West Virginia v. Environmental Protection Agency

Issues 

Under a provision of the Clean Air Act, did Congress prohibit the EPA from issuing rules and standards of performance that could potentially reshape the country's electricity grids and unilaterally decarbonize any sector of the economy?

Oral argument: 
February 28, 2022

This case asks the Supreme Court to consider the statutory limitations imposed on the Environmental Protection Agency by the Clean Air Act when it attempts to regulate emissions emanating from stationary sources. Petitioner West Virginia argues that the Court should not allow the EPA to issue significant rules that can reshape the country’s electricity grids and thus expand the agency’s power to an unprecedented level. Respondent the Environmental Protection Agency (“EPA”) responds that the Court should not read into the text an artificial restriction because any qualification will be directed at the states, not the federal agency. The Court’s decision in this case has heavy implications for the scope of federal administrative power, climate change policy, and statutory interpretation.

Questions as Framed for the Court by the Parties 

Whether, in 42 U.S.C. § 7411(d), an ancillary provision of the Clean Air Act, Congress constitutionally authorized the Environmental Protection Agency to issue significant rules — including those capable of reshaping the nation’s electricity grids and unilaterally decarbonizing virtually any sector of the economy — without any limits on what the agency can require so long as it considers cost, nonair impacts and energy requirements.

Facts 

In 1963 Congress passed the Clean Air Act, which aimed to “protect and enhance” the quality of our air. Am. Lung Ass'n v. Envtl. Prot. Agency at 930. In 1970, Congress amended the Clean Air Act and granted the Environmental Protection Agency (“EPA”) additional powers to regulate any “new and existing” sources of air pollution originating from stationary sources. Id. Congress gave the EPA ninety days following the 1970 law’s enactment to list prominent stationary source categories, such as power plants. Id. The EPA was also required to issue new “standards of performance” for every newly constructed stationary source within each category going forward, and new guidelines for how to reach those standards. Id. at 931–32. All regulations of power plants must undergo this process, and the federal government partners with state governments to ensure its standards are met through a variety of coordinated enforcement measures. Id.

In 2015, the EPA reaffirmed an earlier finding that greenhouse gas emissions endanger public health and began preparing a factual basis for a new regulatory rule. Id. at 935. In 2019, the EPA adopted the Affordable Clean Energy (“ACE”) rule to regulate the greenhouse gas emissions of power plants. Id. The ACE rule repealed and replaced a preexisting set of regulations, called the Clean Power Plan. Id. at 938. The Clean Power Plan had to be repealed because, in the EPA’s view, it violated Section 7411(d) of the Clean Air Act by accomplishing some of its stationary source emission reduction measures offsite. Id. The EPA claimed that the ACE Rule rectified this issue by implementing a new system of emissions reduction–solely for coal-fired power plants–that involved on-site heat-rate improvement technologies. Id. The ACE rule’s guidelines for emissions reduction ranges were non-mandatory; and, the EPA predicted that the ACE rule would reduce carbon dioxide emissions by less than 1% by 2035. Id. at 940. The EPA relied on these estimations to argue the efficiency of the ACE rule, but environmental advocacy groups would later use the same estimates to argue the ACE rule did not go far enough. Id. The ACE Rule’s regulations also extended the States’ deadlines for enforcing regulatory compliance plans and altered some of the evaluation mechanisms for keeping an eye on the States’ compliance with the emissions reductions. Id.

Several groups—including state and local governments and environmental advocacy groups—objected to the issuance of the ACE Rule and its repeal of the Clean Power Plan. Id. Defending its rule, the EPA argued that getting rid of the Clean Power Plant, in favor of the ACE Rule, was statutorily required by the “clear and unambiguous” language of Section 7411 of the Clean Air Act. Id. at 944. However, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) disagreed with the EPA, giving its interpretation of Section 7411 no deference and holding that the EPA’s interpretation was not required by Congress. Id. As a result, the D.C. Circuit concluded that the EPA had not relied on its own judgment and expertise in implementing the ACE rule, and accordingly invalidated the rule and remanded to the EPA. Id.

West Virginia, along with several other states (after the consolidation of several cases), petitioned the Supreme Court to review the D.C. Circuit’s decision. West Virginia v. EPA Cert Petition.

Analysis 

MAJOR-QUESTIONS DOCTRINE

West Virginia argues that Congress did not clearly authorize the EPA to take any measure it deems helpful to reduce carbon emissions solely by administrative rule-making. Brief for Petitioners, West Virginia et al. (“West Virginia”) at 14. According to West Virginia, under the major-questions doctrine, if the power at issue has vast economic and political impact, Congress needs to delegate it to an administrative agency with clear and unambiguous language. Id. at 15. West Virginia argues that Section 7411 does not provide the requisite clear congressional authorization. Id. at 17; 42 U.S.C. § 7411. According to West Virginia, the only evidence that the federal statute clearly authorizes such power stems from the phrase “best system of emission reduction” in Section 7411(a)(1). Id. at 18. West Virginia contends that the phrase, by itself, is unable to support the lower courts’ overbroad interpretation of Section 7411. Id. West Virginia refutes the lower courts’ reasoning that Congress delegates such power as long as the statute does not clearly deny it to the EPA; instead, West Virginia insists that such power must be affirmatively granted, and that only the former ACE rule is within the scope of the statute. Id. at 17.

West Virginia further argues that the power at issue is undoubtedly significant: according to the D.C. Circuit’s interpretation, it says, Congress authorizes the EPA to determine which method comprises the “best system” for a regulated source. Brief for Petitioners at 19. West Virginia contends that, per the D.C. Circuit’s view, the EPA could take almost any measure to compel stationary sources to meet a given standard of performance, such as shutting down carbon-emitting facilities and banning the importation of carbon-intensive goods. Id. West Virginia also points to the actual financial difficulties facing states and individuals should the D.C. Circuit’s decision stand. Id. at 20. According to West Virginia, re-implementing the CPP alone would cause the cost of wholesale electricity to rise by $214 billion, and it would cost an additional $64 billion to replace the power capacity reduced under the CPP. Id. West Virginia further argues that the scope of the D.C. Circuit decision’s implicit grant of authority is also unprecedented, tacitly permitting the EPA to regulate any building that uses or produces carbon-generating power. Id. at 19. According to West Virginia, the lower court’s overbroad interpretation of Section 7411 allows the agency to impose measures that impact millions of Americans, constituting a “major question” of utmost importance. Id. at 26.

The EPA refutes West Virginia’s argument that the major-questions doctrine requires a narrow reading of Section 7411(d)(1)(A). Brief for Respondents, Environmental Protection Agency (“EPA”) and Michael Regan at 44. According to the EPA, the principal language of Section 7411 is directed not at the EPA, but rather at the states (when they devise and implement their own regulatory police powers in coordination with the EPA rule). Id. at 45. The EPA argues that the Court has never restrained the police power of the states while interpreting a federal regulation. Id. The EPA contends that the issue of whether the regulation involves a major question must be decided on a case-by-case basis; even if some exercises of an agency’s power might implicate the major-questions doctrine, the EPA contends, it does not follow that all exercises of that power are categorically forbidden. Id. at 48.

Consolidated Edison and other power companies (“Power Companies”) are also Respondents in this case alongside the EPA and argue that the major-questions doctrine is not applicable here because what West Virginia asks for is essentially an advisory opinion. Brief for Respondents, Consolidated Edison, Inc. et al. (“Power Companies”) at 20. According to Power Companies, the lower courts’ decision that the statute does not limit the agency’s authority does not by itself constitute agency action. Id. Power Companies also point out that the application of the major-questions doctrine will depart from the Supreme Court’s precedents; so far, the Court has only reviewed actual agency regulation. Id. at 21. According to Power Companies, if the Court applies the doctrine as West Virginia asks, it will contradict the Court’s long-established principle to avoid judicial overreaching and will create administrability problems. Id. at 22–23.

TEXTUAL INTERPRETATION

West Virginia asserts that Section 7411, when correctly interpreted, does not empower the EPA to regulate across industries or manage the country’s electricity supply, but only gives the EPA power inside the fenceline. Brief for Petitioners at 33. West Virginia argues that the lower court improperly interpreted the terms in an unlimited, context-free way. Id. at 37. According to West Virginia, the terms that Congress uses are source-specific: for example, for a standard of performance to reflect “achievable” degrees of emission reduction through an “adequately demonstrated” system, the EPA cannot pick any target it wants, but must base its evaluation on techniques that have been tested in the real world. Id. at 35. If the EPA can pick any target and average emissions across different sources, West Virginia argues that any system can be “adequately demonstrated” and any target achievable. Id.

West Virginia also distinguishes the singular and plural forms of the word “source” in Section 7411(b)(1) and (d)(1). Brief for Petitioners at 39. According to West Virginia, since standards of performance must be established “for any existing source,” they are case-specific, which makes it hard to interpret the term “best system” without taking a particular source into account. Id. at 39. Since outside-the-fenceline measures do not connect to a specific source, West Virginia argues that they are excluded. Id. at 37–38. West Virginia also emphasizes that any standard of performance must apply to the “stationary source,” which is the building itself, rather than to its “owner or operator,” which is separately defined, and therefore no outside-the-fenceline measure is allowed. Id. at 40.

West Virginia further points out that Congress must use explicit language if it intends to delegate to a federal agency power that is traditionally reserved to the states. Brief for Petitioners at 27. According to West Virginia, regulating utilities is long associated with the police power of the states. Id. at 27. West Virginia further argues that Congress also takes federalism into account when it allows the states to enact and administer their own regulatory programs. Id. at 28. West Virginia also contends that the plan that the EPA intends to implement would upset the balance between the state and federal government by allowing the EPA to step into realms traditionally reserved to the states. Id. at 29.

The EPA refutes West Virginia’s argument that it cannot use outside-the-fenceline measures based on the text. EPA at 33. According to the EPA, West Virginia misreads the word “achievable” in the statute: the word “achievable” qualifies the “degree of emission limitation,” and the “degree of emission limitation achievable” is evaluated based on “application of the best system of emission reduction.” Id. at 36; 42 U.S.C. § 7411(a)(1). The EPA argues that, for each source category subject to regulation under Section 7411(d), the EPA first determines the “systems of emission reduction” that are “adequately demonstrated,” then evaluates the “best” of those systems, and finally derives from the best system an “achievable” “degree of emission limitation.” Id. at 3–4.

According to the EPA, nothing in the requirement that states must “establish standards of performance for any existing source” distinguishes inside-the-fenceline measures such as heat-rate improvements and carbon capture and sequestration from outside-the-fenceline measures like biomass co-firing and trading. EPA at 34. The EPA argues that even if, as West Virginia contends, the standard of performance must apply to the building itself, it does not bar outside-the-fenceline measures, because nothing in the text indicates that all emission reduction must occur at the source. Id.

The EPA argues that West Virginia’s interpretation of the statute undermines rather than supports federalism concerns. EPA at 26. According to the EPA, the statutes language used by West Virginia in support of their argument is directed at the states, not the EPA, and any limitation it reads into the text would also be imposed on the states. Id. at 33–34. The EPA thus concludes that nothing in Section 7411(d) bars states from using outside-the-fenceline measures, and a narrow reading of the text would unreasonably constrain state power. Id. at 27.

Discussion 

SCOPE OF THE EPA

West Virginia argues that one of the biggest problems with the D.C. Circuit’s decision is that it widened the scope of the power of the EPA. West Virginia v. EPA Cert Petition. According to West Virginia, the lower court’s decision gave the EPA a “judicial edict” to not satisfy itself with a narrower interpretation of emission reduction practices limited to individual plants. Id. at 2. West Virginia argues that, unless the decision is reversed, the EPA has been given “universal power” to affect American life, and that such authority is far too expansive. Id. at 3. West Virginia further claims that the EPA has been given power to influence hundreds of billions of dollars over several industries. Brief for Petitioners at 13. The North American Coal Corporation (“NACC”), in support of West Virginia, argues that the D.C. Circuit’s interpretation of the case grants the EPA power to restructure all carbon-emitting industries with a huge level of control over economic activity across the country. Brief of the North American Coal Corporation, in support of Petitioners, at 13. The NACC goes further, contending that the EPA has been given “carte-blanche” to decide the entire climate change policy of the country. Id. at 25. Westmoreland Mining Holdings further makes the point that giving the EPA expansive authority to decide climate change policy runs roughshod over the rightful power of Congress to set policy. Brief of Westmoreland Mining Holdings, LLC at 18.

Several Respondents, including the State of New York, counter that such arguments are slippery-slopes and not justifiable. Brief of State of New York, and Other State and Municipal Respondentsat 17. Similarly, Federal Respondents argue that what Petitioners really fear is any future rule-making the EPA might engage in that would impact their specific economic interests. Brief of Federal Respondents at 18. However, they argue, such fear is not only unjustifiable but also unrealistic. Id. The D.C. Circuit did not, they contend, embolden the next “Green New Deal,” but simply upheld the consistent themes and mandates of the EPA itself. Id. at 19.
Climate Scientists, in support of the EPA, also push back on Petitioners’ complaints that the EPA’s scope has been impermissibly expanded. Brief of Amici Curiae Climate Scientists Michael Oppenheimer et al., in Support of Respondents at 32. The Climate Scientists argue that the EPA should be given extensive power to combat climate change. Id. The Climate Scientists argue that the Supreme Court should “exercise caution” in limiting the EPA’s powers to combat climate change and its effects in any way. Id. at 33. Thomas Jorling, one of the chief architects of the Clean Air Act and in support of the EPA, rebuts Petitioners’ argument that the D.C. Circuit expanded the EPA’s powers at the expense of Congress’s powers. Brief of Amicus Curiae Thomas C. Jorling, in Support of Respondents at 7. Jorling argues that the D.C. Circuit’s decision is consistent with the Clean Air Act’s powers, which were explicitly established by Congress itself. Id. at 9.

Conclusion 

Written by:
Tori Staley
Jenny Guo

Edited by:
Ryan Schelwat

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