Judicial review in the new age of deference

Section 115 of the Clean Air Act (CAA) provides an appropriate and workable vehicle for reducing U.S. greenhouse gas emissions consistent with multinational reduction goals and agreements. The language on its face authorizes EPA to address air pollutants emitted from sources in the United States that endanger public health and welfare in a foreign country where that country gives the U.S. “essentially the same rights” with respect to its emissions as Section 115 gives to it. Given the Supreme Court’s ruling in Massachusetts v. EPA that greenhouse gas emissions are regulable as “air pollutants” under the CAA, EPA’s authority to implement reciprocal arrangements with other nations to reduce domestic greenhouse gas emissions seems clear. Under recent Supreme Court rulings, however, this reading of Section 115 might be disputed. For example, one could foresee a challenger raising questions about whether “air pollutant” has the same meaning under Section 115 as under other provisions of the Act: whether EPA has the ability to interpret Section 115 to authorize regulation of greenhouse gas emissions at all. Moreover, in putting Section 115 to use, EPA would need to supply legal interpretations dealing with other issues not apparently resolved by the statutory language. These issues would include the criteria for determining the content of “essentially the same rights” granted by foreign nations as a condition of EPA’s Section 115 authority; the terms of the endangerment finding that is also a prerequisite for EPA action; the specifics of state implementation plan revisions as applied to greenhouse gases in this setting, including the method of allocating reduction levels to the various states; and the integration of efforts under Section 115 with regulation of greenhouse gas emissions under other provisions of the Clean Air Act, such as Sections 202 (auto emissions) and 111(d) (emissions from existing stationary sources). EPA’s legal interpretations on these issues could be subject to attack as “unreasonable” under the rules for judicial review of such interpretations established by Chevron v. Natural Resources Defense Council, Inc. The degree of deference to EPA’s legal interpretations accorded by reviewing courts will be an important determinant of the success of such attacks. This chapter examines how a court might analyze a prospective set of regulations under Chevron’s analytic rubric. Part I sets out the basic framework for judicial review of agency interpretations. Part II examines the exception to Chevron’s default rule for informal interpretations. Part III takes a serious look at the potential difficulties posed by the “major question” exception to Chevron deference, including the role of this exception in Utility Regulatory Group v. EPA, in which the Court overturned a climate change regulation under the CAA. In Part IV, I analyze other recent CAA decisions by the Court with implications for Chevron review. Part V considers the impact of recent personnel changes on the Court, and in Part VI, I offer my take on the prospects for Chevron deference in judicial review of a Section 115 climate change regulation. Although there is always legal risk when agency regulations are challenged, the analysis concludes that the agency would be able to limit the risks by relying on balanced, well-reasoned interpretations tied to the structure and purposes of the legislation and limiting application to sources already regulated under the CAA.