Now that the dust has settled on the Supreme Court’s 2014 session, we can look at the decisions and conclude that the Administration received a serious smack down. Two big cases got most of the news coverage: Hobby Lobby and the National Labor Relations Board’s (NLRB) recess appointments. In both cases, the Administration lost. At the core of both, is the issue of the Administration’s overreach.
Within the cases the Supreme Court heard, one had to do with energy—and it, too, offered a rebuke.
You may not have heard about Utility Air Regulatory Group (UARG) v. Environmental Protection Agency (EPA).
The UARG v. EPA decision came down on June 23. The decision was mixed—with both sides claiming victory. Looking closely, there is cause for optimism from all who question the president’s authority to rewrite laws.
A portion of the UARG v. EPA case was about the EPA’s “Tailoring Rule” in which it “tailored” a statutory provision in the Clean Air Act—designed to regulate traditional pollutants such as particulate matter—to make it work for CO2. In effect, the EPA wanted to rewrite the law to achieve its goals. The decision, written by Justice Antonin Scalia for the majority, stated:
“Were we to recognize the authority claimed by EPA in the Tailoring Rule, we would deal a severe blow to the Constitution’s separation of powers… The power of executing laws…does not include a power to revise clear statutory terms that turn out not to work in practice.”
Had the EPA gotten everything it wanted, it could have regulated hundreds of thousands of new sources of CO2—in addition to the already-regulated major industrial sources of pollutants. These new sources would include office buildings and stores that do not emit other pollutants—but that do, for example, through the use of natural gas for heating, emit 250 tons, or more of CO2 a year.
The Supreme Court did allow the EPA to regulate CO2 emissions from sources that already require permits due to other pollutants—and therefore allowed the EPA and environmentalists to claim victory because the decision reaffirmed the EPA does have the authority to regulate CO2 emissions. However, at the same time, the decision restricted the EPA’s expansion of authority. Reflecting the mixed decision, the Washington Post said the decision was: “simultaneously very significant and somewhat inconsequential.”
It is the “very significant” portion of the decision that is noteworthy in light of the new rules the EPA announced on June 2.
Currently, the Clean Air Act is the only vehicle available to the Administration to regulate CO2 from power plant and factory emissions. However, the proposed rules that severely restrict allowable CO2 emissions from existing power plants bear some similarities to what the Supreme Court just invalidated: both involve an expansive interpretation of the Clean Air Act.
Tom Wood, a partner at Stoel Rives LLP who specializes in air quality and hazardous waste permitting and compliance, explains: “Although the EPA’s Section 111 (d) proposals cannot be legally challenged until they are finalized and enacted, such challenges are a certainty.” With that in mind, the UARG v. EPA decision sets an important precedent. “Ultimately,” Wood says, “the Supreme Court decision seems to give more ammunition to those who want to challenge an expansive view of 111 (d).” Wood sees it as a rebuke to the EPA—a warning that in the coming legal battles, the agency should not presume that its efforts will have the Supreme Court’s backing.
Philip A. Wallach, a Brookings fellow in Governance Studies, called the UARG v. EPA case “something of a sideshow,” and sees “the main event” as EPA’s power plant emissions controls, which have “much higher practical stakes.”
In his review of the UARG v. EPA decision, Nathan Richardson, a Resident Scholar at Resources For the Future, says: “In strict legal terms, this decision has no effect on EPA’s plans to regulate new or existing power plants with performance standards. … However, if EPA is looking for something to worry about, it can find it in this line from Scalia:”
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. We expect Congress to speak clearly if it wishes to assign an agency decisions of vast “economic and political significance.”
The UARG v. EPA decision is especially important when added to the more widely known Hobby Lobby and NLRB cases, which is aptly summed up in the statement by the American Fuel & Petrochemical Manufacturers’ General Counsel Rich Moskowitz: “We are pleased that the Court has placed appropriate limits on EPA’s authority to regulate greenhouse gases under the Clean Air Act. By doing so, the Court makes clear that an agency cannot rewrite the law to advance its political goals.”
Justice Scalia’s opinion invites Congress to “speak clearly” on agency authority. It is now up to our elected representatives to rise to the occasion and pass legislation that leaves “decisions of vast ‘economic and political significance’” in its hands alone. Such action could rein in many agency abuses including the heavy-handed application of the Endangered Species Act and public lands management.
The decision—while “somewhat inconsequential”—is, in fact, “very significant.” The Supreme Court has, perhaps, outlined the first legislation of the new, reformatted, post-2014 election Congress.