U.S. Supreme Court Limits EPA’s Climate Change Authority Under the Clean Air Act

Last Thursday, the U.S. Supreme Court announced a 6-3 decision against the Environmental Protection Agency (EPA). In West Virginia v. EPA, the Court determined that the EPA could not leverage its authority to limit greenhouse gas emission limits for existing power plants to require reduced use or closure of coal-fired facilities.

The Court’s decision relied on and amplified the “major question” doctrine. Writing for the majority, Chief Justice Roberts stated that in adopting regulations in “extraordinary cases” with “economic and political significance,” the regulatory agency must have clear authority from Congress. The Court found inadequate delegation in Section 111(d) of the Clean Air Act, which it held gave the EPA authority to regulate coal-burning facilities but not to close them. The majority held that a “plausible textual basis” for such major action is insufficient, and that such agency actions require more, i.e., “clear congressional authorization.” The majority opinion noted several cases in which the Court has ostensibly relied on the “major questions” doctrine to invalidate regulations it found too big and too untethered from their enabling legislation, citing recent cases invalidating FDA regulation of tobacco products, COVID-19 vaccine mandates and COVID-related evictions.

A concurring opinion by Justice Gorsuch provides clarity on where the Court is headed. In that view, a regulation will be vulnerable under the “major question” rule if it:

1. Involves matters of great political significance,
2. Regulates a significant portion of the national economy, and
3. “[I]ntrudes into an area that is the particular domain of state law.”

Justice Kagan, joined by Justices Breyer and Sotomayor, dissented from the Court’s decision and challenged the Court’s use and reliance on the major question doctrine. Justice Kagan’s dissent asserted that the Court should have applied Chevron deference in analyzing and deciding the case. Chevron deference, a doctrine established in the Court’s decision in Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984), requires courts to defer to formal agency actions if they are based on a rational or reasonable reading of an ambiguous statute that the agency has been charged with administering.

The holding of West Virginia v. EPA raises serious questions about the future of the Chevron deference doctrine, and whether the Court will revoke or further limit its application. Agencies now have dueling doctrines to determine their authority to move forward with actions. They are now on notice that, under the major question doctrine, if their agency action is one a court could decide has extraordinary economic and political significance, then they must have explicit direction from Congress. Whereas, under Chevron, if Congress has not rendered clear direction and authority, the agency needs only a rational or reasonable basis for its action.

The Court will consider additional arguments about the limits of agency statutory powers as early as the first day of the Fall 2022 session, when the Court will hear Sackett v. Environmental Protection Agency. Sackett is a challenge to the scope of the Clean Water Act and the definition of waters of the United States.
 
Background
West Virginia v. EPA considered the scope of powers that Congress granted to the Environmental Protection Agency in the Clean Air Act.
 
During the Obama administration, the EPA issued the Clean Power Plan to create guidelines for greenhouse gas emission reduction from power plants. The Clean Power Plan required emissions reductions that, with existing technology, operators of coal-fired power plants could only meet by shifting power generation to cleaner sources of electricity. After legal challenges from 28 states and hundreds of companies, the Supreme Court stayed the Clean Power Plan in 2016, and EPA did not implement it while the cases were underway.
 
In 2019, the Trump administration issued the Affordable Clean Energy Rule, which repealed and replaced major provisions of the Clean Power Plan. The Affordable Clean Energy Rule required much smaller greenhouse gas emission reductions than the Clean Power Plan. The new rule was challenged by states and companies for not prioritizing public health.
 
On Jan. 19, 2021, the D.C. Circuit vacated the Trump administration’s decision to repeal the 2015 Clean Power Plan and the Trump administration’s replacement rule, the Affordable Clean Energy Rule.
 
The court remanded the case to the EPA to craft a new rule consistent with the Circuit Court’s ruling. EPA has not moved forward with creating a new rule. Because of other technological and economic changes, many of the target emissions reductions of the Obama-era Clean Power Plan have been met, despite the fact that it never took effect. So one notable aspect of this decision is how far the Supreme Court went out of its way to kill a regulation that was already dead. The EPA rules had been challenged immediately upon adoption, and the EPA had not fared well in defending them. The EPA had stated that it had no intention of enforcing the Clean Power Plan prior to promulgating a new Section 111(d) rule. However, this was not enough to moot the case. The Court held that “’voluntary cessation does not moot a case’ unless it is ‘absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.’” In essence, the Court’s suspicion that the government might revert to rule-making like this in the future was enough for the Court to pre-invalidate it today.

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