Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA
Released: 2017-03-08T00:00:00

O n October 23, 2015, the U.S. Environmental Protection Agency (EPA) published its final Clean Power Plan rule (CPP or Rule) to regulate emissions of greenhouse gases (GHGs), specifically carbon dioxide (CO 2 ), from existing fossil fuel-fired power plants. The goal of the Rule, according to EPA, is to help protect human health and the environment from the impacts of climate change. The CPP has been one of the more singularly controversial environmental regulations ever promulgated, and the controversy is reflected in the enormous multi-party litigation over the Rule in the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit). Numerous petitions challenging the Rule have been consolidated under the caption West Virginia v. EPA . While the litigation is still ongoing at the circuit court level, an interlocutory—that is, mid-litigation—application to the Supreme Court resulted in a stay, or pause, of the Rule.

This report provides legal background on the Rule, its Clean Air Act (CAA) framework under Section 111, and some of the main climate-related lawsuits that have preceded the present litigation over the CPP. It then gives an overview of the participants in the litigation, including Members of Congress, who have offered briefs in support of both sides. This report explains the major events in the litigation as of the date of publication, including the Supreme Court stay and the D.C. Circuit oral argument, and the expected schedule of events in the near term. It then presents condensed summaries of some of the main arguments on the merits. This report concludes with a brief look at parallel litigation in the D.C. Circuit that is challenging a related EPA regulation, which limits GHG emissions from new, modified, and reconstructed power plants.

Legal Background of the Clean Power Plan Rule

Climate Litigation Under Other Provisions of the Clean Air Act

The CAA encompasses a number of program authorities, all with the general aim of protecting human health and the environment from emissions that pollute ambient air. Debate over the use of the CAA to regulate GHG emissions has its origins at least as far back as 1999, when several groups filed a petition urging EPA to regulate GHG emissions from new motor vehicles and motor vehicle engines under CAA Section 202. EPA denied the petition in 2003 after soliciting public comments. Shortly thereafter, some of the groups were joined by 12 states and others in filing a petition for review of EPA's decision in the D.C. Circuit. The D.C. Circuit, in a fractured opinion, deferred to EPA's denial of the petition. On appeal, however, in its 2007 decision in Massachusetts v. EPA , a five-Justice majority of the Supreme Court held that EPA has statutory authority to regulate GHG emissions under CAA Section 202(a)(1), which requires the EPA Administrator to set emission standards for "any air pollutant" from motor vehicles "which in his judgment cause[s], or contribute[s] to" air pollution which "may reasonably be anticipated to endanger public health or welfare." GHGs, the Court said, unambiguously fell within the broad definition of "air pollutant." The Court also found that EPA had acted arbitrarily and capriciously in explaining its denial of the petition.

Citing the Massachusetts v. EPA decision, EPA issued an "endangerment" finding and a "cause or contribute" finding in December 2009. These findings formed the basis for the light-duty vehicle GHG emission standards and corporate average fuel economy (CAFE) standards issued jointly by EPA and the National Highway Traffic Safety Administration (NHTSA) in 2010.

In 2011, in American Electric Power Co. v. Connecticut (" AEP "), the Supreme Court unanimously held that EPA's authority to regulate GHG emissions under the CAA—including its power under Section 111(d), the basis of the CPP—displaced any common law tort or nuisance claims against power plants and other GHG emissions sources. The Court in AEP explicitly ruled that "air pollutant" includes GHGs when applied to power plants under Section 111, as under Section 202 for motor vehicles. The Court concluded that federal judges may not set limits on GHG emissions because the CAA "empower[s] EPA to set the same limits," and therefore did not allow the plaintiffs, including states, to proceed with their lawsuits against power plant operators.

With GHGs being regulated under CAA Section 202, EPA proceeded with regulating GHGs under other CAA authorities for stationary sources. In particular, EPA interpreted the mobile source GHG regulations as triggering regulations under the Prevention of Significant Deterioration (PSD) program. The PSD program generally requires new or modified stationary sources that will emit threshold amounts (250 or 100 tons per year depending on the type of source) of air pollutants subject to regulation under the CAA to obtain permits and comply with emissions limitations that reflect the "best available control technology" (BACT). EPA likewise sought to regulate GHGs under the Title V permit program. Title V requires permits for "major sources" with the potential to emit 100 tons per year of any air pollutant. As EPA noted, GHG emissions tend to be "orders of magnitude greater" than emissions of other types of air pollutants, so the statutory thresholds would have swept in many smaller sources not previously subject to CAA permitting. EPA addressed this by issuing a "tailoring rule," structured to phase in GHG permitting under the PSD and Title V programs first for "anyway" sources already subject to permitting for other air pollutants, and then to non-anyway sources meeting higher thresholds.

In 2014, in Utility Air Regulatory Group v. EPA (" UARG "), the Supreme Court rejected EPA's interpretation of the "triggering" provisions for the stationary source programs; it held that EPA cannot regulate a power plant solely due to its GHG emissions, striking down EPA's "tailoring" rule. Justice Scalia, writing for a five-Justice majority of the Court, stated the following:

EPA's greenhouse-gas-inclusive interpretation of the PSD and Title V triggers … [is] unreasonable because it would bring about an enormous and transformative expansion in EPA's regulatory authority without clear congressional authorization. When an agency claims to discover in a long-extant statute an unheralded power to regulate "a significant portion of the American economy," we typically greet its announcement with a measure of skepticism.

On the other hand, in a part of the decision joined by seven Justices, the Supreme Court affirmed EPA's authority under the CAA to require Best Available Control Technology (BACT) to regulate GHG emissions from power plants if the source is regulated for other air pollutants, holding EPA's interpretation of such requirements reasonable. In sum, UARG held that EPA "may not treat greenhouse gases as a pollutant for purposes of defining a 'major emitting facility' … in the PSD context or a 'major source' in the Title V context.... EPA may, however, continue to treat greenhouse gases as a 'pollutant subject to regulation under this chapter' for purposes of requiring BACT for 'anyway' sources." As a practical matter, UARG affirmed EPA's ability to regulate roughly 83% of U.S. stationary-source GHG emissions under PSD and Title V permitting programs, and struck down its ability to regulate the additional 3% that would have been reached had the tailoring rule been upheld.

Clean Air Act Section 111

In 2011, EPA finalized a settlement agreement with states and others to promulgate New Source Performance Standards (NSPSs) for GHG emissions from fossil fuel-fired power plants under Section 111(b) of the CAA, and emission guidelines covering existing power plants under Section 111(d). President Obama also directed EPA to issue GHG regulations under Section 111(b) and 111(d) in a presidential memorandum issued in June 2013.

As characterized by EPA, Section 111 operates to address one of three "general categories of pollutants emitted from existing stationary sources," the other two being (1) "criteria" air pollutants under the National Ambient Air Quality Standards (NAAQS) program under CAA Sections 108-110; and (2) "hazardous air pollutants" (HAP) under the National Emission Standards for Hazardous Air Pollutants (NESHAP) program under CAA Section 112. Section 111 addresses "air pollution which may reasonably be anticipated to endanger public health or welfare." Section 111 directs EPA to list categories of stationary sources that cause or contribute significantly to such air pollution; to establish NSPSs for new sources within any such category; and then to issue a "procedure" requiring states to submit plans that establish standards of performance for existing sources in a category, under certain conditions. In other words, NSPSs under Section 111(b) may trigger what EPA terms "emission guidelines" under Section 111(d). Portions of CAA Section 111 primarily relevant to the CPP litigation are excerpted below (with indentations and bracketed notations added for readability):

(a) Definitions. For purposes of this section:

(1) The term "standard of performance" means a standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction [BSER] which (taking into account the cost of achieving such reduction and any non-air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.

…

(3) The term "stationary source" means any building, structure, facility, or installation which emits or may emit any air pollutant....

…

(b) (1) (A) The Administrator shall … publish (and from time to time thereafter shall revise) a list of categories of stationary sources. He shall include a category of sources in such list if in his judgment it causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.

(B) Within one year after the inclusion of a category of stationary sources in a list under subparagraph (A), the Administrator shall publish proposed regulations, establishing Federal standards of performance [i.e., NSPSs] for new sources within such category....

…

(d) (1) The Administrator shall prescribe regulations which shall establish a procedure similar to that provided by section [1]10 of this title [which provides for State Implementation Plans for NAAQS] under which each State shall submit to the Administrator a plan which

(A) establishes standards of performance for any existing source for any air pollutant

(i) for which air quality criteria have not been issued or which is not included on a list published under section [1]08(a) …

[From this point, there is dispute in the litigation regarding how subparagraph (i) continues; the House-originated amendment, which appears in both the U.S. Code and the Statutes at Large , ends subparagraph (i) with " or emitted from a source category which is regulated under section [1]12 " while the Senate-originated amendment, which appears only in the Statutes at Large and not the U.S. Code , ends subparagraph (i) with " or section [1]12(b) " ]

but

(ii) to which a standard of performance under this section would apply if such existing source were a new source, and

(B) provides for the implementation and enforcement of such standards of performance.

Regulations of the Administrator under this paragraph shall permit the State in applying a standard of performance to any particular source under a plan submitted under this paragraph to take into consideration, among other factors, the remaining useful life of the existing source to which such standard applies.

(2) The Administrator shall have the same authority—

(A) to prescribe a plan for a State in cases where the State fails to submit a satisfactory plan as he would have under section [1]10(c) of this title in the case of failure to submit an implementation plan, and

(B) to enforce the provisions of such plan in cases where the State fails to enforce them as he would have under sections [1]13 and [1]14 of this title with respect to an implementation plan....

An analysis by the American College of Environmental Lawyers observed that since the 1970s, EPA has promulgated emission guidelines under Section 111(d) of the CAA on seven occasions (as well as six additional occasions in conjunction with the requirements of CAA Section 129, which the 1990 CAA amendments added to specifically require Section 111 NSPS and emission guidelines meeting certain requirements for solid waste incinerators). Air pollutants and source categories for which EPA has issued emission guidelines under Section 111(d) include, among others, methane and non-methane compounds from large landfills; acid mist from sulfuric acid production units; fluoride emissions from phosphate fertilizer plants; reduced sulfur emissions from kraft pulp mills; and fluoride emissions from primary aluminum plants. In addition, EPA's 2005 Clean Air Mercury Rule (CAMR) delisted coal-fired power plants from CAA Section 112 and, instead, established a cap-and-trade system for mercury under Section 111(d); the D.C. Circuit vacated CAMR in 2008 on grounds unrelated to its cap-and-trade structure.

EPA finalized Section 111(b) NSPSs for GHG emissions from new, modified, and reconstructed power plants at the same time as the Clean Power Plan. As discussed below, these NSPSs, which must apply for the CPP under Section 111(d) to have effect, are also being challenged in the D.C. Circuit.

Overview of Clean Power Plan

EPA published the proposed "Carbon Pollution Emission Guidelines for Existing Electric Utility Generating Units" on June 18, 2014. The Agency conducted significant outreach to interested parties before the Rule's proposal. EPA continued its outreach after the proposal and held several public hearings and received more than 4.3 million public comments, the most ever for an EPA rule. The CPP, as it became known, was finalized on August 3, 2015, and published in the Federal Register on October 23, 2015.

Several Congressional Review Act (CRA) resolutions of disapproval were introduced following receipt of the CPP by Congress, including S.J.Res. 24 , which was passed by the Senate on November 17, 2015, and by the House on December 1, 2015. President Obama vetoed S.J.Res. 24 on December 18, 2015. Other resolutions and bills have been introduced both for and against EPA regulation of GHGs from power plants.

The CPP is a detailed rule with many definitions and provisions not touched on here, many of which are the subject of specific challenges or defenses in the present litigation. This report provides only a basic summary as context for the following discussion of the litigation challenging the Rule. For more information on the CPP, see CRS Report R44341, EPA's Clean Power Plan for Existing Power Plants: Frequently Asked Questions , by James E. McCarthy et al., and CRS Report R44145, EPA's Clean Power Plan: Highlights of the Final Rule , by Jonathan L. Ramseur and James E. McCarthy.

General Structure

Applying CAA Section 111, EPA determined the "best system of emission reduction" (BSER) for affected electric generating units based on three components, or as EPA calls them, "building blocks":

1. heat rate (i.e., efficiency) improvements at affected power plants, 2. generation shifts among affected power plants (particularly from coal generation to natural gas combined cycle generation), and 3. increased use of renewable energy for electricity generation.

EPA then used the BSER to derive national emission performance rates for each of the two subcategories of power plants affected by the Rule:

1. fossil fuel-fired electric steam generating units, of which coal generation accounts for 94%—oil and natural gas contribute the remainder—and 2. natural gas combined cycle (NGCC) units.

Then, EPA calculated state-specific targets by applying the national rates to each state's baseline generation mix.

States could reach their targets without needing to "comply" with the assumptions in the "building blocks" or the subcategory-specific rates, which are not themselves binding. In general, policies to reach the state-specific targets set by EPA would be determined by state plans. States could use an emission-standards approach or a "state measures" approach and, under the latter, could submit multi-state plans or use a variety of other policies or programs. In addition, state plans could measure compliance using an emission rate target, measured in pounds of CO 2 per megawatt-hour (MWh) of electricity, or a mass-based target, measured in tons of CO 2 . The CPP also requires state plans to include certain other components and considerations, such as electric reliability.

EPA cannot legally compel a state to submit a Section 111(d) plan. Rather, if a state fails to submit a satisfactory plan by EPA's deadline, CAA Section 111(d) authorizes EPA to prescribe a federal plan for the state. This authority is the same, Section 111(d) says, as EPA's authority to prescribe a federal implementation plan when a state fails to submit a state implementation plan to achieve the NAAQS. EPA published a proposed federal plan for existing power plants, along with models for state plans, at the same time it published the final CPP.

Timeline

The CPP, as promulgated, set a deadline of September 6, 2016, for each state to submit an implementation plan to EPA (or face EPA imposition of a federal plan on sources in the state). In lieu of a completed plan, the CPP authorized a state to make an initial submittal by that date and request up to two additional years to complete its submission. In light of the stay issued in conjunction with the pending litigation challenging the rule, these near-term deadlines lack legal effect. If the Rule is ultimately upheld, then new initial compliance deadlines would have to be set thereafter.

The eight-year interim compliance period for the CPP, as promulgated, begins in 2022 and runs through 2029. The interim period is separated into three steps (2022-2024, 2025-2027, and 2028-2029), each with its own interim goal. Under this timeline, affected power plants would have to meet each of the first, second, and third steps' CO 2 emission performance rates or follow an EPA-approved emissions reduction trajectory designed by the state itself for the eight-year period from 2022 to 2029. The CPP, as promulgated, requires compliance with the state's final goal by 2030. If the Rule is upheld, it is possible that some or all of these later compliance dates could be delayed or adjusted as well.

Prior Litigation Challenging the Clean Power Plan

Challenges to the CPP began well before the final Rule was published in the Federal Register . For example, when the Rule was proposed in 2014, Murray Energy Corporation (a coal company) and the states of West Virginia, Alabama, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, and Wyoming filed petitions for review in the D.C. Circuit. They made several arguments in the alternative: that the court had authority to, and should, issue an extraordinary writ under the All Writs Act; that EPA's public statements about its legal authority to regulate CO 2 emissions constituted final agency action subject to judicial review; and that the court should strike down the 2011 settlement agreement that EPA reached with several other States and environmental groups setting a timeline for deciding on Section 111 rules for power plants. A panel of the D.C. Circuit rejected these arguments and denied the petitions, saying the following:

Petitioners are champing at the bit to challenge EPA's anticipated rule restricting carbon dioxide emissions from existing power plants. But EPA has not yet issued a final rule. It has issued only a proposed rule. Petitioners nonetheless ask the Court to jump into the fray now. They want us to do something that they candidly acknowledge we have never done before: review the legality of a proposed rule.... We do not have authority to review proposed agency rules.

Oklahoma also sued to challenge the proposal in federal district court in Oklahoma and did not prevail; the 10 th Circuit denied Oklahoma's motion for an injunction pending appeal.

States and energy companies also filed emergency petitions for an extraordinary writ in the D.C. Circuit in August 2015, after EPA had released, but not published, the final CPP. A circuit panel again denied these petitions on September 9, 2015. Petitions for panel reconsideration and for rehearing en banc to essentially revive the earlier lawsuits challenging the proposed rule were denied as well, on September 29, 2015.

West Virginia v. EPA and Consolidated Cases

Participants in the Litigation

The Petitioners and Others Opposing the Clean Power Plan

Parties began filing petitions in the D.C. Circuit challenging the final CPP starting on the day the Rule was published in the Federal Register , October 23, 2015. CAA Section 307(b) requires that such petitions for review must be filed in the D.C. Circuit within 60 days after the Rule's publication in the Federal Register . The deadline for petitions for review of the CPP was therefore December 22, 2015.

Parties that filed petitions challenging the CPP include 26 states. West Virginia and Texas spearheaded a coalition of 24 state petitioners in filing the lead case. Oklahoma, North Dakota, and Mississippi filed their own petitions. The state of Nevada, while not a petitioner, filed a brief supporting the petitioners, raising the number of states opposing the CPP to 28. On March 7, 2017, the court granted North Carolina's motion to withdraw as a petitioner. See Figure 1 . Other petitioners challenging the Rule include three labor unions, a number of rural electric cooperatives and an association representing them, more than two dozen industry and trade groups, several nonprofit public policy organizations, and more than two dozen fossil-fuel-related companies and local electric utilities. Other fossil-fuel-related companies have moved to intervene on behalf of the petitioners. In all, more than 100 parties filed dozens of petitions challenging the CPP. All of these petitions have been consolidated into one case, captioned West Virginia et al v. EPA et al . All petitioners jointly filed two briefs on the merits.

In addition, various amici curiae (non-party "friends of the court") have filed briefs on the merits in support of the petitions challenging the Rule. These include a brief filed by Members of Congress, as discussed below. Also among those who filed briefs as amici curiae are a group of scientists; 166 state and local chambers of commerce and other business associations; several legal foundations; electric utilities; former Public Utility Commissioners; and groups representing women, minorities, seniors, and taxpayers. In total, one intervenor brief and 12 amicus briefs were filed in support of the petitioners opposing the CPP.

The Respondents and Others Supporting the Clean Power Plan

Respondents are EPA and its current Administrator, Gina McCarthy, in her official capacity. Parties that have intervened in this case in support of respondents include a coalition of 18 states, the District of Columbia, and five other cities and a county (including some in states that have filed petitions challenging the CPP). Other parties intervening in support of the CPP include regional, state, and municipal utilities and power companies; more than a dozen nonprofit organizations (including environmental organizations); and several energy industry associations.

Two former EPA Administrators are supporting the CPP as amici curiae: William Ruckelshaus, who headed the agency in 1970, when the CAA was enacted, and again in the 1980s; and William Reilly, the EPA Administrator at the time Congress passed the Clean Air Act Amendments of 1990. Former Secretaries of State and Defense and a Career Diplomat for the State Department also filed a brief supporting the CPP as amici curiae, as did a policy institute; a coalition of medical groups; scientists; grid experts; companies and business and labor groups; faith groups; and a local government coalition comprising the National League of Cities, the U.S. Conference of Mayors, and 54 other cities and localities. As discussed below, Members of Congress also filed a brief in support of the CPP. In total, four intervenor briefs and 18 amici curiae briefs were offered in support of the CPP.

Four states have not joined the litigation: Alaska (for which EPA did not set a goal in the final Rule), Idaho, Pennsylvania, and Tennessee.

Members of Congress

Large groups of Members of Congress have filed amici curiae briefs on both sides of the litigation. A brief opposing the CPP was joined by 34 current Senators and 171 current Representatives in the 114 th Congress. The brief argues, among other things, that Congress excluded power plants regulated under CAA Section 112 from "concurrent regulation" under Section 111(d) and that EPA "usurped the role of Congress" through the CPP's "expansive regulatory requirements." A brief in support of the CPP was joined by 44 current and former Senators and 164 current and former Representatives; it argues, among other things, that Congress conferred "broad authority" on EPA in the CAA to help the agency achieve the act's broad anti-pollution objectives, and that the CPP is "consistent with the text, structure, and history" of the CAA.

Major Events in the Litigation

Stay Motions and Scheduling Motions Before the Circuit Court Panel

Many petitioners filed motions to stay the CPP alongside or soon after their petitions for review. Briefing on the stay motions concluded in late December 2015.

On January 21, 2016, the D.C. Circuit panel comprising Judges Srinivasan, Rogers, and Henderson issued an order denying the petitioners' motions to stay the CPP for the duration of the litigation. The court's per curiam order denying the motions to stay did not detail the court's reasoning, saying only that "[p]etitioners have not satisfied the stringent requirements for a stay pending court review." However, the case cited in the order, Winter v. Natural Resources Defense Council , as well as petitioners' stay motions and respondents' opposition briefs, measured the motions against the four traditional factors for a stay: (1) likelihood of success on the merits, (2) irreparable harm to the movant absent a stay, (3) lack of substantial harm to others if a stay is granted, and (4) public interest. Thus, the stay briefing previewed some of the legal and factual arguments on both sides, including arguments relating to the scope of EPA's authority and the reasonableness of EPA's decisions.

The circuit panel's January 21 order also resolved another matter that had been disputed by the parties: the timing and manner in which the litigation will proceed. The petitioners had jointly requested that the D.C. Circuit bifurcate what they deemed "fundamental issues of legal authority" from record-based challenges to programmatic elements, in order to expedite consideration of the former. The respondents and respondent-intervenors opposed the petitioners' scheduling proposal, urging that the case be briefed and argued in one round addressing all issues. The circuit court's order rejects bifurcation of the case into two phases as requested by petitioners; the order does, however, expedite briefing of the case in order to allow oral argument in the current term of the court. The panel ordered briefing on all issues to be completed in April 2016.

Supreme Court Order Staying the Clean Power Plan Rule

In a procedurally rare step, various state and industry parties applied to the Supreme Court in late January 2016 for an immediate stay of the Rule, though the circuit court's order was a preliminary decision in a case that is still pending. They submitted their applications to Chief Justice John Roberts, circuit justice for the D.C. Circuit, who referred the actions to the full Court. At the request of the Court, EPA and others provided response briefs in opposition to the applications.

The Court's response was likewise unusual: On February 9, 2016, the Supreme Court issued brief orders granting the applications and staying the Rule. The orders did not provide explanation. The stay pauses the CPP's legal effect while the Rule undergoes judicial review, and EPA may not enforce the Rule for the duration of the stay. (Nevertheless, some states are continuing to plan and prepare, to varying degrees, for the possibility that the Rule will eventually be upheld.)

The Court was split five to four, with Chief Justice Roberts and Justices Scalia, Thomas, Alito, and Kennedy granting the applications, and Justices Ginsburg, Breyer, Sotomayor, and Kagan in favor of denying the applications. The stay order was one of Justice Scalia's last votes on the Supreme Court. Justice Scalia's death on February 13, 2016, and the resulting current vacancy on the Court, will likely affect the course of the CPP litigation—although in ways that are uncertain at present.

The D.C. Circuit Court Oral Argument

The three-judge panel originally set to hear West Virginia v. EPA comprised Judge Sri Srinivasan, Judge Judith Rogers, and Judge Karen LeCraft Henderson. However, on May 16, 2016, the full D.C. Circuit ordered, "on the court's own motion, that these [consolidated] cases … be rescheduled for oral argument before the en banc court on Tuesday, September 27, 2016."

The Federal Rules of Appellate Procedure provide for hearings en banc in limited circumstances:

A majority of the circuit judges who are in regular active service and who are not disqualified may order that an appeal or other proceeding be heard or reheard by the court of appeals en banc. An en banc hearing or rehearing is not favored and ordinarily will not be ordered unless:

(1) en banc consideration is necessary to secure or maintain uniformity of the court's decisions; or

(2) the proceeding involves a question of exceptional importance.

The order was a surprise to many participants and observers. While the order delayed argument by almost four months, it is possible that the ultimate effect will be to expedite resolution of the litigation by essentially skipping the usual step of a panel decision.

The D.C. Circuit en banc court comprises 11 active judges. Two judges did not participate in the decision to hear the case en banc: Chief Judge Merrick Garland and Judge Nina Pillard. Reasons for recusal are generally not given and were not given in this instance. Judge Garland has not been participating in cases and matters while his Supreme Court nomination remains pending. It was unclear, however, why Judge Pillard recused herself from the initial decision to hear the case en banc.

On September 22, 2016 (five days prior to oral argument), the court issued a notice that Judge Pillard will participate in hearing argument. As a result, the en banc court that heard oral arguments in West Virginia v. EPA included 10 judges. For oral argument, the court focused on five main areas: (1) statutory issues related to state authority and electricity generation shifts among affected power plants and renewable energy providers; (2) different amendments affecting CAA Sections 111(d) and 112; (3) constitutional issues; (4) notice issues; and (5) record-based issues. The court had scheduled 3.5 hours of oral argument on these issues, but the argument on September 27, 2016, lasted about seven hours.

A Selection of Arguments on the Merits

Following the Supreme Court's stay, the CPP litigation continues in the D.C. Circuit. This report does not aim to provide a comprehensive or representative preview of the many, often nuanced legal arguments that have been presented to the court for or against EPA's CPP.

The sections below offer a few highly condensed examples, drawn from litigation filings and analyses of the oral arguments, to illustrate the range of issues and to give a flavor of some of the points raised. Arguments are generally summarized in the same order briefed, with petitioners and their allies having submitted the first round of briefs against the CPP, and respondents EPA and Administrator McCarthy and their allies having then responded in the CPP's defense.

Standard of Review

As a threshold matter, the parties debate the standards by which a court should evaluate EPA's interpretation and implementation of CAA Section 111. Under the framework of Chevron v. Natural Resources Defense Council, Inc. , a court reviewing an agency rule defers to the agency's interpretation of an ambiguous statute if the agency's interpretation is reasonable. In the 2014 UARG v. EPA decision, however, the Supreme Court opined that where a statutory interpretation by EPA "would bring about an enormous and transformative expansion in EPA's regulatory authority"—which some petitioners say the CPP would do—a court should demand "clear congressional authorization."

Petitioners emphasize this and other language from UARG . They also highlight language from King v. Burwell , the 2015 Supreme Court decision which, though it ultimately upheld the Affordable Care Act's insurance premium tax credits in all states, declined to give deference to the Internal Revenue Service's (IRS's) interpretation of that act because the IRS lacked "expertise in crafting health insurance policy…." Petitioners' position against applying deference in the CPP litigation is illustrated by the first paragraph of their initial merits brief's Introduction:

EPA … purports to have discovered sweeping authority in section 111(d) of the Clean Air Act—a provision that has been used only five times in 45 years—to issue a "Power Plan" that forces States to fundamentally alter electricity generation throughout the country.

But as the Supreme Court recently said, courts should "greet … with a measure of skepticism" claims by EPA to have "discover[ed] in a long-extant statute an unheralded power to regulate a significant portion of the American economy" and make "decisions of vast economic and political significance," [ UARG ], especially in areas outside an agency's "expertise," King v. Burwell .…

These arguments are echoed and further discussed in the briefs of several amici, as well as in the brief of the intervenors supporting the petitioners. The intervenors' brief also opposes Chevron deference on the grounds that the CPP is, in their view, an example of lawmaking, among other reasons.

Respondents, in contrast, argue for standard Chevron deference on statutory interpretation, and the likewise familiar "arbitrary and capricious" standard for review of agency actions under the Clean Air Act. With respect to Chevron deference, EPA expands on its argument within its defense of including generation-shifting within its selected "best system":

[T]he familiar two-step Chevron standard … fully applies to the interpretation of ambiguity that concerns the scope of an agency's regulatory authority.

Petitioners, citing King v. Burwell , claim that Chevron does not apply. They are wrong. The CAA clearly delegates to EPA authority to fill gaps in the Act concerning the appropriate amount of pollution reduction that should be obtained from long-regulated major pollution sources.... Unlike Burwell , this case involves EPA's construction of a statute that it has long administered and of provisions that go to the core of EPA's mission to protect public health and welfare.

… Petitioners construe UARG as obliterating the second step of Chevron in economically and politically significant cases. Under Petitioners' view, ambiguity in such cases must necessarily be resolved against the implementing agency's exercise of its regulatory authority …. But UARG does not nullify Chevron . UARG simply reflected one application of Chevron to particular facts, which are readily distinguishable from those here.…

A number of EPA's supporting intervenors and amici share the agency's emphasis on deference and "normal administrative law principles."

During the oral argument, the judges questioned whether the court should apply a heightened standard of review beyond the traditional Chevron deference, citing UARG as an example where the Supreme Court ruled that "[w]e expect Congress to speak clearly if it wishes to assign to an agency decisions of vast 'economic and political significance.'" The judges raised the "major questions" doctrine, citing King v. Bur w ell , in questioning if the CPP was of such "deep 'economic and political significance'" that the court should not presume that Congress delegated interpretive authority and defer to the agency's interpretation of CAA Section 111 unless Congress expressly did so. The court spent a significant portion of the oral argument on whether the CPP was "transformative" in terms of the Rule's impact on the power sector or the method in which EPA has chosen to regulate GHG emissions from power plants. The standard of review applied in this case will likely draw attention to the broader legal debate surrounding the application of Chevron deference to an agency's statutory interpretation.

Section 111(d) Scope of Authority

Petitioners focus much of their challenge on EPA's overall design of the CPP and, especially, its inclusion of electricity generation-shifting measures—exemplified by building blocks two and three, discussed above. They allege that this exceeds EPA's scope of authority under Section 111(d). Arguments that EPA cannot use Section 111(d) to regulate existing power plants at all because power plants regulated for hazardous air pollutants under Section 112 are discussed in the next section.

"Outside the Fenceline" Measures

Petitioners have argued that, for various reasons drawn from both statutory text and context, Section 111 authorizes EPA to require only measures that can be applied to the "performance" of an individual "source" (also known as measures "inside the fenceline"), such as adoption of pollution control devices or other design or operational standards. They say that Section 111 precludes generation-shifting from one type of electric generating unit to another, and does not authorize what they characterize as a reorganization of the nation's electric grid or states' energy economies. Petitioners also maintain that EPA "cannot require States to adopt as a 'standard of performance' reduction obligations that can be met only through non -performance by regulated sources," saying the CPP "does not involve a source improving its emissions performance when it generates, but instead consists of plants reducing or ceasing work, or nonperformance, as their production is 'shifted' to EPA-preferred facilities." During oral argument, the petitioners argued that power plants would be "subsidizing their competition" because the CPP effectively forces them to buy emission credits from renewable energy providers to meet their emission limits. In their view, EPA has "confuse[d] 'standards of performance' with other [air quality based] programs" in the CAA, such as the NAAQS or acid rain cap-and-trade program. This view is expanded on by various amici curiae, including the Members of Congress supporting the petitioners.

EPA wrote in the preamble to the final CPP that "the phrase 'system of emission reduction' … is capacious enough to include actions taken by the owner/operator of a stationary source designed to reduce emissions from that affected source, including actions that may occur off-site and actions that a third party takes pursuant to a commercial relationship with the owner/operator." In its brief, EPA states that "[t]he plain meaning of the word 'system' is expansive," that "statutory context makes clear that the word 'performance' refers to emissions performance, not production performance," and that the agency appropriately applied contextual constraints on BSER by, among other factors, limiting the CPP to actions taken by sources that result in emission reductions from sources. Altogether, EPA says, petitioners "posit limitations on EPA's discretion that are not compelled by the statute, and would frustrate the statutory objective to protect public health and welfare." Several of EPA's supporting intervenors and amici curiae generally agree; for example, intervenor power companies state that "[e]lectricity providers have been shifting generation among affected units and to zero-emitting sources as a means of achieving emission reductions for decades, as these strategies achieve greater reductions at lower cost than by relying on control technology alone."

Part of the oral argument focused on the definition of "system" with respect to BSER. Some of the judges questioned whether EPA's interpretation of BSER went beyond the Section 111(d) boundaries, while other judges noted that EPA's choice of generation-shifting as BSER was a reflection of what has already been demonstrated and implemented for the power sector.

Role of the Federal Energy Regulatory Commission

Petitioners also argue that another limitation on EPA's authority is the authority given by law to the Federal Energy Regulatory Commission (FERC), and that EPA's design of the CPP violates that limitation. They state: "Congress has clearly confirmed the States' plenary authority in this area and granted to a different agency—FERC—the limited federal jurisdiction in this sphere." A brief filed in opposition to the CPP by 18 former state Public Utility Commissioners also contends that the CPP is contrary to the Federal Power Act (FPA), in part because of what they deem EPA's "unprecedented" interpretation of the term "system" in CAA Section 111. They also describe the CPP's effects on states with different regulatory models (vertical integration, restructured, and municipal utilities and electric cooperatives).

EPA counters that the CPP "does not intrude on FERC's power under the Federal Power Act …. The Rule appropriately limits air pollution under the CAA. It does not regulate any kind of electricity sales or rates—interstate or intrastate. Thus, the dividing line between interstate and intrastate rate regulation addressed in the cases cited by Petitioners has no relevance here." EPA adds that it consulted with FERC and "participated in multiple FERC technical conferences." A group of former state environmental and energy officials, including Public Utility Commissioners, also filed a brief in support of the CPP, arguing in part that "[b]y design, the CPP respects and preserves the fundamental roles of grid operators and the jurisdiction of state regulatory bodies, including environmental agencies and Public Utility Commissions (PUC)."

Section 112 Exclusion

One core set of arguments in the CPP litigation relates to the interpretation of language in CAA Section 111(d)(1)(A), which sets forth exclusions to EPA's authority to issue Section 111(d) emission guideline rules. To understand the dispute, it is useful to briefly review the history of the subsection and its cross-reference to the hazardous air pollutant (HAP) program under CAA Section 112.

Prior to the CAA Amendments of 1990, Section 111(d) required EPA to prescribe regulations for states to submit plans establishing and implementing standards of performance for any existing source, for any air pollutant meeting two requirements: (1) the air pollutant must be one "for which air quality criteria have not been issued or which is not included on a list published under section [1]08(a) or [1]12(b)(1)(A) of this title," and (2) the air pollutant must be one to which a Section 111(b) NSPS would apply if such existing source were a new source. At that time, Section 112(b)(1)(A) described a process for listing HAPs. (Section 108(a) describes a process for listing "criteria" air pollutants; this cross-reference has not changed, nor has the second requirement.) Thus, for any air pollutant to which a Section 111(b) NSPS applied for new sources, EPA had to regulate the same pollutant under Section 111(d) for existing sources unless that air pollutant was already listed under the NAAQS or HAP programs.

In 1990, Congress made substantial amendments to CAA Section 112; among other changes, it replaced the former HAP listing process with a list of nearly 200 HAP, now contained in Section 112(b). In doing so, it made Section 111(d)'s cross-reference to Section 112(b)(1)(A) obsolete, as there was no longer an (A). Both the House and the Senate offered amendments to the cross-reference— both of which were included in the final legislation that was passed, signed into law by President Bush, and included in the Statutes at Large . Under the House-originated provision, the Section 111(d) authority applies for any air pollutant that "is not included on a list published under section [1]08(a) of this title or emitted from a source category which is regulated under section [1]12 of this title.... " The House-originated amendment was added to the U.S. Code by the House Office of the Law Revision Counsel. The Senate-originated 1990 amendment to CAA Section 111(d)(1)(A) simply excludes from Section 111(d) regulation any air pollutant "included on a list published under section [1]08(a) or [1]12(b).... " It is not in the U.S. Code .

Because power plants are a source category which is regulated under Section 112 for mercury and other HAP, petitioners and their supporters argue that EPA is barred from regulating power plants under Section 111(d) for CO 2 in any manner. Petitioners claim that EPA itself has previously given the U.S. Code text its "literal" meaning, and that "EPA's attempts to escape the literal reading of the exclusion are unavailing." In particular, they dispute EPA's "new assertions of ambiguity" and any reliance on the Senate-originated amendment, which they describe as an "erroneous 'conforming amendment.'" Petitioners also cite a footnote in the 2011 Supreme Court case AEP v. Connecticut , which said that "EPA may not employ [section 111(d)] if existing stationary sources of the pollutant in question are regulated under … § [1]12." Members of Congress who submitted an amicus curiae brief against the CPP further discuss the Section 112 exclusion and its legislative history, as did petitioners' intervenors, who further argue that EPA's interpretation violates constitutional principles of separation of powers.

EPA generally counters that it "reasonably interpreted" Section 111(d) and its exclusion language, "which is ambiguous in several respects[,] consistent with the Act's purpose, the statutory context, and the legislative history," as well as its own past rulemakings. The Agency states, among other things, that "Petitioners' interpretation of Section 111(d)—which would strip that provision of nearly all effect—is not reasonable, let alone mandatory," and that "when construing [the House-originated amendment] in a particular statutory context, one must take a 'commonsense' approach, and ask not only 'who' is regulated under Section 112 (i.e., source categories including power plants), but also 'what.'" Essentially, EPA interprets Section 111(d)(1)(A) to exclude from Section 111(d) regulation any HAP emitted from a source category regulated under Section 112; otherwise, it says, EPA would have to choose between regulating HAP or Section 111 air pollutants, leaving a "gap" and allowing the "unregulated emission of pollutants not listed as 'hazardous' or 'criteria,' but nonetheless dangerous to public health or welfare." In addition, EPA argues that it "properly considered" the Senate-originated amendment as a "clear indication of congressional intent when interpreting Section 111(d)," stating that "[i]t is black-letter law that the U.S. Code cannot prevail over the Statutes at Large when the two are inconsistent." EPA's supporters also weighed in on the Section 112 exclusion issue, including the current and former Members of Congress who filed an amici curiae brief supporting the CPP.

During the oral argument, the judges appeared to grapple with the two differing amendments of Section 111(d) and the complexity and ambiguity of the legislative history. Some judges questioned whether the distinction between "conforming" and "substantive amendments" was confusing the issue further. The judges' questions sought to find an interpretation that would give some effect to both amendments, while ensuring that the resulting interpretation would not create a "loophole" such that sources may evade regulation of certain pollutants.

Constitutional Issues and Canon of Constitutional Avoidance

Petitioners contend that the CPP violates the U.S. Constitution, and that CAA Section 111(d) must be interpreted more narrowly than EPA interprets it so as to avoid certain constitutional issues. For example, petitioners, including the 26 state petitioners opposing the CPP, claim that the CPP impermissibly invades traditional state police powers over the electrical grid and "commandeers" and "coerces" states and their officials and legislatures. They argue that it does so even with the federal implementation plan option:

In order to pass constitutional muster, cooperative federalism programs must provide States with a meaningful opportunity to decline implementation. But the Rule does not do so; States that decline to take legislative or regulatory action to ensure increased generation by EPA's preferred power sources face the threat of insufficient electricity to meet demand. The Rule is thus an act of commandeering that leaves States no choice but to alter their laws and programs governing electricity generation and delivery to accord with federal policy.

However, during the oral argument, some judges questioned whether the CPP was any different from other regulatory programs (such as the Americans with Disabilities Act) that impose certain provisions that require state action to implement.

Additionally, in arguing that the court should apply a non-deferential "clear statement" standard of review, petitioners cite D.C. Circuit precedent that "'[f]ederal law may not be interpreted to reach' areas traditionally subject to State regulation 'unless the language of the federal law compels the intrusion' with 'unmistakably clear … language.'"

Intervenors opposing the CPP expand on several constitutional arguments. In addition to federalism and Tenth Amendment claims, they state that "EPA's attempts to justify the Rule … trigger a separation-of-powers violation by usurping both the Legislative Branch's lawmaking power and the Judicial Branch's power to 'say what the law is.'" Constitutional arguments are also expanded on by the amici curiae Members of Congress, and by several of the legal groups and other amici opposing the CPP.

EPA, in contrast, defends the CPP as a "textbook example of cooperative federalism." EPA provides, among other reasons, that states can opt to do nothing, in which case the federal plan option imposes no new regulatory obligations on states. The state and municipal intervenors supporting EPA also support the CPP as a lawful implementation of EPA's obligations under the cooperative federalism structure of Section 111(d), saying, among other things, that "[t]he fact that state regulatory agencies will continue exercising their ordinary oversight over their electric utilities—including over decisions made by power plants to comply with a federal plan—does not mean the Rule commandeers States."

Several amici also dispute constitutional claims against the CPP, including the former EPA Administrators, whose brief describes their view how the CPP fits within the cooperative federalism model. The amici curiae Members of Congress supporting the CPP also counter separation of powers arguments, in part on the grounds that the CAA delegated discretion to EPA with "meaningful criteria" that EPA followed.

Other Arguments Regarding Federal and State Roles

Petitioners and their supporters also base federalism arguments on the text of the CAA. As stated in the brief submitted by 166 business associations, "Section 111(b) grants EPA authority to establish 'standards of performance' for new stationary sources; but Section 111(d) grants the States authority to establish those standards for existing sources. By displacing the authority reserved to the States in setting standards of performance for existing sources … EPA has violated the statute's unambiguous terms." In addition, as matter of federal law, in the words of the amici curiae brief filed by the Pacific Legal Foundation and others, "[s]ince at least 1964, the national electric power system has been characterized by a 'bright line' divide between federal authority over wholesale sales of power in interstate commerce, regulated by the federal government, and state authority over planning, siting, and providing generation resources to local customers."

EPA counters, among other things, that it does have authority under Section 111(d) and its long-standing regulations to establish a minimum level of stringency, and that the CPP still allows each state to set particular standards of performance for particular sources:

Under Section 111(d) …, the agency promulgates "guidelines" for states to follow when submitting "satisfactory" plans establishing emission standards for existing sources. While it is the states' job to establish such standards, those standards must "reflect[]" the "degree of emission limitation achievable through the application of the [BSER] … the Administrator determines has been adequately demonstrated." 42 U.S.C. § 7411(a)(1) (emphasis added [in brief]).

EPA and its supporters also argue, for example, that the CPP generally preserves the existing federal-state division of authority relating to the electrical grid.

Specific Record-Based Challenges

Petitioners jointly submitted two briefs on the merits: the first on "core legal issues" such as those described above, and the second on "procedural and record based issues." As summarized below, many issues within the latter set were also addressed by the amici curiae in support of petitioners. EPA and various of its supporters have largely disputed these procedural and record based challenges.

Achievability and Cost-Benefit Analysis

Petitioners maintain that EPA has not satisfied its legal burden to show that the BSER in the CPP, or its component building blocks, are "adequately demonstrated" or the resulting emission guidelines "achievable" as required under the definition of "standard of performance" in CAA Section 111(a)(1). They also argue that EPA failed to account sufficiently for reliability of the electrical grid or for the need to build new infrastructure, such as transmission lines. In addition, the petitioners oppose EPA's cost-benefit analysis for the Rule as "fundamentally flawed."

As a legal matter, they urge that the potential for states to opt for a multi-state emission credit trading program to meet plan requirements cannot "save" the Rule from these alleged deficiencies in achievability. Petitioners contend that achieving the required emission reductions is an "impossible task" for states. To support this argument, petitioners submitted a letter to the court on September 23, 2016 (four days before the oral argument), citing California's proposed state plan to implement the CPP that would limit trading to states that had plans as stringent as California's requirements. They claim that the proposed California plan that limits its carbon trading program may prevent robust trading systems from developing and shows that EPA has not demonstrated that states such as Montana, Kentucky, North Dakota, and West Virginia will be able to meet their reduction goals within their own borders. When petitioners raised the proposed California trading program during the oral argument, the judges noted that California's plan was still in the proposal phase and questioned whether these issues should be deferred until states experience such difficulties during planning and implementation.

A number of amici support these general arguments. For example, the brief of the 166 state and local business associations objects that the CPP would result in "devastating economic costs" and "decimate[]" some areas' employment and tax bases by raising costs of operation for American enterprise." Groups representing women, minorities, and seniors, as well as taxpayers, allege that price increases resulting from coal-fired power plant closures and new infrastructure and efficiency requirements would most heavily impact disadvantaged groups. Pedernales Electric Cooperative, which describes itself as "the largest non-profit electric distribution cooperative in the United States," frames the CPP's time frame as "unrealistic" and says that the CPP will have negative impacts on planning, reliability, and security, concerns echoed by the Municipal Electric Authority of Georgia (MEAG). MEAG also describes that it is subject to irrevocable long-term contracts based on specific power plants that will continue to impose payment obligations irrespective of the CPP, and says that adding on new contracts would force its communities to "pay[] twice" for electricity, resulting in negative environmental justice impacts.

EPA responds that it identified an achievable degree of emission limitation by applying the best system, framing its modeling and other analysis as reasonable and its estimates as conservative. EPA spends a substantial portion of its brief walking through its data and approach and working to counter petitioners' factual claims on those points. It also argues, among other things, that it was not required to perform individual plant achievability analyses. EPA states that achieving the emission rates would not require trading, though its analysis in the record demonstrates that trading programs are likely to be established. EPA also contends that it reasonably considered costs, infrastructure, and grid reliability, including specific concerns raised by rural cooperatives and others, and that it reasonably calculated and confirmed all of the state-specific goals. EPA cites extensively to its Rule preamble and technical supporting documents in the rulemaking docket.

Intervenors and amici supporting EPA expand on these arguments relating to the achievability of the emission standards and the evidentiary basis for the BSER. Power companies, including cities doing business through their utilities, maintain that EPA appropriately considered the availability of emissions credit trading programs, and deny that the Rule would impair electric reliability in light of the "tremendous flexibility" provided to states and power companies. Environmental and public health organizations also emphasize what they characterize as the "wide array of flexible compliance options," and explain their view that EPA reasonably applied the statutory factors to determine the degree of emission limitation required. A coalition of wind, solar, and other advanced energy associations spends much of its brief arguing that "[t]he record demonstrates that EPA's determination of the [BSER], and the Building Blocks in particular, was eminently reasonable," and that EPA reasonably considered other aspects of achievability. Comparable arguments are set forth in briefs submitted by, among others, former state environmental and energy officials. One brief, submitted by a trio of consumers' groups, aims to rebut empirical claims by petitioners and their amici regarding electricity costs, saying that consumer costs would not meaningfully increase and that, rather, the CPP would reduce electricity costs by improving efficiency.

State-Specific Objections to Aspects of the CPP

Petitioners contend that the CPP should have been tailored to individual state circumstances. Wisconsin challenges EPA's calculation of its baseline emissions in light of the imminent retirement of a nuclear plant; Arizona and Utah raise issues regarding EPA's accounting for trading between those states and Indian tribes; New Jersey argues that EPA failed to property take into account its deregulation of energy services; North Carolina argues that EPA arbitrarily excluded its emission reductions from consideration; Wyoming charges that EPA ignored its "unique circumstances"; and Utah argues that the CPP "would cause particular harm" to that state.

EPA generally counters these arguments one by one in its brief, saying overall that it reasonably calculated all state-specific goals and determined that all states would be able to develop compliant plans. EPA also states that it reasonably determined that pre-2013 generating facilities could not provide emission-rate credits.

During the oral argument, the judges suggested that these issues may be premature and that states will have future opportunities to seek judicial review if the reduction targets prove to be unachievable.

Industry-Specific Objections to Aspects of the CPP

A number of claims pertain primarily to certain industry sectors or subsectors. For example, petitioners claim that in the CPP, EPA "ignores" large parts of the nation's electrical system: "existing renewable energy, nuclear generation that provides approximately 20% of the nation's power with zero emissions, hydroelectric generation that supplies the majority of electricity in many regions of the country, co-generation units, and waste-to-energy facilities with very low carbon footprints." As a result, they say, EPA has "failed to consider an important aspect of the problem." They also object to what they characterize as the Rule's limitations on the use of enhanced oil recovery that also results in associated CO 2 storage, and its lack of different emission guidelines or compliance times for lignite coal-fired power plants.

EPA, in response, cites to the record and argues, among other things, that it adequately explained its treatment of hydropower, nuclear plants, and waste-to-energy facilities. EPA also insists that its limitations and reporting requirements for enhanced oil recovery are reasonable and do not change an oil recovery well's permitting status, and that it reasonably determined that no other subcategories of sources were necessary.

In addition to issues raised in the briefing in West Virginia v. EPA , several other petitions for review brought by entities including the National Alliance of Forest Owners, Biogenic CO 2 Coalition, American Forest & Paper Association, and American Wood Council are, at the request of the petitioners and EPA, being held in abeyance pending potential administrative resolution of biogenic GHG emissions issues in the CPP.

Procedural Challenges

Some challengers have disputed the adequacy of certain other procedural aspects of the issuance of the Rule under the CAA and the Administrative Procedure Act. Petitioners charge that the final CPP "could not have been divined from its proposal," and that "[b]y departing so radically from that proposal, EPA promulgated a Rule on which the public had no opportunity to comment."

EPA maintains that the final CPP is a logical outgrowth of the proposal and comments, and that EPA properly followed all other procedural requirements. EPA, moreover, criticizes petitioners and others for referencing sources and documents that were not made a part of the rulemaking record.

Similar to the state-specific record-based issues discussed above, the judges during oral argument questioned whether the notice issue was ripe for review because petitioners' administrative petitions for review were still pending before EPA. Petitioners argued that EPA had effectively denied their administrative petitions when the agency in its brief argued that it had given adequate notice.

Selected Additional Factual and Policy Issues Briefed by Amici Curiae

Finally, in addition to the many arguments made by the parties to the case, points raised in the briefs of amici curiae expand on the parties' arguments and bring other issues, perspectives, and facts to the court's attention. Again, this report does not aim to provide a comprehensive or representative preview of the many legal and factual claims in the CPP litigation. The many points raised by amici include, but are not limited to, the following points, which—like those previously discussed—have been highly condensed from their original forms.

Supporting Petitioners

The Pacific Legal Foundation and allies claim that EPA failed to make the required endangerment finding under CAA Section 111 and that EPA could not rely on the endangerment finding that it made in 2009 in the context of motor vehicles. They also insist that if EPA is to regulate GHGs, it may only do so through NAAQS under CAA Section 108, "the regulatory path Congress prescribed for air pollutants in the 'ambient air' emitted from 'numerous or diverse' sources." Groups representing seniors, minorities, and women argue, among other things, that "EPA's plans to incentivize investment in low-income communities will do nothing to help those facing immediate increases in electricity rates." A group of 13 scientists submitted a brief contending that the lines of evidence cited by EPA in support of its scientific conclusions on the dangers of GHGs and climate change have been "definitively invalidated by real world empirical temperature data," and that EPA's Social Cost of Carbon analysis is "nonsense that no rational person would use for public policy."

Supporting Respondents

Former officials Madeleine K. Albright, Leon E. Panetta, and William J. Burns assert that the CPP is "integral to continued U.S. leadership in the fight against climate change," having inspired other countries' commitments to emission reductions, and that "global warming is a national security issue." A brief of the Union of Concerned Scientists argues that the CPP "plays a key role in the worldwide implementation of the breakthrough Paris Agreement." Technology companies Amazon.com, Inc., Google Inc., Microsoft Corp., and Apple Inc. (for which former EPA Administrator Lisa P. Jackson is now Vice President of Environmental Initiatives) submitted a brief arguing that the CPP "will help Tech Amici—and countless other companies—power their operations in ways consistent with their environmental commitments and business needs." Several other consumer brand companies also highlight their environmental commitments and state that they would face "economic and social disruptions as a direct result of inaction on regulating power plant emissions." Forty-one Christian and Jewish faith groups provided a brief asserting "a moral imperative to protect the Earth and all its inhabitants from a climate crisis of our own making." A group of 20 scientists submitted a brief regarding the science of climate change, its impacts (particularly in the United States), and the contribution by combustion of fossil fuels. A coalition of public health groups filed another brief arguing that climate change, "caused by utility sector carbon emissions, has adverse human health impacts," especially on vulnerable populations, in light of impacts on heat, ozone, particulate matter, pollen, and microbial hazards.

Taken together, the briefs in the CPP litigation touch on not only legal and technical issues under CAA Section 111 and administrative law principles, but also broader policy debates regarding the environment, the economy, and governance.

Next Steps in West Virginia v. EPA

As noted above, oral argument was held on September 27, 2016. As a practical matter, the court may take some months after oral argument to issue a decision.

Once the D.C. Circuit issues a judgment, a dissatisfied party may seek Supreme Court review. Because of the high stakes of the case and because whichever side is dissatisfied with the result is likely to appeal (and indeed, parties from both sides could file cross-appeals of different aspects of the decision), the case is widely considered a near certainty to reach the Supreme Court, most likely in 2017 or 2018. The D.C. Circuit's decision to hear the case en banc in the first instance could potentially streamline the litigation and hasten Supreme Court review somewhat, relative to the initial and ordinary schedule in which a case must first be decided by a three-judge panel before any petitions may be filed for rehearing of the panel decision en banc.

North Dakota v. EPA: Section 111(b) Litigation

In addition to the direct legal challenge to the CPP rule for CO 2 from existing power plants under CAA Section 111(d), 25 states—led by North Dakota and West Virginia—have filed petitions in the D.C. Circuit challenging EPA's final NSPS rule for CO 2 from new, modified, and reconstructed power plants under CAA Section 111(b), which it calls the "Carbon Pollution Standards. " The states have been joined by other petitioners including a labor union, a rural electric cooperatives association, several other fossil-fuel-related companies and utilities, and several industry and trade groups; most of the petitioners overlap with those who also filed challenges to the CPP, although there are somewhat fewer petitioners challenging the NSPS. The petitions have been consolidated under the case caption North Dakota v. EPA . Most of the states and a number of the nonprofit organizations that intervened in support of EPA in the CPP case also intervened in the NSPS challenge in support of EPA.

In the Section 111(b) litigation, one of the primary issues is EPA's establishment of standards of performance based on technologies including carbon capture and sequestration/storage (CCS). Natural gas plants and modified coal plants can reach the final NSPSs with efficient generation technology, but new coal plants would need to implement partial CCS. Critics of the NSPSs for power plants say, for example, that CCS technology is not yet commercially available nor fully technically feasible, and therefore that it is not "adequately demonstrated" or the "best system" under Section 111(b). They also argue that EPA improperly relied on separate demonstrations of individual components of the technology, and that the NSPSs are otherwise arbitrary, capricious, an abuse of discretion, contrary to law, or unconstitutional. EPA, in the Section 111(b) final rule's preamble, argued that its Carbon Pollution Standards were reasonable and lawful. EPA provided rationales for basing the standard for new coal plants on partial CCS: It explained technical configurations and operational flexibilities that may be available; worked through its analyses of feasibility, cost, and other criteria; and discussed "alternative compliance options that new source project developers can elect to use, instead of … partial CCS, to meet the final standard of performance."

In addition to the D.C. Circuit litigation, petitions were filed before EPA seeking administrative reconsideration of the NSPS rule; EPA denied the petitions in May 2016. The D.C. Circuit suspended the briefing schedule in the North Dakota v. EPA case in June 2016 to allow the court to consolidate new lawsuits filed challenging EPA's denial of the petitions. On August 30, 2016, the court issued a revised briefing schedule to begin on October 13, 2016, with opening briefs and conclude by February 6, 2017. The court has scheduled oral arguments for April 17, 2017.

As noted above, the finalization of NSPSs for new air pollutant sources under Section 111(b) of the CAA is a prerequisite for the use of authority under Section 111(d) to regulate existing sources, so this litigation could threaten EPA's basis for the CPP. Thus, regardless of the outcome of West Virginia v. EPA , the litigation in North Dakota v. EPA potentially could impact the CPP as well.