Commentary: Does the Michigan v. EPA decision doom the Clean Power Plan?

The U.S. Supreme Court’s June decision that rejected a Clean Air Act regulation limiting mercury emissions from power plants looms over the Obama administration’s push to cut those facilities’ greenhouse gas emissions and, given the reasoning employed by the five justices in the majority, it’s possible that the Clean Power Plan could be at risk of a similar fate.

In Michigan v. Environmental Protection Agency Justice Antonin Scalia concluded that the CAA provision at issue there requires EPA to consider the potential costs of an emissions limit to the polluter before it concludes that the limit is, in the words of the statute, “appropriate and necessary.” That decision, which was joined by fellow Republican appointees Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito, could be understood as a departure from the way the Court has traditionally interpreted the environmental laws.

For the past thirty or so years, the Court has tended to uphold an agency’s interpretation of a statute that authorizes it to write regulations if that interpretation is “reasonable.” In the words of the majority opinion in a case called Chevron USA, Inc. v. Natural Resources Defense Council, Inc.:

“First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”

Section 112 of the CAA does not say when EPA must consider the costs of a potential regulation, but instead requires only that EPA do so before issuing that regulation. In fact, EPA made clear that it would consider the costs of compliance with the Mercury and Air Toxics rule struck down in Michigan v. EPA before the regulation was finalized.

According to the Chevron rule that traditionally governs, the Court should have upheld the MAT rule against the attack leveled against it because the EPA’s administrator reasonably understood the statutory language to permit the agency to consider compliance costs after deciding that some limit on mercury and other toxic air pollutant emissions from coal-fired power plants is needed to protect public health and the environmental quality of the atmosphere.

But it didn’t. Instead, Scalia wrote that EPA had tried to “gerrymander” the Chevron rule by ignoring a part of the CAA. To Scalia and the justices that joined his opinion, the word “appropriate” necessarily includes consideration of compliance costs.

The Clean Power Plan, like the MAT rule, is based on a two-step process in which EPA first decided that limits on carbon dioxide emissions are needed to advance the goals of the CAA. This conclusion, known as an “endangerment finding,” preceded the agency’s consideration of the costs to industry; those costs were taken into account before the Clean Power Plan was announced in early August.

Will the Supreme Court apply the reasoning of Michigan v. Environmental Protection Agency in the inevitable challenge to President Barack Obama’s signature program for limiting the damage coal combustion does to the atmosphere? Or will it conclude, instead, that its interpretation of “appropriate and necessary” is irrelevant because a different section of the CAA authorizes the Clean Power Plan?

We cannot know that until litigation that aims to eliminate the Clean Power Plan reaches the justices. But there may be cause to worry. For one thing, Justice Thomas wrote, in his concurring opinion in the Michigan case, that he thinks deference to agency interpretations of statutes might violate the Constitution’s separation of powers doctrine. Justice Alito seems to think the Chevron doctrine has to go, too, and Scalia himself has indicated some skepticism about the degree to which courts refrain from second-guessing an agency’s understanding of a statute’s meaning. The Court’s most senior justice, Scalia has voted not to defer to an agency statutory interpretation in nearly half the cases that raise the issue since John Roberts became chief justice ten years ago.

It is not clear that Chief Justice Roberts outright opposes the idea of deferring to agency interpretations of statutes, but he has indicated a willingness to limit the circumstances under which that deference is due.

Because the Court’s four justices appointed by Democratic presidents (Ruth Bader Ginsburg, Stephen G. Breyer, Sonia M. Sotomayor, Elena Kagan) have not indicated any inclination to overrule the decision in the Chevron case, the fate of much of the country’s environmental regulatory apparatus is in the hands of Justice Anthony M. Kennedy.

The cacophony surrounding the 2016 Presidential election will be laced with arguments over issues big and small. The question whether EPA, or for that matter, the agencies that manage everything from our food supply to wildlife and the public lands, will have their decisions subjected to scrutiny by politically conservative judges who are inclined to favor the interests of industry or instead whether the expertise those agencies have shown will be granted the respect it deserves is one that the justices who replace 82-year old Ginsburg, 79-year old Scalia, 79-year old Kennedy, or 77-year old Breyer should keep in mind when they cast a ballot for the candidate who will appoint them.

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