During an expanded, 90-minute argument session Tuesday, the justices of the U.S. Supreme Court wrangled over whether the Environmental Protection Agency has the authority to impose power plant emission rules upon states that contribute to the air pollution of neighboring states.
The consolidated cases of EPA v. EME Homer City Generation and American Lung Association v. EME Homer City Generation involve challenges to the EPA’s Cross-State Air Pollution Rule, also called the CSAPR or “Transport Rule,” which was created in 2011 under the Clean Air Act’s “good neighbor” provision.
That provision requires states in the upwind or eastern portion of the country to create plans to address emissions from coal-fired power plants that drift westward and “contribute significantly” to pollution levels, interfering with other states’ ability to meet federal air quality standards.
A group of states, local governments and business groups challenged the rule in court, and eventually the U.S. Court of Appeals for the D.C. Circuit struck it down, holding that the EPA exceeded its authority under the Clean Air Act in two ways. First, it utilized a formula that took cost into consideration in determining the amount by which each state was required to reduce emissions — thus placing a burden on some states to reduce air pollution emissions by a percentage greater than those states’ contribution. Second, it imposed a federal implementation plan upon the covered states rather than giving them the ability to first promulgate their own state implementation plans, as was the process under previous Clean Air Act rules.
The government successfully petitioned the Supreme Court for certiorari.
Deputy U.S. Solicitor General Malcolm Stewart argued that the rule developed by the EPA strikes “a fair balance between the competing interests of upwind and downwind states.”
Justice Antonin Scalia pointed out that that the cost-saving thresholds established by the agency “would not be evenly distributed among the upwind states … [s]o some upwind states that are able to make those efficient changes will be carrying more than their burden of reducing emissions that affect downwind states, right?”
Stewart acknowledged that “the use of cost would have the effect of distributing the burden in a somewhat different way than it would have if you considered air-quality factors only.”
Chief Justice John Roberts Jr. questioned how to measure the “contributes significantly” standard.
“The question is, for example, whether somebody who fatally stabs somebody and someone [else who] fatally shoots them have each significantly contributed to the bad result, or contributed in varying degrees,” he said.
Stewart used a sports analogy instead.
“If you had a basketball team that lost a game by one point, and the coach was asked to pinpoint the plays that contributed significantly to the defeat, the coach would be much more likely to identify a missed layup or a turnover than the missed half-court shot at the buzzer,” Stewart said. Likewise, by focusing on the measures states can cost-effectively make to reduce pollution, the EPA can “focus on errors that should have been avoided, not … the failure to accomplish something that’s extraordinarily difficult.”
Justice Elena Kagan asked about the D.C. Circuit ruling, which ordered the EPA to reinstate the previous rule of determining upwind states’ reduction obligations without regard to cost.
“The straight proportionality approach that was applied in the D.C. Circuit, are you saying that that’s impossible or are you saying it’s complicated and dumb?” she asked.
“At least what we understand to be the straight proportionality approach is impossible,” Stewart replied.
Arbitrary and capricious change?
Texas Solicitor General Jonathan Mitchell argued on behalf of local and state entities challenging the rule, including Louisiana, Michigan, Oklahoma, South Carolina, Texas, Virginia and Wisconsin.
“EPA cannot impose a good neighbor [obligation] on the states when EPA has left the states completely in the dark about the meaning of the phrase ‘contribute significantly,’” Mitchell said, calling the departure from the previous EPA rule that allowed states to submit their own pollution reduction plans “arbitrary and capricious.”
Justice Stephen G. Breyer wasn’t persuaded.
“I mean, all the time it happens that people change their minds about how problems are best solved,” Breyer said. “So if your only point is once they did it a different way, they’ll say, ‘Well, what’s unreasonable about changing our way?’”
Mitchell argued that the states’ ability to provide a workable alternative is hampered by the existence of the federally-imposed implantation plan.
Scalia jumped in to help Mitchell make his point.
“Until you propose your SIP [state implementation plan] to replace the FIP [Federal implementation plan], the FIP remains in effect? And you are bound by that until they approve your SIP … Is that a quick process?” he asked.
“No, it takes months,” Mitchell said.
Breyer pointed out that the formula for fixing air pollution may not mirror the formula for how the pollution was created.
“There are six states that contribute to the seventh state’s pollution, and how much each state can cut back depends,” he said. “It depends on what it costs. … It sounds to me as if you’re asking [EPA] to do the impossible, and they had a very good reason for not doing what they did before: namely, it would be impossible, or not actually impossible, but very tough and very expensive.”
Peter Keisler, a partner and co-chair of Sidley Austin LLP’s Appellate Practice in Washington, represented the businesses and industry groups challenging the law.
He said the cost-saving component dominates the entire emissions control equation.
“There is no relationship at all under the EPA’s methodology between the amount a state contributes and the amount it has to reduce, because the entire driver is cost,” Keisler said. “Mr. Stewart said that cost was one component. It is not one component. It is the entire driver.”
A decision is expected later this term.