In its third encounter with greenhouse gas emissions in the context of the Clean Air Act ("CAA"), the United States Supreme Court, in Utility Air Regulatory Group v. EPA, No. 12-1146, 573 U.S. ____ (June 23, 2014) ("UARG"), reinforced bedrock separation of powers principles—not to mention conventional canons and settled principles of administrative law—by emphatically rejecting the claim of authority of the Environmental Protection Agency ("EPA") to rewrite indisputably unambiguous statutory language that not only disregarded the text and context of the statute but that could have transformative economic, social, and systemic impacts (if unchecked).
In UARG , the Supreme Court determined "[w]hether
EPA permissibly determined that its regulation of greenhouse gas
emissions from new motor vehicles triggered permitting requirements
under the CAA for stationary sources that emit greenhouse
gases." In Justice Scalia's June 23, 2014 opinion, the
Court first held that the general definition of "air
pollutant" analyzed by the Court in Massachusetts v. EPA does not prevent EPA
from applying narrower definitions in the operative provisions of
the Act; thus, there was no "insuperable textual barrier"
preventing EPA from interpreting the Prevention of Significant
Deterioration ("PSD") and Title V provisions to exclude
greenhouse gases.
The Court also held that EPA's interpretation was not
reasonable because it expands the programs beyond their statutory
purposes and would place excessive demands on permitting
authorities. On the other hand, the Court concluded that EPA's
decision to require Best Available Control Technology
("BACT") for greenhouse gases ("GHGs") emitted
by sources otherwise subject to PSD requirements is a permissible
interpretation of the statute because the BACT provisions
specifically apply to "each pollutant subject to
regulation" under the Act. Justices Breyer and Alito authored
separate opinions concurring in part and dissenting in part.
The Supreme Court's decision in UARG could have the
following implications for future claims or future regulation of
GHGs:
- It seems future claims of deference by EPA in the context of greenhouse gas regulation will, at a minimum, be closely scrutinized. The UARG decision could effectively stop any future effort by EPA to arrogate to itself unlimited power and discretion as to what GHG sources to regulate and when—to the point of rewriting the CAA.
- The impact of the decision on the pending EPA rules under Section 111 of the CAA for greenhouse gas emissions from new and existing power plants will be a source of continuing debate and litigation. Although the Court recognized that its prior decision on the CAA's displacement of federal common law nuisance claims in American Electric Power Co. v. Connecticut was based on the authorization in Section 111 to establish standards for greenhouse gas emissions from power plants, the decision reasonably contemplated the possibility that EPA might lawfully "decline to regulate [those sources] altogether at the conclusion of its pending rulemaking." Thus, industry members or a future presidential administration will have an opportunity to argue that nothing in Massachusetts v. EPA or UARG compels EPA to regulate greenhouse gas emissions, particularly where the regulations are arguably "incompatible" with "the substance of Congress' regulatory scheme."
- The Court's discussion of BACT in the PSD process for "anyway sources" has obvious relevance to EPA's determination of the best system of emission reduction for electric generating units under Section 111 of the CAA.
For greater detail on this subject, please see the Jones Day Commentary, " Utility Air Regulatory Group v. EPA: U.S. Supreme Court Stops EPA's Rewrite of the Clean Air Act."
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