Source: http://acoel.org/category/Supreme-Court.aspx
Timestamp: 2019-04-20 02:46:28+00:00

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Deference to EPA on the Wane?
The Supreme Court’s latest opinion in an environmental rule challenge, this to the Mercury and Air Toxics Standard, or MATS, raises more questions than it answers. As discussed on this blog site (see here, here and here,) the Court in Michigan v. EPA held that EPA had not reasonably considered costs when determining to regulate power plant mercury emissions. EPA must factor cost into its initial determination that it is “appropriate and necessary” to regulate hazardous pollutants from power plants. The Court passed no judgment on whether EPA can meet that burden.
At the heart of the issue was Congress’ acknowledgement that the 1990 Clean Air Act Amendments would subject power plants to numerous controls to reduce sulfur dioxide, nitrogen oxides, and particulates. Section 112 of the Act requires EPA to regulate power plants if “regulation is appropriate and necessary after considering the results of the study.” Congress further acknowledged that these measures also might reduce hazardous air pollutants, and that no one knew at the time whether additional controls would be required to protect human health from air toxics emitted by power plants.
To determine that, EPA was required to conduct a study. In 1998, EPA’s study concluded that regulation of coal and oil fired power plants was “appropriate and necessary.” EPA reaffirmed this finding in 2012, noting that mercury and other hazardous air pollutants were “appropriate” to regulate because they posed a risk to human health and the environment and that controls were available to reduce the pollutants. EPA found that it was “necessary” to regulate because other pollutant emission limits and requirements did not eliminate the risks.
The Court, in a 5-4 decision written by Justice Scalia, analyzed EPA’s action through the Chevron deference standard, determining that “EPA strayed far beyond those bounds when it read §7412(n)(1) to mean that it could ignore cost when deciding whether to regulate power plants.” Ultimately, the Court held that “Chevron allows agencies to choose among competing reasonable interpretations of a statute; it does not license interpretive gerrymanders under which an agency keeps parts of statutory context it likes while throwing away parts it does not.” Id. at 9.
The Court went on to reject EPA’s contention that it need not factor cost into its initial determination to regulate because the agency must take cost into consideration when later determining how much to regulate. The Court colorfully remarked that: “By EPA’s logic, someone could decide whether it is ‘appropriate’ to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system.” The Court’s strong language cautioning EPA to use “reasoned decision making” and not “gerrymander” statutory requirements should give EPA pause as it is set to promulgate greenhouse gas reduction measures for power plants in its Clean Power Plan this summer. Numerous comments filed in the so-called Clean Power Plan rulemaking docket have charged EPA with overstepping its statutory boundaries, and the Court seems to be signaling its disfavor of such action.
Since the decision, speculation as to whether and how EPA will fix MATS has been rampant.
Will EPA abandon MATS completely, requesting vacatur? Not likely. In public remarks and testimony before a Congressional subcommittee during the week of July 6, Administrator Gina McCarthy cited the health benefits already achieved by the rule, indicating the agency would not back down.
Can EPA fix the rule based on the current administrative record? Some believe that EPA can simply re-jigger its existing analysis and logic, fronting the cost issue in the “appropriate and necessary” finding, perhaps calling this a “technical amendment” to the rule.
Will EPA seek a stay of the existing rule while it recalculates costs and re-proposes the rule? Because the rule went into effect in April 2015, companies already have installed a range of controls from activated carbon injection to installation of flue gas desulfurization equipment. Each type of control has costs and benefits, as well as impact on other pollutants. Many of these controls may remain operational to comply with other CAA requirements; therefore, a stay may have disproportionate impacts on industry members as some cease to operate controls and others continue to operate them.
But could EPA’s re-proposal result in even more stringent emission limits? Absolutely. Would EPA be wise to lower the standards further? Given the cost and disruption caused by MATS so far, absolutely not.
And how will any of these possibilities affect the “already regulated” argument that will be used to attack the Clean Power Plan? Section 111(d), the basis for the Clean Power Plan, prohibits regulation (whether of the source or the pollutant remains to be decided) if a Section 112 standard exists. So if MATS goes away, does the legal basis for the Clean Power Plan become stronger?
How the ongoing, never-ending EPA effort to achieve hazardous pollutant reductions from power plants will play out remains to be seen. The Supreme Court’s close reading of the directives contained in the statute, coupled with its references to balanced costs and benefits, leaves the impression that any rule with wide reach better be well-reasoned and justified. No doubt EPA is taking notice.
WILL POWER PLANT HAZARDOUS AIR POLLUTION SURVIVE MICHIGAN V. EPA?
Twenty-five years in the making, the Environmental Protection Agency’s regulations to reduce emissions of mercury and other hazardous air pollutants (HAPS) from power plants recently ran aground in the Supreme Court. As discussed in this blog site last week, (see here and here,) the majority opinion by Justice Scalia in Michigan v. EPA held that EPA erred in failing to consider cost when it made the threshold statutory finding that listing of power plants for regulation was “appropriate” under a special provision for power plants in the hazardous pollutant sections of the Clean Air Act.
The dissenters, in an opinion by Justice Kagan, disagreed that costs had to be considered at the initial listing stage. She contended that costs were properly addressed when specific standards and requirements were developed for various source categories in the course of the normal rulemaking process, and emphasized that a final cost-benefit analysis was conducted to evaluate and support the decisions made.
Although Justice Scalia was at pains to say that the Court was not specifying the details of the cost analysis required, the majority was plainly troubled by the agency’s findings that the benefits of the mercury controls alone were valued at an annual value of only $4-6 million compared to an annual cost of $9.6 billion. However, mercury was not the only HAP controlled by the rule, and the co-benefits of incidental removal of other toxic fine particulate pollutants were estimated at $36-90 billion in EPA’s cost-benefit analysis. Those big numbers reflect robust scientific evidence of the incidence of illness and death caused by particulate emissions.
The majority did not address whether such co-benefits could be relied upon in a determination that the cost of the power plant rules was “appropriate.“ The D.C. Circuit will have to define the terms of EPA’s redo of the cost analysis. We are likely to hear more about counting of co-benefits in cost benefit comparisons, an issue also presented in EPA’s proposed Clean Power Rule for power plant greenhouse gas emissions. Reducing carbon emissions also reduces particulate emissions even more, and the monetized benefits of that effect exceed the harder to estimate benefits achieved in slowing global warming.
Despite the Supreme Court’s action, commentators on both sides of the issues agree that major benefits of the regulation will not be lost. A trade publication estimated in May that half of the power plants subject to the rule have already installed the required emission control technology to meet multiple EPA air pollution rules, in addition to the hazardous pollutant rule. Another 200 plants given an extra year to comply are installing and testing equipment. Several dozen plants accounting for only 1% of industry capacity reportedly are the remaining uncontrolled sources that will continue to operate without controls or plans to install them until the Michigan case is concluded.
Many companies that have complied with the rules are doubtless disappointed to see the perennial “free riders” get another reprieve; some intervened on EPA’s side in the Michigan case to complain about unfair competition from uncontrolled plants. But the majority of power plants, to their credit, are already delivering the public health and environmental benefits of the rule for the community.
Citizens unhappy with the continuing failure to regulate old coal plants may wish to support the divestment movement, recently joined by Georgetown University, in dumping coal company securities. The day Michigan v. EPA was decided, the stock of three major coal producers rose about 10%. If the price jump holds, now looks like a good time to sell.
In Michigan v. EPA yesterday the Supreme Court held, 5-4, that EPA unreasonably declined to consider costs in deciding to regulate emissions of hazardous air pollutants (HAPs) from electric power plants. At issue was the Agency’s interpretation of the Clean Air Act’s “appropriate and necessary” threshold for regulating emissions from power plants under Section 112. The industry and state petitioners argued that the Agency could not reasonably interpret the phrase as excluding consideration of costs, whereas EPA contended that it could limit consideration of costs to a later phase of the regulatory process – i.e., the setting of emissions standards.
In Environment in the Balance: The Green Movement and the Supreme Court, I describe the competing cultural paradigms that orient us on environmental issues – paradigms immediately recognizable to anyone who works in environmental law and policy. On the one hand, the new ecological model emphasizes the interconnectedness and fragility of natural systems and the importance of collective restraint in protecting those systems. (Pope Francis’ Laudato Si embodies this model.) On the other, the dominant social paradigm emphasizes individualism, entrepreneurial effort, and economic growth. The postures of the justices in the Court’s environmental cases often reflect the influence of these paradigms. Conservatives such as Chief Justice Roberts and Justices Scalia, Thomas and Alito tend to align in environmental cases with the dominant paradigm; liberals such as Justices Ginsburg, Kagan and Sotomayor with the ecological. In the middle are Justice Kennedy, a conservative who has nevertheless been responsive to the ecological model in important cases, and Justice Breyer, a liberal who has expressed concern about extending environmental protections regardless of costs, as in his separate opinions in Whitman v. American Trucking Associations, Inc. and Entergy Corp. v. Riverkeeper, Inc.
Justice Scalia’s opinion for the Court argued that “reasonable regulation ordinarily requires paying attention to the advantages and disadvantages [i.e., costs] of agency decisions.” (Scalia pointedly cites Breyer’s concurring opinion in Entergy here.) Against a backdrop of the potential for burdensome and inefficient regulation, “appropriate and necessary” could not reasonably be read “as an invitation to ignore costs.” That the agency did prepare and consider a cost-benefit analysis in the standard-setting phase did not salvage the validity of the threshold determination. Costs were relevant at both stages. As he did in his opinion for the Court in Entergy, Justice Scalia walked back the potentially expansive holding in American Trucking, which ruled that the Clean Air Act prevented consideration of costs in setting National Ambient Air Quality Standards; that decision, he wrote, stands only for “the modest principle” that EPA is not allowed to consider costs where Congress has used language that excludes them.
Justice Kagan’s dissent (joined by Justices Ginsburg, Breyer and Sotomayor) agreed with the majority that rational regulation is generally not cost-blind: “absent a contrary indication from Congress” regulatory agencies must take costs into account. But she differed from the Court in arguing that EPA’s consideration of costs in the standard-setting phase satisfied the requisites of reasonableness. EPA’s cost-benefit analysis for the standards showed that the benefits (including the co-benefits of further reductions in particulate matter emissions) outweighed the costs by a factor of three to nine – a reasonable return indeed.
Michigan v. EPA suggests a presumption, adhered to unanimously by the Court, that where Congress has not specifically addressed consideration of costs, agencies are required to consider them, because it would be unreasonable for them not to. Only where Congress has evidenced its intent to preclude consideration of costs (the narrow niche to which American Trucking is now confined) are agencies free to ignore them. Apart from the specific issues in the case, this is a significant development in the Court’s approach to regulatory review. With both factions presuming that costs should be considered, the issue was not whether but when.
On March 25, 2015, the Supreme Court heard 90 minutes of argument in Michigan v. EPA, No. 14-46. Briefing and argument focused on one aspect of EPA’s Mercury and Air Toxic Standards (MATS) Rule: whether EPA unreasonably refused to consider costs in determining if it is appropriate to regulate hazardous pollutants emitted by electric utilities. If you were unable to attend the argument but want to know more about it than you can learn from the press reports, then this “Advice from Air Act Andy” column is for you.
Question: Based on questions asked by the Justices during argument, many predict this will be a 5-4 decision, with Justice Kennedy possibly casting the deciding vote. What do you think?
Air Act Andy: I will preface my answer with the disclosure that a year ago I told my client there was virtually no chance the Court would choose to hear the MATS case. With my prognostication credentials thus firmly established — and keeping in mind that it is unwise (and usually embarrassing) to predict what the Court will do based on the questions asked at oral argument — let me say only that I came away from the argument sensing a 4-3-2 split in the Court. I leave it to you, gentle reader, to infer more.
Question: Did Justice Breyer and his clerks spend endless hours hypothesizing scenarios for how EPA might have taken costs into account in developing the MATS Rule?
Air Act Andy: Without speculating on how many hours Justice Breyer and his clerks spent thinking about this, I note that he arrived at argument armed with a long list of questions suggesting he was troubled by the idea that EPA might regulate hazardous air pollutant emissions from electric utilities without any consideration of costs. In particular, he asked whether costs had been, or could be, considered in the subcategorization of electric generating units, even if costs were not considered in EPA’s initial listing of those sources.
Question: What did the parties make of Justice Breyer’s focus on subcategorization?
Air Act Andy: I don’t have to speculate here. The government made enough of Justice Breyer’s questions that, one day after argument, the Solicitor General filed a letter with the Court to provide information relevant to “questions pertaining to how EPA assesses whether to establish subcategories of sources” under the pertinent provisions of the Clean Air Act.
Question: Isn’t it unusual to submit a post-argument letter to the Court?
Failing to demonstrate that coal-fired [electric generating units] are different based on emissions, the commenters turn to economic arguments, asserting that failing to subcategorize will impose an economic hardship on certain sources. Congress precluded consideration of costs in setting [technology standard] floors, and it is not appropriate to premise subcategorization on costs either.
Question: On a more personal note, was your trip to the Court less eventful than the last time you were there?
Air Act Andy: Ah, you are referring to my December 11, 2013 visit to the Court. On that snowy day, I arrived at the Court wearing a long, stylish gray cardigan sweater instead of a suit jacket. I was stopped by guards and politely told I would not be allowed to sit in the section reserved for members of the Supreme Court Bar unless I replaced my fashionable sweater with a suit jacket. Someone from the clerk’s office, acting like a fine restaurant’s maitre d’, swiftly provided me with a ladies suit jacket and allowed me into the courtroom. But when I returned to the Court last month to hear argument in Michigan v. EPA, I was not treated like a fashion felon. Instead, Court staff personally escorted me into the courtroom a half hour before anyone else from the public was allowed in the room, gave me a prime seat, and allowed me to sit quietly and take in the majesty of the room.
Question: What is the reason for the different treatment?
Air Act Andy: Last month, I arrived wearing a foot cast instead of a gray cardigan. I had broken my foot the week before, and the Court’s wonderful staff gave me permission to arrive and get seated early.
Question: So, was it worth it to have a broken foot?
Air Act Andy: I wouldn’t recommend that you drop granite on your foot a week in advance of a trip to the Supreme Court, but being able to sit by myself in the courtroom for a half hour before others were admitted was pretty special.
However, what most fascinated me about the entire episode was not Scalia’s initial mistake, but the Court’s procedures for correction. The only reason the public knew about this particular correction was because Justice Scalia’s initial error had been so widely publicized, which was what in turn led me and others to spot the correction and publicize that as well. Otherwise, the correction was made entirely without the Court itself providing any notice. The slip opinion that appeared on the Court’s website was simply different from the one appearing the very next morning.
I was likely more focused on the Court’s process for correction because at that very moment, I had just completed a law review article on the Court’s longstanding, but wholly unappreciated, practice of revising slip opinions in just this kind of clandestine manner. And, not just dissenting opinions as in EME Homer, but also majority opinions of the Court. The Court has literally always done this sort of thing, although no one had ever called them out on it.
I first became aware of the practice as a lawyer for the U.S. Department of Justice in 1987 when, at EPA’s prompting, we urged the Court to correct a “mistake” in its original slip opinion in International Paper Co. v. Ouellette, a significant Clean Water Act case, because of EPA’s concern that certain language in that opinion mischaracterized the role of citizen suits. At our client’s urging, my then-boss, the Solicitor General, formally notified the Court of this “formal error” and the Court changed the language, precisely as we recommended, to eliminate the issue. As a result, the language appearing several years later in the bound volume of the U.S. Reports differed substantively from the original slip opinion language. No notice of this change was given, including to any of the parties in the case. The U.S. had participated as an amicus.
In my partial defense, not only did the necessary archival research require significant work over an extended time period, but the topic invariably took a backseat to other, seemingly more pressing, topics on which I was engaged. In all events, the final article is now available here, and includes discussion of EME Homer, International Paper Company, and other environmental cases.
What Would Leon Billings Think?
Almost as soon as U.S. Supreme Court Justice Scalia joined the bench in the fall of 1986, he made clear his disdain for arguments that the meaning of statutory text could be gleaned from its legislative history. And advocates before the Court who made the mistake of equating “congressional intent” with a statement made by an individual member of Congress during a hearing or a colloquy on a chamber floor could expect a sharp rebuke from the Justice.
The debate at the Court about the proper role of legislative history in statutory construction was not fully joined, however, until 1994 when Justice Stephen Breyer joined the bench. From the outset, Breyer, a former Senate staffer, made equally plain his view that legislative history was both fair game and could be highly relevant.
Indeed, Scalia’s and Breyer’s contrasting views regarding textualism in both statutory and constitutional interpretation became so celebrated that they literally took their debate on the road. To be sure, theirs was a far cry from the Lincoln-Douglas Debates on slavery 150 years earlier, but for legal scholars and Supreme Court observers, it was High Court entertainment.
During the oral arguments last month before the Supreme Court in Utility Air Regulatory Group v. EPA, Justice Breyer managed to take the debate to yet a new level. The issue before the Justices concerned the lawfulness of EPA’s regulations applying the Clean Air Act’s Prevention of Significant Deterioration Program to the emissions of greenhouse gases from new and modified stationary sources. As the Justices struggled to decipher the meaning of statutory terms and phrases that befuddle even seasoned environmental lawyers, Justice Breyer made a surprising reference. He did not merely ask what Senator Edmund Muskie, the bill’s chief sponsor, might have been intending in drafting the language at dispute before the Court. He asked what “Mr. Billings, I think, is the staff person” would have intended if faced with the policy issue that EPA now faced in trying to apply the language he drafted to greenhouse gases.
The Supreme Court courtroom was filled to capacity for the argument. Yet, I can probably safely say that fewer than ten, and likely fewer than five people in the room had any idea to whom the Justice was referring. And those few most certainly did not include any of the Justice’s colleagues on the bench or any of the advocates before him.
But for a few of us, who thrive on environmental law’s history, it was a moment of glory. The Justice was referring, of course, to Leon Billings who was Senator Ed Muskie’s chief staffer for the drafting of almost all of the nation’s path-breaking environmental laws during the 1970s, including, as the Justice correctly surmised, the Clean Air Act of 1970. The statutes were revolutionary in their reach, as they sought no less than to redefine the relationship of human activities to the nation’s environment.
Not relying merely on the soaring rhetoric of a law like the National Environmental Policy Act, these new pollution control laws got into the nitty-gritty of lawmaking. They addressed the extent to which costs, benefits, risk assessment, scientific uncertainty, and technological availability should all be relevant in determining the pollution control standards. They brokered compromises across partisan divides and remained nonetheless exceedingly ambitious and demanding in their reach.
The nation, more than four decades later, has reason to be grateful for the work of former congressional staffers like Leon Billings. Their impressive work lies in sharp contrast to that of Congresses over the past twenty plus years, which have passed no comparably significant environmental laws and done little more than deepen partisan divides even further. For that reason, the Supreme Court shout-out to “Mr. Billings” was a great moment at the Court. And the Justice’s question an apt one too.

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