West Virginia v. EPA

In a 6-3 decision, the U.S. Supreme Court held that Section 111(d) of the Clean Air Act did not give the U.S. Environmental Protection Agency (EPA) the authority to use “generation-shifting” measures to set carbon dioxide emission limits for power plants. In doing so, the Court reversed the D.C. Circuit’s January 2021 decision that found that the Trump administration’s repeal and replacement of the Obama administration’s Clean Power Plan was based on a too-narrow construal of EPA’s authority under Section 111(d). The Clean Power Plan used generation-shifting measures as two of the three “building blocks” for the “best system of emission reduction” for power plants under Section 111(d). One Clean Power Plan building block shifted electricity production from coal-fired to natural gas-fired units, and another building block shifted generation to low- or zero-carbon sources such as wind and solar. In the majority opinion by Chief Justice Roberts, the Court first determined that state petitioners, led by West Virginia, had standing because the D.C. Circuit’s judgment “purports to bring the Clean Power Plan back into legal effect,” which would require the states to “more stringently regulate power plant emissions within their borders.” The Court said the government’s arguments on standing—i.e., that EPA did not intend to enforce the Clean Power Plan but instead to develop a new Section 111(d) rule and that the D.C. Circuit had stayed the portion of its judgment that vacated the Clean Power Plan’s repeal—implicated mootness, not standing. The Court further concluded that EPA’s “voluntary cessation” of enforcement of the Clean Power Plan did not meet the heavy burden of establishing that the case was moot. On the merits, the Court determined that this was “a major questions case” under Court precedents dictating that “in certain extraordinary cases, both separation of powers principles and a practical understanding of legislative intent make us ‘reluctant to read into ambiguous statutory text’ the delegation claimed to be lurking there.” In such cases, the Court wrote, there must be “something more than a merely plausible textual basis for the agency action,” and so an agency “must point to ‘clear congressional authorization’ for the power it claims.” The Court identified factors that made this case a major questions case: EPA argued that Section 111(d) “empowers it to substantially restructure the American energy market” based on “an unheralded power” discovered “in a long-extant statute”; this asserted power was found in the “vague” language of an “ancillary” provision of the statute (i.e., Section 111(d), which the Court also referred to as a “previously little-used backwater”); and EPA’s interpretation “allowed it to adopt a regulatory program that Congress had conspicuously and repeatedly declined to enact itself.” The Court said that prior to the Clean Power Plan, EPA had always set Section 111 emission limits based on measures that would cause the regulated source to operate more cleanly, and that the Clean Power Plan’s generation-shifting plan therefore was “unprecedented” and “effected a ‘fundamental revision’” of the Clean Air Act’s regulatory scheme. Having found that its precedent “counsels skepticism toward EPA’s claim that Section 111 empowers it to devise carbon emissions caps based on a generation shifting approach,” the Court then determined that Section 111(d)’s “vague statutory grant” of authority to EPA to establish emission limits at a level reflecting “the application of the best system of emission reduction … adequately demonstrated” was “not close to the sort of clear authorization required by our precedents.” The Court also found that examples of other Clean Air Act provisions that describe cap-and-trade or sector-wide mechanisms for reducing pollution as systems did not support the argument that such a mechanism would be a “system of emission reduction” under Section 111(d). The Court noted, however, that it was not addressing whether “system of emission reduction” must exclusively refer “to measures that improve the pollution performance of individual sources” (sometimes referred to as inside-the-fenceline measures). Justice Gorsuch wrote a concurring opinion, joined by Justice Alito, that offered “additional observations” on the major questions doctrine and when it applies. This concurrence spoke favorably of the nondelegation doctrine. Justice Kagan wrote the dissent, joined by Justices Breyer and Sotomayor. The dissent described the majority’s decision as “really an advisory opinion on the proper scope of the new [Section 111(d)] rule EPA is considering” since no party was currently subject to the Clean Power Plan’s terms. The dissent stated that “[t]he limits the majority now puts on EPA’s authority fly in the face of the statute Congress wrote,” which in the dissent’s view “broadly authorized” EPA to set the “best system of emission reduction.” The dissent said that a “key reason” for Congress to make broad delegations like the one in Section 111(d) is so that “expert” agencies “can respond, appropriately and commensurately, to new and big problems.”

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The State of Virginia submitted a letter to the Court to explain that it had not joined in the state and municipal respondents’ brief because following the change in administration in January 2022, the new attorney general had reconsidered Virginia’s position in the case and was “no longer of the view that EPA’s repeal of the [Clean Power Plan] was unlawful.” Virginia said it now supported the petitioners’ arguments.

EPA argued that the petitioners lacked standing to invoke the Court’s jurisdiction because the D.C. Circuit’s vacatur of the ACE Rule “and the consequent absence of any currently application … regulation of greenhouse-gas emissions from existing power plants” did not harm petitioners. EPA contended that the petitioners sought an advisory opinion regarding what measures a future rule could contain. EPA further argued that the ACE Rule’s reading of the Clean Air Act was erroneous. In addition, EPA argued that there was no merit to the petitioners’ argument that the issue of determining what measures EPA may consider in determining the Best System of Emission Reduction (BSER) involved a major question and that “outside-the-fenceline” measures required specific congressional authorization.

Non-governmental organization and trade association respondents argued that the cases were not justiciable because the petitioners did not establish standing since they were not subject to any obligations under the Clean Power Plan or other regulation, and also because any future regulation EPA might adopt could not be reviewed until after its final promulgation. In addition, they argued that the Clean Air Act did not contain the ACE Rule’s restriction on the BSER, and that reliance on major questions principles was “misplaced” and, moreover, would not change the outcome because the Court held in American Electric Power Co. v. Connecticut that Section 111 of the Clean Air Act “speaks directly” to power plant emissions of carbon dioxide and assigns EPA to decide whether and how to regulate them. They also argued that North Dakota’s arguments that EPA lacked authority to set binding emission guidelines were not properly before the Court and were meritless.

Power company respondents argued against the application of the major questions doctrine and also argued that the Clean Air Act did not limit EPA to considering only measures applied “at and to” an individual plant in determining the BSER. In addition, the power company respondents rebutted arguments that it was necessary to interpret Section 111 narrowly to avoid violation of the nondelegation doctrine.

State and municipal respondents’ brief focused on the ACE Rule’s “overly restrictive reading” of the BSER and also argued that the case “does not resemble those in which this Court has found that an agency exceeded its core regulatory mission and decided major questions that Congress did not intend it to address.” They also contended that “without any extant rule that concretely affects petitioners,” concern regarding the EPA taking action that raised a major question outside its authority was “purely speculative.”

The 16 amicus briefs filed in support of the petitioners include a brief filed by 91 members of Congress, who argued that the major questions doctrine “forecloses the EPA’s far-reaching assertion of agency power” and that Congress “knows how to address greenhouse gas emissions,” citing laws that provide “carrots,” not “sticks,” to achieve emissions reductions and the recent federal law regulating hydrofluorocarbons.

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Petitioner North American Coal Corporation argued that the D.C. Circuit’s interpretation of Section 111 ran afoul of the major questions doctrine because it “gives the EPA unfettered control over not only the nation’s power grid, but the entire economy,” where Congress had not “clearly conferred” such authority. North American Coal’s brief also argued that the test, structure, and history of the provision required an interpretation that required EPA standards to have a source-specific focus.

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Petitioner North Dakota argued that the D.C. Circuit improperly interpreted Section 111 to give EPA “almost limitless power to regulate existing sources,” thereby upending the cooperative federalism framework and depriving states “of their authority to set standards of performance that take into account source-specific factors.”

Nineteen state petitioners led by West Virginia argued that Section 111 of the Clean Air Act does not clearly give EPA authority to exercise “transformative power” over the power industry and “to drive essential decisions” related to clean air and energy that traditionally are divided between the states and federal government. The states also argued that Section 111 requires that regulation be limited to “inside the fenceline” of a facility. They argued that the D.C. Circuit’s interpretation raised serious constitutional concerns and that the Court should construe Section 111 to avoid non-delegation issues.

Petitioner Westmoreland Mining Holdings LLC argued that the Clean Power Plan “implicated major questions by every possible measure” and that it was not clearly authorized by Congress. Westmoreland further argued that “[a]ccepting the Clean Power Plan’s interpretation of EPA’s authority would result in a forbidden delegation of legislative power.”

On October 29, 2021, the U.S. Supreme Court granted four petitions for writs of certiorari seeking review of the D.C. Circuit’s January 2021 decision vacating the U.S. Environmental Protection Agency’s (EPA’s) repeal and replacement of the Obama administration’s Clean Power Plan regulations for controlling carbon emissions from existing power plants. One petition was filed by West Virginia and 18 other states. Two coal companies each filed a petition, and North Dakota filed a separate petition. The questions presented in the four petitions and accepted for review by the Supreme Court are as follows: • In 42 U.S.C. § 7411(d), an ancillary provision of the Clean Air Act, did Congress constitutionally authorize the Environmental Protection Agency to issue significant rules—including those capable of reshaping the nation's electricity grids and unilaterally decarbonizing virtually any sector of the economy—without any limits on what the agency can require so long as it considers cost, nonair impacts, and energy requirements? West Virginia v. EPA, No. 20-1530 (U.S.) • Whether 42 U.S.C. § 7411(d), which authorizes the EPA to impose standards "for any existing source" based on limits "achievable through the application of the best system of emission reduction" that has been "adequately demonstrated," grants the EPA authority not only to impose standards based on technology and methods that can be applied at and achieved by that existing source, but also allows the agency to develop industry-wide systems like cap-and-trade regimes. North American Coal Corporation v. EPA, No. 20-1531 (U.S.) • Whether 42 U.S.C. § 7411(d) clearly authorizes EPA to decide such matters of vast economic and political significance as whether and how to restructure the nation's energy system. (The Court did not grant certiorari on a second question presented in this petition.) Westmoreland Mining Holdings LLC v. EPA, No. 20-1778 (U.S.) • Can EPA promulgate regulations for existing stationary sources that require States to apply binding nationwide "performance standards" at a generation-sector-wide level, instead of at the individual source level, and can those regulations deprive States of all implementation and decision making power in creating their Section 111(d) plans? North Dakota v. EPA, No. 20-1780 (U.S.)

Briefing was completed on August 24, 2021 on the four petitions for writ of certiorari seeking review of the D.C. Circuit’s January 2021 decision vacating the U.S. Environmental Protection Agency’s repeal and replacement of the Obama administration’s Clean Power Plan regulations for controlling carbon emissions from existing power plants. The petitions were distributed for the justices’ conference of September 27.

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In late May and early June 2021, five responses and briefs were filed in support of certiorari petitions seeking review of the D.C. Circuit’s January <a href="https://climatecasechart.com/wp-content/uploads/case-documents/2021/20210119_docket-19-1140_opinion.pdf">opinion</a> vacating EPA’s repeal and replacement of the Obama administration’s Clean Power Plan regulations for controlling carbon emissions from existing power plants. The D.C. Circuit held that the Trump administration’s Affordable Clean Energy Rule (ACE Rule) rested on an erroneous interpretation of the Clean Air Act that barred EPA from considering measures beyond those that apply at and to an individual source. Three of the responses and briefs supporting certiorari were filed by parties that intervened to defend the ACE Rule in the D.C. Circuit: National Mining Association; Basin Electric Power Cooperative, a not-for-profit regional wholesale electric generation and transmission cooperative; and America’s Power, a trade association comprising companies involved in the production of electricity from coal. In addition, two amicus briefs were filed, one by the Commonwealth of Kentucky and the other by New England Legal Foundation, a nonprofit law firm with a mission of “promoting balanced economic growth in New England and the nation, protecting the free-enterprise system, and defending individual economic rights and the rights of private property.” The federal government’s response is due by July 6.

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