Biden Administration has indicated it will start over from scratch and draft new regulations.

Although the Biden Administration has not yet proposed regulations of its own, the grant is bad news for them because a) the EPA will not know the scope of its regulatory authority here until the spring, and b) whatever authority remains will almost undoubtedly be less than what the EPA would like. It is unlikely the Court would have granted certiorari unless at least four justices were sufficiently concerned with the D.C. Circuit's expansive interpretation of the EPA's regulatory authority that they saw the need to intervene now. In this sense, by giving the Biden EPA all the regulatory authority it could have hoped for, the D.C. Circuit might have given the justices an inviting target. The fact of the grant is also further support for my argument that regulatory strategies for controlling greenhouse gas emissions are more vulnerable and brittle than alternatives, such as the adoption of a carbon tax.

This case could be tremendously significant beyond the question of the EPA's regulation of greenhouse gases because (as detailed below) the questions presented encompass both the immediate question of what authority the EPA has under Section 7411 of the Clean Air Act, but also the broader question of how prescriptive Congress must be when delegating broad regulatory authority to federal agencies. This gives the Court room to refine and expand the "major questions" doctrine (as I have suggested it might want to do), as well as to perhaps identify some of the outer limits on delegation more generally.

Here is a quick rundown of the petitions accepted and the questions they present.

West Virginia v. EPA

In 42 U.S.C. § 7411(d), an ancillary provision of the Clean Air Act, did Congress constitutionally authorize the Environmental Protection Agency to issue significant rules—including those capable of reshaping the nation's electricity grids and unilaterally decarbonizing virtually any sector of the economy—without any limits on what the agency can require so long as it considers cost, nonair impacts, and energy requirements?

North American Coal Corp. v. EPA

Whether 42 U.S.C. § 7411(d), which authorizes the EPA to impose standards "for any existing source" based on limits "achievable through the application of the best system of emission reduction" that has been "adequately demonstrated," grants the EPA authority not only to impose standards based on technology and methods that can be applied at and achieved by that existing source, but also allows the agency to develop industry-wide systems like cap-and-trade regimes.

Westmoreland Mining Holdings LLC v. EPA (corrected)

Whether 42 U.S.C. § 7411(d) clearly authorizes EPA to decide such matters of vast economic and political significance as whether and how to restructure the nation's energy system.

[The Court did not grant certiorari on a second question presented in this petition.]

North Dakota v. EPA

Can EPA promulgate regulations for existing stationary sources that require States to apply binding nationwide "performance standards" at a generation-sector-wide level, instead of at the individual source level, and can those regulations deprive States of all implementation and decision making power in creating their Section 111(d) plans?

Given the range and wording of the questions presented, the Court will have the ability to address the scope of EPA's authority in a narrow, technical way (relying on the Clean Air Act's text) or in a broad way, focusing on whether and how Congress may delegate broad regulatory authority to federal agencies, or somewhere in-between. Whichever way the Court goes, this will undoubtedly be the most important environmental law case on the Court's docket this term, and could well become one of the most significant environmental law cases of all time.

NOTE: The Court inadvertently identified the wrong question presented for which certiorari was accepted in the Westmoreland Mining petition. The Court has corrected and reissued the order, and I've updated this post accordingly.