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Greenhouse gases and “major questions”: Justices to hear argument on EPA’s power to tackle climate change

industrial facility with three tall smoke stacks and numerous power lines criss-crossing in foreground

Three days after President Joe Biden named Judge Ketanji Brown Jackson as his nominee to succeed the retiring Justice Stephen Breyer, Breyer and his colleagues will return to the bench on Monday morning to hear oral argument in a case involving the Environmental Protection Agency’s authority to regulate greenhouse gases. Although the case hinges on a highly technical provision of the Clean Air Act, it nonetheless has the potential to be one of the most consequential cases in a term packed with blockbuster cases. In briefs filed in the case, stakeholders ranging from climate scientists to companies like Apple and Amazon emphasize the importance of the EPA’s role in regulating greenhouse-gas emissions and caution the justices against a ruling that would, they say, hamstring the EPA’s ability to take nationwide action to fight climate change. And depending on exactly how the justices rule, their decision could limit the power of federal agencies more broadly.

Background: The long-running fight over greenhouse-gas regulation

The dispute at the center of West Virginia v. Environmental Protection Agency began with the Obama administration’s adoption of the Clean Power Plan, a 2015 rule that sought to combat climate change by reducing carbon pollution from power plants. The plan set individual goals for each state to cut power-plant emissions, instructed the states to submit their plans by 2018 and then gave them until 2030 to meet their goals. Several states and private plaintiffs went to federal court to challenge the plan, and in February 2016 the Supreme Court, dividing 5-4, put the plan on hold before it could go into effect.

In 2019, the Trump administration’s EPA repealed the Clean Power Plan and issued a more lenient policy, known as the Affordable Clean Energy Rule, that established a different set of emission guidelines for existing coal-fired steam plants. The ACE Rule gave states discretion in setting standards and gave power plants flexibility in complying with those standards.

The Trump EPA argued that it was compelled to repeal the Clean Power Plan because it exceeded the agency’s authority under the Clean Air Act. Section 7411 of the act authorizes the EPA to determine the “best system of emission reduction” for buildings that emit air pollutants. That provision, according to the Trump administration and the coal industry, is limited to measures that can be implemented on the physical premises of a power plant – a limitation known in industry parlance as “inside the fenceline.” Inside-the-fenceline measures include things like installing equipment that can reduce a plant’s pollution.

The Clean Power Plan, by contrast, included some measures that operated industry-wide. For example, the plan called for “generation shifting,” which is reducing emissions by shifting the source of power generation from higher-emitting power plants to lower-polluting sources of energy (such as wind or solar power), and “emissions trading,” when the government sets a cap on emissions and requires permits for emissions allowed under that cap.

A different set of plaintiffs challenged the Trump EPA’s decision to repeal the Clean Power Plan, as well as its adoption of the ACE Rule. In a decision on Jan. 19, 2021 — on the Trump administration’s final full day in office — the U.S. Court of Appeals for the District of Columbia Circuit vacated the repeal of the Clean Power Plan, vacated the ACE Rule, and sent the issue back to the EPA for additional proceedings. The D.C. Circuit explained that it found “nothing in the text, structure, history, or purpose of Section 7411 that compels the reading the EPA adopted.” Two coal-mining companies and 20 Republican-led states, including West Virginia and North Dakota, asked the Supreme Court to review the D.C. Circuit’s ruling. They are supported by a trade association for coal plants, but perhaps surprisingly, most large power companies have lined up on the other side. Those companies have indicated a preference for the Clean Power Plan’s emphasis on grid-wide measures to control emissions.   

Last fall, the justices agreed to take up the case. Meanwhile, the Biden administration indicated that it would not reinstate the Clean Power Plan; instead, it is drafting its own rules on greenhouse-gas emissions from power plants. And although the Clean Power Plan has never taken effect, its emissions goals have already been reached – more than a decade early – through market forces in the rapidly changing energy industry.

A threshold issue: The court’s power to decide the case

There are four separate sets of parties defending the D.C. Circuit’s decision in the Supreme Court: the Biden administration; interest groups that include the American Lung Association and the Sierra Club; a group of Democratic-led state and local governments, led by New York; and several of the country’s largest power companies, which include Consolidated Edison and Pacific Gas and Electric. They argue as a threshold matter that the Republican-led states and the coal companies do not have a legal right to bring this case to the Supreme Court at all, because they are not harmed by the D.C. Circuit’s decision. That decision is on hold, they note, until the Biden EPA issues a new rule – which means that the Clean Power Plan will never go into effect. As a result, they stress, there is no regulation governing greenhouse-gas emissions from existing power plants that currently applies to the states or companies.

Instead, the Biden administration and others contend, what the Republican-led states and the coal companies are really concerned about in this case is what the EPA might do in its new rulemaking to limit emissions. But the appropriate time to challenge that rule is after the EPA issues it. According to the administration, the states and coal companies are effectively asking the court to issue an impermissible “advisory opinion” about the EPA’s power.

The states and companies counter that, under the D.C. Circuit’s ruling, the Biden administration is free to re-adopt the regulatory provisions of the Clean Power Plan. That possibility, they say, means there is still a live dispute for the court to resolve. And it is undisputed, the states and companies add, that they had a legal right to sue when they initially contested the Clean Power Plan in court.

A major battle over the “major questions” doctrine

Beyond the question of whether the court has jurisdiction to resolve the dispute at all, the two sides in the case focus on three main questions. The first is a relatively straightforward question of statutory interpretation: whether Section 7411 does indeed limit the EPA to requiring measures to reduce emissions “inside the fenceline.” The Republican-led states and the coal companies argue that it does, while the Biden administration (and its supporters) counter that it does not.

But the real battle focuses on the argument, made by the states and coal companies, that the D.C. Circuit’s decision interpreting Section 7411 to give the EPA more expansive authority violates the “major questions” doctrine – the idea that if Congress wants to give an administrative agency the power to make “decisions of vast economic and political significance,” it must say so clearly. Even if the Clean Air Act addresses what (greenhouse gas emissions) and whom (power plans) the EPA can regulate, West Virginia writes, it doesn’t say how it can do so. And the Clean Power Plan, West Virginia asserts, is undoubtedly “major” – it was projected to cost hundreds of billions of dollars and require a massive overhaul of a major sector of the U.S. economy. (Even though the Clean Power Plan has never taken effect, the U.S. nonetheless achieved its carbon-reduction goals nine years early due to market effects in the rapidly changing energy industry.)

In its brief, North American Coal Company describes the question of addressing climate change on a national level as a “serious issue that tees up hard policy choices.” It urges the justices to reverse the D.C. Circuit’s decision “to ensure that those momentous trade-offs are made by Congress, as the Constitution contemplates.”

The interest groups and the power companies that are defending the D.C. Circuit’s decision push back against the idea that the major-questions doctrine should apply to this case. The Supreme Court, the groups stress, has never applied that doctrine to a rule that is no longer in effect and would not impose any real costs even if it were revived. Moreover, they add, in its 2011 decision in American Electric Power v. Connecticut, the Supreme Court ruled that Section 7411 gives the EPA the power to decide how to regulate carbon-dioxide emissions from power plants.

The Biden administration emphasizes that although “outside the fenceline” measures could theoretically have significant practical consequences, that does not mean that all steps that the EPA takes necessarily fall within the scope of the major-questions doctrine. The administration distinguishes this case from the Supreme Court’s recent decision relying on the major-questions doctrine to block the administration’s vaccine-or-test mandate for large employers. Although the court ruled in that case that Congress had not given the Occupational Safety and Health Administration the power to adopt measures that would apply to all large employers, it made clear that OSHA did have the power to adopt targeted measures in cases in which “the virus poses a special danger because of particular features of an employee’s job or workplace.” The same is true with the EPA’s power to regulate greenhouse gases, the administration argues, and the court should not hamstring the agency’s power in advance by declaring all outside-the-fenceline measures impermissible before anyone knows what the “practical significance or insignificance” of the Biden administration’s rule will be.

The states and coal companies urge the justices to reverse the D.C. Circuit’s ruling for another reason. Unless Section 7411 is read to limit EPA’s power, they say, it would violate the non-delegation doctrine, the idea that Congress cannot delegate its legislative powers to other institutions. Westmoreland Mining contends that allowing EPA to include outside-the-fenceline measures like generation shifting “allows EPA to shrug off the statutory criteria that would otherwise limit its regulatory discretion,” giving it “unbridled power” to “decide what industries to target, how fast to proceed, and how far to go in achieving its objectives.”

The Biden administration, the interest groups, and the power companies reject any suggestion that upholding the D.C. Circuit’s decision would violate the nondelegation doctrine. The Supreme Court has long emphasized, they say, that Congress does not violate the nondelegation doctrine as long as it provides an “intelligible principle” to guide the agency’s exercise of authority. Section 7411 does exactly that: It directs the EPA to consider a variety of factors (including cost and whether the limitations are achievable) to reduce pollution.

The Supreme Court has applied the major-questions doctrine twice in the last year, not only in the vaccine case but also in lifting a federal ban on evictions imposed by the Centers for Disease Control because of the COVID-19 pandemic. Both of those cases, however, came to the court on the so-called shadow docket. In this case, the justices could issue a full-fledged ruling on the merits that could, if they accept the arguments by the states and coal companies, limit the power of not only the EPA but other administrative agencies.

The major-questions doctrine was clearly at the forefront of some justices’ minds even before Monday’s oral argument. At last week’s argument in a case involving gambling on Native American reservations, Justice Elena Kagan asserted that the various doctrines on which courts rely to interpret statutes are “all over the place.” She specifically mentioned the “supposed major-questions canon,” and she suggested that “maybe we should just toss them all out.” Other justices, however, were less convinced. Justice Brett Kavanaugh agreed that Kagan’s question was “important,” but he countered that the canons of statutory interpretation are more structured, and make more sense, than Kagan gave them credit for. The debate will no doubt continue on Monday.

This article was originally published at Howe on the Court.

Recommended Citation: Amy Howe, Greenhouse gases and “major questions”: Justices to hear argument on EPA’s power to tackle climate change, SCOTUSblog (Feb. 27, 2022, 6:03 PM),