The following contribution to our greenhouse gas cases symposium comes from Robert Percival, the Robert F. Stanton Professor of Law and Director of the Environmental Law Program at the University of Maryland Francis King Carey School of Law.
For the third time in seven years the issue of greenhouse gas regulation returns this Term to the Supreme Court. Seven years ago in Massachusetts v. EPA, the Court declared that greenhouse gases (GHGs) were air pollutants that could be regulated under the Clean Air Act (CAA). Three years ago in American Electric Power v. Connecticut the Court unanimously held that the CAA displaced the federal common law of nuisance because it delegates to the EPA authority to regulate GHG emissions from power plants.
After the Obama administration’s push for legislation to create a national cap-and-trade program failed, the EPA used the CAA to regulate GHG emissions from motor vehicles and large stationary sources. This triggered the mother of all legal battles in the D.C. Circuit, which culminated in that court rejecting all challenges to the EPA’s actions. But those who anticipated an epic environmental battle in the Supreme Court had their hopes dashed when the Court granted cert. on a single, narrow question. Thus, the greenhouse gas cases come before the Court not as a war over whether GHG emissions should be regulated by the EPA, but as a narrower skirmish over what permitting requirements apply to stationary sources of them.
The climate wars would not have reached the Court were it not for a strategic blunder by the Bush administration. In September 2003 Bush’s EPA denied a petition asking the agency to regulate GHG emissions from motor vehicles. By officially denying the petition, the EPA opened the courthouse doors to judicial review of whether the CAA gave the agency authority to act. By a five-to-four vote the Supreme Court in Massachusetts v. EPA ultimately held that greenhouse gases were “air pollutants” covered by the CAA.
In dissent Chief Justice Roberts, joined by Justices Scalia, Thomas, and Alito, stated that even if global warming and climate change were the most pressing environmental problems of our times, the harm they may cause is too diffuse and speculative to give anyone standing to seek judicial redress. Justice Kennedy, however, sided with the other four Justices in rejecting this view. Their five-Justice majority held that the EPA has the authority to control greenhouse gas emissions under the Clean Air Act, and it required the EPA to decide whether or not to regulate them.
Upon taking office in January 2009, President Obama asked Congress to adopt legislation to create a national cap-and-trade program to control GHG emissions. He warned Congress that if it failed to act, the EPA would regulate GHGs using its authority under the CAA. In June 2009 the U.S. House of Representatives narrowly passed the Waxman/Markey bill to establish a national cap-and-trade program, but the Senate failed to act.
In December 2009, the EPA found that emissions of greenhouse gases “endanger public health and or welfare,” the statutory trigger for regulating them under the CAA. The agency then issued the “Tailpipe Rule” setting standards for GHG emissions from motor vehicles. Following its longstanding interpretation of the CAA, the EPA concluded that the tailpipe rule automatically triggered regulation of stationary sources of GHG emissions under two programs (PSD and Title V) that require permits for sources of “any air pollutant.” The EPA determined that major stationary sources of GHGs would be subject to PSD and Title V permitting on January 2, 2011, the date the tailpipe rule became effective. This became known as the “Timing Rule.”
The most controversial aspect of the EPA’s action is its effort to tailor the permitting regulations so that they apply initially only to the very largest sources of GHG emissions — what it called the “Tailoring Rule.” The CAA sets statutory thresholds of 100 and 250 tons of emissions per year for various sources to be covered by the PSD and Title V permit programs. Because so many sources emit GHGs, the EPA estimated that 81,000 PSD permits and 6.1 million Title V permits would fall within the statutory thresholds. Because this would overwhelm the permit programs, the EPA issued the Tailoring Rule that applies the permit requirements only to sources whose GHG emissions exceed 75,000 or 100,000 tons per year. This includes sources responsible for eighty-six percent of GHG emissions from stationary sources.
Various industry groups and states challenged the EPA’s action by filing scores of petitions for review in the D.C. Circuit. The court consolidated the cases into a single proceeding reviewing the EPA’s Endangerment Finding, its Tailpipe Rule, and its Timing and Tailoring Rules. Oral argument consumed two full days. So many hundreds of lawyers were involved in the cases that the listing of their names occupies six full pages of the Federal Reporter.
The D.C. Circuit unanimously dispatched all of the challenges in a per curiam opinion by Chief Judge Sentelle and Judges Rogers and Tatel. The panel upheld the Endangerment Finding and Tailpipe Rules, and it concluded that the EPA’s conclusion that the Tailpipe Rule triggered the PSD and Title V permit requirements was “unambiguously correct.” The court dismissed challenges to the Timing and Tailoring Rules by finding that no party had standing to challenge the EPA’s failure to regulate smaller sources, a rare example of standing doctrine being used to benefit environmental interests.
Cert. petitions were filed challenging virtually every aspect of the D.C. Circuit’s decision. But the Supreme Court granted cert. limited solely to the question whether the Tailpipe Rule “triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” This would appear to rule out reconsideration of Massachusetts v. EPA or judicial second-guessing of EPA’s endangerment finding.
The starting point for handicapping the greenhouse gas cases is to consider the line-up of Justices in the Court’s previous GHG decisions. The four dissenters in Massachusetts v. EPA remain on the Court. In American Electric Power they continued to assert their belief that climate change did not give rise to standing, though only Justices Alito and Thomas registered continuing disagreement with the Massachusetts holding that GHGs are covered by the CAA. Two Justices from the Massachusetts majority (Justices Stevens and Souter) no longer are on the Court, but their successors (Justices Kagan and Sotomayor) are likely to adhere to the same views. This could leave Justice Kennedy in his familiar position as the decisive vote.
If the Court applies normal doctrines of judicial deference, this should not produce another five-to-four decision. The Justices do not relish delving into the intricacies of the CAA because it is one of the most complex regulatory statutes on the planet. Indeed CAA regulations are what spawned the Chevron doctrine of deference to agency decisions. The papers of the late Justice Blackmun reveal that Justice Stevens, the author of Chevron, declared at conference “when I get so confused, I go with the agency.”
Congress gave the D.C. Circuit exclusive venue to review challenges to CAA regulations. The D.C. Circuit panel that heard the case included Chief Judge Sentelle, who is no fan of environmental regulation, and it unanimously upheld the EPA’s actions.
The cert. grant here likely was inspired by Judge Kavanaugh’s dissent from the denial of rehearing en banc, which Judge Brown joined. Kavanaugh concluded that the phrase “any air pollutant” should not be interpreted to refer to any pollutant regulated under the CAA but rather only to the six pollutants for which EPA has promulgated national ambient air quality standards (NAAQS). While acknowledging that EPA’s interpretation initially appears “plausible,” he concluded that it cannot be correct because it would produce absurd results by requiring millions of small sources to obtain permits. But this is precisely why the EPA promulgated the Tailoring Rule, which avoids this problem by initially applying PSD permit requirements only to the largest sources of GHGs. Even if the Court views the statutory language “any air pollutant” to be ambiguous, the EPA’s position should be entitled to Chevron deference.
Undeterred by the narrow question on which the Court granted cert., thirteen state petitioners ask it to overrule Massachusetts v. EPA and suggest that the Tailoring Rule represents an unconstitutional exercise of legislative power in violation of the non-delegation doctrine. Thirteen years ago in Whitman v. American Trucking Associations, the Court unanimously rejected an aggressive campaign by business interests to declare the CAA unconstitutional on non-delegation grounds. Some of the same business interests now assert that the EPA’s GHG regulations “may be the costliest, most intrusive regulatory program the nation has yet seen,” but fifteen states as amici tell the Court that the GHG permit process has been working well and is not unduly burdensome.
The heart of the industry petitioners’ case is the argument that stationary sources of GHGs cannot be regulated under the CAA because the EPA has only regulated the largest sources of them. Ironically, if the EPA were to lose this case, the result could be a more burdensome regulatory program. In light of its Endangerment Finding, the EPA could promulgate a NAAQS for GHGs that would require every state to develop control plans to meet a uniform, national ambient standard. But because the harm GHGs do is global, it can be addressed in a less burdensome fashion, as the EPA has sought to do.