Ohio v. Environmental Protection Agency

WHETHER THE STAY OF THE GOOD NEIGHBOR RULE SHOULD BE GRANTED

Ohio et al. argue that the EPA’s Good Neighbor Rule should be subject to a stay while the case proceeds in the lower courts. Reply in Support of State Applicant’s Emergency Application for a Stay of Administrative Action, at 1−2. The applicants rely on the factors expressed in the case Nken v. Holder to establish their case for a stay: (1) a strong showing of likelihood of success on the merits; (2) whether the applicant will be irreparably harmed; (3) whether the opposing party will be irreparably harmed if a stay is granted; and (4) a consideration of the public interest. Id. at 2. Ohio et al. argue that the Supreme Court has in the past stayed agency actions pending review. Id. Ohio et al. further articulate that there is no need to meet the Supreme Court’s injunction standard, which requires a higher standard of justification. Id. Ohio et al. maintain that they are simply requesting a stay, and that to grant a stay, the Supreme Court need only consider the strength of the state’s underlying claims, under the traditional Nken factors. Id. Furthermore, Ohio et al. state that significant costs and economic injuries will be imposed on states if the stay is not granted, leading to irreparable harm. Brief of State Applicants’ Emergency Application for a Stay of Administrative Action, Ohio et al. at 24−25. In contrast, Ohio et al. argue in favor of granting the stay, the EPA initially delayed the implementation of the air-quality standards, so the EPA faces no undue harm if the stay is granted, and there is public interest in ensuring the correct application of the law. Id. at 27.

The EPA maintains that Ohio et al. are not requesting a stay, but rather an injunction against the enforcement of the new rule, which requires a much higher standard, and should only be granted under exceptional circumstances. Brief for Respondent, United States Environmental Protection Agency (“EPA”) at 16−17. Specifically, New York et al. articulate that a stay should only be granted if there is a “reasonable probability” that four Justices would grant certiorari. Brief for States of New York et al. Respondents in Opposition to Applications for Stays, at 12. Furthermore, New York et al. claim that the harm from a stay outweighs any possible benefits. Id. at 13. New York et al. state that the environmental effects upon other states by Ohio et al. not complying with EPA guidelines means that a stay is against the public interest. Id. at 14−15. New York et al. further contend that there is no irreparable harm suffered by the applicant states absent a stay, because all costs “are either unconnected to the challenged Rule or too remote and speculative to justify a stay.” Id. at 20.

WHETHER THE GOOD NEIGHBOR RULE IS ARBITRARY AND CAPRICIOUS

On the merits, Ohio et al. argue that several aspects of the EPA’s rule are arbitrary and capricious within the meaning of the Administrative Procedure Act; that is, Ohio et al. contend that the EPA constructed their rule without logical and rational consideration of the relevant factors. Reply in Support of State Applicant’s Emergency Application for a Stay of Administrative Action, at 4. Specifically, Ohio et al. contend that the EPA was required –– but failed –– to consider the potential consequences of adverse legal decisions to its rule, such as its viability. Brief of State Applicants’ Emergency Application for a Stay of Administrative Action, at 16. Ohio et al. indicate that, after the EPA’s exemption, the federal plan has become a failure, regulating only “11% of the emissions from electric-generating units” and only “40% of emissions from industrial sources” for a total exemption of approximately 75% of the emissions. Id. at 17. According to Ohio et al., such a result was “entirely foreseeable” because of the EPA’s desire to manage the Clean Air Act, rather than passing on those obligations to states as required by the statutory scheme. Id. at 17−18. Ohio et al. argue that the EPA arbitrarily and capriciously disapproved of state plans and was aware that states were going to contest the application of the EPA federal plan. Id. at 19. Therefore, the EPA reasonably would have foreseen that their plan would not be effective, and would not apply uniformly to all affected states. Id. at 20. In other words, Ohio et al. maintain that the EPA failed to adequately assess the potential legal consequences in alleged attempt to aggrandize their regulatory power under the Clean Air Act. Id.

Additionally, Ohio et al. similarly criticize the failure to consider judicial stays of the rule between its initial announcement in March 2022 and its final announcement in June of that year, which would have alerted the agency to the action’s arbitrary and capricious nature. Reply in Support of State Applicant’s Emergency Application for a Stay of Administrative Action at 11. Ohio et al. contend that this separate duty continues until “publication” of the final rule, such that it was improper for the EPA to fail to consider the judicial stays regardless of whether the stays were presented to the EPA before initial promulgation in March. Id. Consequently, they assert, the EPA improperly frames the stays as information not available to the agency for incorporation into its action; instead, the agency should have sua sponte evaluated those stays as contributing to its understanding of whether the action in question was “arbitrary and capricious” in nature. Id.

Furthermore, Ohio et al. contend that the EPA misstates the process requirement regarding objections to an administrative rule. Id. at 8. Ohio et al. argue that the Clean Air Act requires only those objections to be made with “reasonable specificity” during notice-and-comment––not that those objections come from the party challenging the rule in Court. Id. Since commentors during the notice-and-comment period raised, with reasonable specificity (though not in the precise terms now under litigation) the objections now raised by the state applicants, these applicants argue that this is sufficient to preserve judicial review of the claim. Id.

The EPA responds that they were under no obligation to reconsider the rule’s reasonableness due to events occurring after the rule was promulgated. Brief for Respondent at 19. The EPA refers to the Clean Air Act which says, in part, “[o]nly an objection to a rule which was raised with reasonable specificity during the period for public comment may be raised” as an objection in federal court. Id. The EPA argues that since the stay orders were issued months after the Good Neighbor Rule was signed and made public, they do not affect the legality of the Good Neighbor Rule when it was initially introduced. Id. at 20. Similarly, the EPA maintains that the rule remains reasonable and can function in the remaining states, even though a smaller group of upwind states are subject to the rule. Id. at 19. The EPA argues that because there had been no stays prior to the finalization of the rule, the EPA had no requirement of foreseeability. Id. at 26.

Moreover, EPA argues that Ohio et al., to raise their objections with respect to adverse legal determinations, needed to do so during notice and comment; otherwise, they must raise these objections through an initial petition for reconsideration. Id. at 20. Since Ohio et al. have not exhausted those requirements, the EPA contends that the Supreme Court does not have authority to answer Ohio et al.’s question. Id. at 20.

The EPA further criticizes the states use of these stays as a means to undermine the lawfulness of the rule. Id. at 20. Citing DHS v. Regents of the Univ. of Cal. (2020), they contend that the lawfulness of the federal implementation plan need only be evaluated at the time the initial rule was filed. Id. at 20–21. The EPA further argues that any affected state could have petitioned for a reconsideration of the action in light of those stays to alert the agency to changing circumstances surrounding the rule. Id. at 21. In failing to exhaust these remedies and instead resorting to the expedient of judicial challenge, the EPA challenges, Ohio et al. have “evade[d]” proper procedure and deprived the agency of an ability to adequately shape its rule in response to those critiques. Id. And at any rate, they argue, the affected states have incorrectly challenged the disapproval of the alternative state plans, instead of challenging the adequacy of the federal-implementation plan. Id.