The United States Supreme Court Rejects EPA’s Adoption of the Clean Power Plan Absent an Express Congressional Delegation of Authority
7/1/2022
On Thursday, the United States Supreme Court issued a long-awaited opinion in West Virginia, et al., v. EPA, __ S. Ct. __, 2022 WL 2347278 (June 30, 2022).[1] The case involved review of the Clean Power Plan, which was originally promulgated by the EPA in 2015 during the Obama administration. In its opinion, the Court invoked the “major questions doctrine,” holding that, in adopting a “generation shifting” approach requiring a decrease in electric power generated by coal-fired power plants and a move towards natural gas and renewables, EPA exceeded the authority delegated to it by Congress under Section 111(d) of the Clean Air Act. The Court’s opinion was authored by Chief Justice Roberts, in which Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett joined. Justice Kagan filed a dissent, joined by Justices Breyer and Sotomayor; Justice Gorsuch filed a concurring opinion.
Justiciability
A controversial aspect of the Court’s opinion and one that generated some of the early coverage in the mainstream press[2] was the Court’s decision to take the case at all. The Trump administration’s EPA had repealed the Clean Power Plan in 2019 and issued a new rule – the Affordable Clean Energy (“ACE”) Rule – which in turn was vacated by the D.C. Circuit Court of Appeals. The Biden administration took over immediately on the heels of the D.C. Circuit’s opinion, and EPA moved to stay the D.C. Circuit’s mandate while it undertook new rulemaking, stating that it did not intend to enforce the Clean Power Plan.[3] Based on these actions, EPA argued that the case was moot. The Supreme Court disagreed, noting that the D.C. Circuit’s decision vacating the ACE rule had the effect of reviving the Clean Power Plan. As a result, the petitioning States faced potential injuries, since they were “the object of” its requirement to more stringently regulate power plant emissions within their borders. Noting that the government’s “voluntary cessation [of enforcement] does not moot a case,” the Court held that the D.C. Circuit’s vacation of the ACE Rule and reinstatement of the Clean Power Plan was justiciable.[4]
The Clean Power Plan’s “Generation Shift” from Coal to Natural Gas and Renewables
The Clean Power Plan was grounded on EPA’s finding that carbon dioxide was an “air pollutant” that “may reasonably be anticipated to endanger public health or welfare” by causing climate change.[5] After making that finding, EPA claimed that under Section 111(a)(1) of the Clean Air Act, it is required to develop the “best system of emission reduction which … has been adequately demonstrated.” The Clean Power Plan adopted a three-pronged approach to the reduction of carbon dioxide, which the Plan termed “building blocks.” The first was “heat rate improvements” at coal-fired power plants – essentially steps to make combustion more efficient. The second and third “building blocks” were: (1) a shift in electricity production from coal-fired generation to natural-gas-fired plants; and (2) a shift from both coal- and gas-fired plants to “new low- or zero-carbon generating capacity, mainly wind and solar.”[6] The goal of the Plan was to move the percentage of coal-fired electricity generation from 38% of the nation’s power supply (which it was in 2014) to 27% by the year 2030.[7] EPA’s modeling anticipated that this change would result in “billions of dollars of compliance costs (to be paid in the form of higher energy prices), require the retirement of dozens of coal-fired plants, and eliminate tens of thousands of jobs across various sectors.”[8]
The “Major Questions Doctrine”
In reviewing the scope of EPA’s “generation shifting” approach, the Court invoked the “major questions doctrine,” which holds that in “extraordinary cases” in which the “history and breadth of the authority that [the agency] has asserted,” and the “economic and political significance” of that assertion, the agency must point to a “clear congressional authorization” for the authority that it claims.[9] In doing so, the Court relied on EPA’s own invocation of the “major questions doctrine” as a basis for the Agency’s prior repeal of the Clean Power Plan in 2019.
Court Finds that a Shift in the Overall System of Power Generation Required an Explicit Congressional Delegation of Authority
Justice Roberts stated that, in cases where the major questions doctrine applies, “both separation of powers principles and a practical understanding of legislative intent make us ‘reluctant to read into ambiguous statutory text’ the delegation claimed to be lurking there.”[10] According to the Court, EPA’s approach in the Clean Power Plan – which sought to “improv[e] the overall power system by lowering the carbon intensity or power generation … by forcing a shift throughout the power grid from one type of energy source to another” – required an explicit grant of Congressional delegation.[11] The majority found it “highly unlikely that Congress would leave to ‘agency discretion’ the decision of how much coal-based generation there should be over the coming decades.”[12] In order to do so, the EPA must point to “clear congressional authorization” to regulate in such a manner.[13]
Justice Kagan’s Dissent
In her dissenting opinion, Justice Kagan castigated the majority for issuing “what is really an advisory opinion on the proper scope of the new rule EPA is considering. That new rule will be subject anyway to immediate, pre-enforcement judicial review. But this Court could not wait – even to see what the new rule says – to constrain EPA’s efforts to address climate change.”[14] Justice Kagan claimed that “[t]he Court has never even used the term ‘major questions doctrine’ before”[15] and that to do so now, ignores the fact that “[e]very regulation of power plants – even the most conventional, facility specific controls – ‘dictat[es]’ the national energy makeup to one or another degree.”[16] Focusing on the broader question of the overall approach to combatting climate change, Justice Kagan concluded: “Whatever else this Court may know about, it does not have a clue about how to address climate change. … Yet the Court today prevents congressionally authorized agency action to curb power plants’ carbon dioxide emissions. The Court appoints itself – instead of Congress or the expert agency – the decision maker on claim policy. I can’t think of many things more frightening.”[17]
Conclusion
This decision may require EPA to tie major environmental programs to the specific provisions of the applicable statutes in which Congress granted EPA that power. It will be interesting to watch how EPA’s climate change rules develop in the future, and how it overcomes or adapts to this decision.
If you have questions about this opinion or other issues pertaining to environmental or natural resources law, please contact Steve Jones or any member of our Natural Resources, Water, Environmental and Local Government Law practice group.
[1] All citations to the opinion are to the version appearing on Westlaw.
[2] See, e.g., Supreme Court Limit’s E.P.A.’s Ability to Restrict Power Plant Emissions, N.Y. Times (June 30, 2022); Supreme Court’s EPA ruling upends Biden’s environmental agenda, Washington Post (June 30, 2022).
[3] 2022 WL 2347278, at * 11.
[4] Id. at ** 10-11.
[5] 80 Fed. Reg. 64410, 64530 (2015).
[5] 2022 WL 2347278 at * 7.
[7] Id. at * 8.
[8] Id. * 9 (citing EPA’s 2019 Rule repealing the Clean Power Plan, 84 Fed. Reg. 32523, 32524 (2019)).
[9] Id. at * 11.
[10] Id. at * 13 (quoting Utility Air Regulatory Group v. EPA, 573 U.S. 302, 324 (2014)).
[11] Id. at * 15 (quoting 80 Fed. Reg. at 64703) (italics in original opinion).
[12] Id. at * 16 (quotations omitted).
[13] Id. at * 17 (quoting Utility Air, 573 U.S. at 324).
[14] Id. at * 28 (Kagan, J., dissenting).
[15] Id. at * 32.
[1] Id. at * 35 (quoting majority opinion) (italics in original opinion).
[17] Id. at * 40.