Supreme Court Refuses to Stay Biden EPA Power Plant Rule

Some were surprised by the Supreme Court's action, but they should not have been.

This past spring, in Ohio v. EPA, a 5-4 Supreme Court stayed the implementation of an Environmental Protection Agency rule governing interstate air pollution pending legal proceedings challenging the rule on the merits. This decision was unusual, but not without precedent. Back in 2016 the Supreme Court had also stayed the Obama Administration's Clean Power Plan--also by a 5-4 vote.

The Court's apparent willingness to press pause on major air pollution regulations, combined with an overall increase to consider aggressive "shadow docket" filings, encouraged industrial groups and conservative states to file multiple applications for stays of other EPA rules. After all, if the Court did it twice, it could do it again. None of these recent applications have been successful however.

At the Court's long conference, the justices denied multiple applications seeking stays of EPA rules governing hazardous air pollutants and methane emissions. Then, yesterday (in a more closely watched case), the Court rejected applications seeking a stay of the Biden Adminsitration's rules limiting greenhouse gas emissions from power plants (basically the Biden Administration's replacement for the CPP). Only Justice Thomas dissented. (Justice Alito did not participate.) [See also Sam Bray's post on the application denial.]

Some seem surprised by the Court's actions, but I don't think they should be. The reasons for granting stays of the CPP and interstate air pollution rule were not present in these other cases.

The stay of the CPP was somewhat unusual, but it also presented the Court with an unusual dilemma (as I noted at the time). The Court had recently decided Michigan v. EPA, in which the justices concluded that EPA regulations governing mercury emissions from power plants were arbitrary and capricious. The EPA did not care much about this ruling, however, and trumpeted that fact. After the decision, EPA put out a press release saying (correctly) that nearly all of the regulated utilities had already made the required capital investments while the litigation was pending because there was no way to comply with the deadlines otherwise. Those who sought to stay the CPP highlighted this, basically telling the Court the EPA was celebrating its ability to impose regulations without complying with the law. That the EPA also declared that the CPP represented a pathbreaking and unusually aggressive assertion of agency authority was only icing on the cake.

While the interestate air pollution rule did not present the same sort of major question as the CPP, it was another instance in which the petitioners--and utilities in particular--could plausibly claim that they would have no choice but to make substantial and irreversible capital investments to comply with the rule while judicial review was ongoing. Thus, they could claim some degree of irreparable harm (and more harm than routine compliance costs; on this point, see Sam Bray's excellent post below).

The more recent stay applicaitons tried to present the rules in question as presenting the same sorts of issues, but they were unsuccessful at doing so. These other rules are not as broad or aggressive as the CPP, and do not present the same sort of risk of irreparable harm, in part because the EPA has been more attentive to providing compliance deadlines that accommodate some amount of judicial review. In the case of the most recent power plant rules, it is also notable that the U.S. Court of Appeals for the D.C. Circuit, in its order denying the stay, took the time to explain its decision while also expediting the petitioners' legal challenges so that regulated entities would not be forced to make major compliance expenditures before the litigation could proceed.

Justice Kavanaugh (joined by Justice Gorsuch) made note of some of this in a brief opinion respecting the denial of the applications.

In my view, the applicants have shown a strong likelihood of success on the merits as to at least some of their challenges to the Environmental Protection Agency's rule. But because the applicants need not start compliance work until June 2025, they are unlikely to suffer irreparable harm before the Court of Appeals for the D. C. Circuit decides the merits. So this Court understandably denies the stay applications for now. Given that the D. C. Circuit is proceeding with dispatch, it should resolve the case in its current term. After the D. C. Circuit decides the case, the nonprevailing parties could, if circumstances warrant, seek appropriate relief in this Court pending this Court's disposition of any petition for certiorari, and if certiorari is granted, the ultimate disposition of the case.

Going forward, what I think this means is that the Court is settling on a reasonable standard for evaluating stay requests for major regulations. As a general matter, particularly if the EPA sets reasonable compliance deadlines, such stays should be denied. But where we have some combination of a particularly aggressive assertion of agency authority (again, think "major question") and a compliance schedule that will prematurely force regulated entities to make substantial capital investments (perhaps, particularly, if those regulated entities are rate-regulated utilities, which operate under greater constraints), a stay is more likely. This also means that regulatory agencies and the D.C. Circuit can make stays less likely by taking care to consider such factors themselves.

This is all a long way of saying that the justices are willing to offer extraordinary relief in extraordinary cases, but that it is far from open season on major environmental rules.