JURIST Guest Columnist Jordan Asch, Vermont Law School Class of 2014, discusses United Air Regulatory Group v. EPA and argues that the petitioners lack standing to challenge EPA’s controversial rule regulating greenhouse gas emissions from stationary sources …

In Utility Air Regulatory Group v. EPA [PDF] (certiorari granted October 15, 2013), the Supreme Court must decide whether the Environmental Protection Agency (EPA) acted permissibly when it determined that its regulation of greenhouse gas emissions from new motor vehicles triggered a statutory requirement to additionally set emissions for greenhouse gas emissions from stationary sources such as power plants. Industry parties, along with several state petitioners claim these regulations will cost billions of dollars. On the other hand, if this challenge is successful it could effectively topple a large portion of EPA’s emissions limiting regulatory regime. However, the nature of the EPA’s action creates a situation in which the industry and state petitioners lack standing, as the US Court of Appeals for the District of Columbia Circuit opined, to challenge the controversial rulemaking.

The EPA acted to regulate greenhouse gas emissions from stationary sources in response to the Supreme Court’s holding in Massachusetts v. EPA, and the agency’s interpretation of the Clean Air Act. The court’s holding in Massachusetts v. EPA required the agency to regulate greenhouse gas emissions from new motor vehicles if the agency determined that greenhouse gases endanger public health or welfare. EPA subsequently found that greenhouse gases indeed pose a danger to public health and welfare, setting emissions limits for new motor vehicles.

Accordingly the EPA, the Clean Air Act, together with the Massashusetts v. EPA holding, required the agency to set greenhouse gas emissions limits on stationary sources such as power plants. In Coalition for Responsible Regulation, Inc. v. EPA, the court stated that:

[the] EPA has long interpreted the phrase ‘any air pollutant’ in … [the Act’s] provisions to mean any air pollutant that is regulated under the CAA … And once the Tailpipe Rule set motor-vehicle emissions standards for greenhouse gases, they became a regulated pollutant under the Act, requiring [stationary source] permitting.

On this authority, EPA created the “Tailoring Rule” [PDF], now in contention before the court, which granted certiorari to industry and state petitioners, in part, earlier this month.

The petitioners presented three main arguments. First, petitioners assert that the agency does not adequately support its endangerment finding for greenhouse gases. Second, the petitioners maintain that there are fatal flaws in the new motor vehicle regulations. Third, petitioners contend that the Clean Air Act does not authorize EPA to regulate emissions from stationary sources. The Supreme Court only accepted on certiorari the question of “whether the agency ‘permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.'” Because the court declined to hear challenges to the evidentiary support for endangerment finding and the motor vehicle regulations, these rules will stand.

According to Adam Liptak’s article for the New York Times, industry groups challenging the stationary source standards claim that EPA has undertaken “the most sweeping expansion” of its own authority ever. In extending agency authority to regulate greenhouse gas emissions from stationary sources, rules may now reach millions of industrial, commercial and residential facilities across the US industry parties contend that costs could reach into the tens of billions of dollar per year. Liptak also acknowledged that environmental groups received the partial certiorari grant as a partial victory. These parties focused on the court’s decision to deny further challenge to EPA’s well-founded endangerment finding for greenhouse gases, and the denial to hear further challenge to the agency’s clean car emissions standards.

The issue now before the court focuses on the agency’s statutory interpretation. Lyle Denniston notes in his recent post on SCOTUSblog, that the court posed the question presented on its own, borrowing language from the US Department of Justice brief in the case. The court, however, changed the department’s use of the word “correctly” to “permissibly.” This word choice frames the way the court will employ the deference due to an agency in interpreting its own enabling statute.

This case comes with a serious threat to EPA’s current regulatory regime. This threat is a double edge sword with possible significant implication for the challenging parties as well as the agency. 42 USC § 7479 states that large stationary sources that emit more than 250 ton of a pollutant per year must obtain permits from the EPA for these emissions, and that smaller sources that emit greater than 100 tons of a pollutant must obtain a permit. After making the endangerment finding [PDF], EPA decided that using that low threshold would go beyond Congress’ intentions and tip any reasonable cost-benefit balance within the statute. Therefore, EPA set the thresholds for greenhouse gas emissions at 100,000 tons per year for larger sources, and 75,000 tons per year for small sources.

As Denniston notes, if the court finds that EPA acted improperly, this could create major complications. For example, if the agency misinterpreted the act’s “triggering” provision, a large portion of EPA’s regulatory structure could prove an unconstitutional use of authority that Congress has not delegated to the agency. Moreover, if EPA must follow the thresholds of the act in implementing its provisions, the act would require EPA to regulate emissions sources as small as hospitals and apartment buildings. This would cost the agency billions of dollars in added paper work, and would cost industry parties billions to comply with the rules.

Still, only a rare case would allow the court to find such an agency action permissible, despite EPA’s intentions to reduce regulatory burdens to a manageable level. In the case below, EPA asserted three justifications for its Tailoring Rule. First, EPA determined that implementing the greenhouse gas emissions permitting program at the statutory levels would create absurd results. Second, the agency justified its actions based on administrative necessity. Third, EPA asserts its authority to implement large regulatory programs in a piecemeal fashion. Importantly, the D.C. Circuit never addressed these justifications for EPA’s actions because the court found that the challengers lacked standing.

The D.C. Circuit found industry and state challengers to lack standing because they “were regulated … not because of anything EPA did in the Timing and Tailoring Rules, but by automatic operations of the statute.” Thus, these rules did not cause the alleged injury of having to comply with EPA regulations. Additionally, the state challengers contended that the climate change caused by greenhouse gases causes their injury and that they actually wanted greater and quicker regulation. The D.C. Circuit, however, held this argument as “completely without merit” for two reasons. First, the state challengers never stated this alleged injury before their reply brief, making the argument invalid. Second, unlike the injury asserted in Massachusetts v. EPA, these state challengers “fail to cite any record evidence to suggest they are adversely affected by global climate change.” In the end, the lower courts sound reasoning will demand the court affirm the D.C. Circuit’s holding and find the petitioners to lack standing here. Thus, the Tailoring Rule will stand.

Jordan Asch is the Head Notes Editor of the Vermont Journal of Environmental Law.

Suggested citation: Jordan Asch, A “Rare” Case Indeed , JURIST – Dateline, Nov. 4, 2013, http://jurist.org/dateline/2013/11/jordan-asch-environmental-law.php.