DC Circuit rejects demand for stay of Clean Power Plan

A federal appeals court turned aside Thursday an effort to block implementation of the Obama administration’s new carbon dioxide emissions limits on power plants while the legality of the regulation is determined.

The panel of three U.S. Court of Appeals for the District of Columbia Circuit judges issued an unsigned order that offered no detailed explanation of its decision. Instead, the court said only that the states and industrial interests seeking the stay “have not satisfied the stringent requirements for a stay pending court review.”

“This is a huge win for protecting our health and climate from dangerous carbon pollution,” David Doniger, director of the Climate and Clean Air Program at Natural Resources Defense Council, said.

NRDC has intervened in the case on the side of the U.S. Environmental Protection Agency.

Another part of today’s order specified that briefing in the case must be completed by Apr. 22 and that oral argument will take place on June 2.

The judges who sat on the panel that issued today’s order are Karen LeCraft Henderson, Judith W. Rogers, and Sri Srinivasan. Rogers was appointed by President William J. Clinton, Srinivasan was appointed by President Barack Obama, and Henderson was appointed by President George H.W. Bush.

While it is possible that the appeals court will issue a decision in the dispute by the time Obama leaves office on Jan. 20, 2017, it is likely that the U.S. Supreme Court will be asked to hear it no matter the outcome in the D.C. Circuit. If the justices grant such a petition for certiorari, a decision of the Supreme Court may not come until sometime in 2018.

States challenge Clean Power Plan

Two dozen states asked a federal court Friday to invalidate the Obama administration’s signature effort to address climate disruption and to temporarily block it from going into effect while litigation proceeds.

The coalition, led by the coal-dependent state of West Virginia and its Republican attorney general Patrick Morrisey, filed a petition for review of the Clean Power Plan and a motion to stay the regulation in the U.S. Court of Appeals for the District of Columbia Circuit.

“The Clean Power Plan is one of the most far-reaching energy regulations in this nation’s history,” Morrisey said in a statement. “West Virginia is proud to be leading the charge against this administration’s blatant and unprecedented attack on coal.”

The recalcitrant states’ motion to stay indicates that one of the main pillars of the attack on the Clean Power Plan will be that it is not authorized by the Clean Air Act:

“EPA has exceeded its authority under Section 111(d), especially in light of the clear-statement rule set forth in [a 2014 U.S. Supreme Court decision]. In [that case], the Supreme Court rejected an expansive EPA regulation of carbon dioxide emissions, holding that ‘[w]hen 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.’ Congress, the Court explained, is expected to ‘speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance.’ EPA now claims to have found in Section 111(d), a long-extant provision, the power to transform the nation’s energy grid. But the text of Section 111(d) does not begin to suggest that EPA may make such ‘decisions of vast economic and political significance,’ much less ‘clearly’ authorize it to do so.”

Patrick A. Parenteau, a professor at Vermont Law School and an expert on environmental law, said that another argument likely to be made in the case, and similarly outlined in the request to prevent the regulation from taking effect, is that EPA cannot regulate carbon dioxide emissions from power plants under section 111(d) of the Clean Air Act because it has already chosen to regulate mercury emissions from them under section 112 of the law.

Parenteau labeled this argument as “a loser.”

“It is a killer argument, of course, and if it wins then the Clean Power Plan is dead,” he said. “If they get a really conservative panel that’s looking to do real harm to EPA, ten percent is about what I give that.”

Parenteau explained that another likely statutory argument, which focuses on whether EPA can mandate greater use of renewable energy resources by power plants and more production of energy from natural gas combined cycle power plants, may have a better chance of success.

“The ‘beyond the fence line’ argument is a much closer call,” he said. “There’s going to be a close question on whether the renewable build block survives intact.”

Another argument by opponents of the Clean Power Plan previewed by the motion to stay filed Friday is that it violates the U.S. Constitution’s Tenth Amendment. They claim that the regulation unlawfully forces states to expend financial resources to achieve a federal policy goal.

But Parenteau pointed out that the Clean Power Plan’s provision allowing states to opt-out, and instead allow EPA to impose a federal implementation plan within the state, probably renders this argument weak.

A 1992 decision of the U.S. Supreme Court held that a similar approach mandated by another section of the Clean Air Act does not violate the Tenth Amendment.

The states that joined West Virginia in challenging the Clean Power Plan in court Friday are Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, New Jersey, North Carolina, Ohio, South Carolina, South Dakota, Texas, Utah, Wisconsin, and Wyoming.

A number of business organizations and trade groups also plan to file a petition for review seeking invalidation of the regulation, including the National Federation of Independent Business, National Association of Manufacturers, American Fuel and Petrochemical Manufacturers, American Chemistry Council, American Coke and Coal Chemicals Institute, American Foundry Society, American Forest and Paper Association, American Iron and Steel Institute, American Wood Council, Brick Industry Association, Electricity Consumers Resource Council, Lignite Energy Council, National Lime Association, National Oilseed Processors Association and Portland Cement Association.

At least 15 states and two cities will join the Obama administration in defense of the Clean Power Plan.

“My office is prepared to join with our partners to aggressively defend EPA’s Clean Power Plan – rules that will significantly reduce climate change pollution nationally,” New York’s Democratic attorney general Eric T. Schneiderman said in a statement. “These rules have a sound foundation in both science and the law, and build upon strategies New York and other states have used to successfully cut power plant emissions.”

Efforts to delay or block regulation of greenhouse gas emissions from power plants are not limited to the courts. Two resolutions that would invalidate the Clean Power Plan will be introduced in the U.S. Senate next week by legislators representing states with economies that are heavily reliant on fossil fuel extraction.

According to a report Friday in The Hill newspaper, Sens. Mitch McConnell (R-Ky.), Joe Manchin (D-W.Va.), Shelly Moore Capito (R-W.Va.), and Heidi Heitkamp (D-N.D.) will file two Congressional Review Act resolutions.

Under the CRA Congress can effectively veto a regulation. However, a CRA resolution requires the signature of the President to be effective. President Barack Obama has already made clear that he will not sign measures that aim to interfere with implementation of the Clean Power Plan.

The Clean Power Plan became a legally effective regulation on Friday when it was published in the Federal Register.

Clean Power Plan due to be published Friday, litigation aimed at scuttling it likely to follow soon after

The Obama administration’s long-awaited regulations aimed at reducing emissions of carbon dioxide from electric power plants are likely to clear their last hurdle on Friday, likely triggering a rush to federal court by opponents determined to prevent them from going into effect.

Representatives of three environmental groups and Earthjustice, one of the environmental community’s principal legal representatives, expressed confidence during a press conference Thursday morning that the Clean Power Plan would stand up to those attacks.

“A dirty-energy alliance of coal companies, old-school utilities and their allies will rush to the courthouse with lawsuits stoked with hot rhetoric about its supposedly dire impacts,” David Doniger, director of the Climate and Clean Air Program at Natural Resources Defense Council, said. “Don’t believe a word of it. The Clean Power Plan will go forward and protect our future.”

A coalition that includes coal interests, power companies, and states opposed to the Environmental Protection Agency’s effort to reduce atmosphere-warming pollution by the power industry is likely to ask the U.S. Court of Appeals in Washington, DC to block the Clean Power Plan shortly after it is published.

They are expected to launch several arguments in their effort to convince the court to do so, including one that EPA cannot rely on the section of the Clean Air Act that supports the part of the Clean Power Plan that applies to existing power plants because it has previously regulated mercury emissions from those facilities under a different section of the law.

EPA relied on section 111(d) of the CAA as the statutory foundation for the aspect of the new regulation that covers existing facilities, while the agency invoked section 112 of the CAA when it imposed the Mercury and Air Toxics Rule as a mandate to limit mercury emissions from them.

A document published in February by the Environment and Energy Legal Institute, a libertarian organization that is allied with coal mining firms and utilities in opposition to greenhouse gas emission limits, laid out the rationale for this expected thrust against the regulation:

“In order to prevent sources from being subject to multiple costly layers of regulation that could harm their economic competitiveness, the Clean Air Act prohibits EPA from requiring states to submit Section 111(d) plans for source categories that are regulated under Section 112 of the Act. The Section 111(d) proposal would violate this prohibition by establishing Section 111(d) standards for fossil-fuel fired power plants which have been regulated under Section 112 of the Act since 2012.”

This argument, which seemingly rests on the interpretation of one provision of the Clean Air Act, is actually somewhat complex, having to do with the question of which version of section 111(d) applies. After a conference committee reconciled conflicting versions of the Clean Air Act bills passed by the U.S. Senate and U.S. House of Representatives in 1990, both chambers’ versions of that section of the law were left in the final bill.

The Senate’s version of the section language forbade EPA from regulating an “air pollutant” that is either already regulated by section 108 of the CAA or listed as a hazardous air pollutant under section 112 of the law. Carbon dioxide is not covered by either of those provisions in the Clean Air Act. The House version, by contrast, precluded EPA from regulating a pollutant if it is “emitted from a source category” regulated under section 112 of the CAA. Since the MATS rule extends to existing power plants, industry lawyers are likely to claim that the Clean Power Plan is precluded by the House language.

EPA, on the other hand, is likely to argue that the presence of the two conflicting versions of the provision creates an ambiguity in the statute and, therefore, that a principle of administrative law known as the Chevron doctrine, named for a landmark case in the 1970s, allows it discretion to interpret the statute in a way that supports the Clean Power Plan.

In an Aug. 17, 2015 post at Legal Planet, University of California at Berkeley law professor Dan Farber explained that EPA has already previewed this defense of the regulation:

“EPA formerly argued that the two versions of the rule were inconsistent and that the Senate version should control. In the final version, it attempts to harmonize the two sections by reading the House version to apply only when the same pollutant is regulated for that category under section 112. This would allow the two sections to be read harmoniously.  Together, they would exempt from section 111(d) any hazardous substance covered by a regulation of that type of source under section 112. EPA’s main argument for this position is based on statutory purpose: it reads 111(d) as a gap filler, designed to ensure that serious air pollution didn’t fall through the cracks of the statute’s other provisions.”

In any case, the major environmental advocacy organizations primed to intervene in any litigation challenging the Clean Power Plan believe the argument, which they call the “pick your poison theory,” is doomed to fail.

“This pick your poison theory is completely inconsistent with the way section 111(d) has been understood and applied since it was enacted in 1970,” Tomas Carabanell, the director of regulatory policy and an attorney at Environmental Defense Fund, said.

Another likely argument of Clean Power Plan opponents is that the regulation is unconstitutional. This line of attack was previewed in Dec. 2014 by Harvard Law School professor Lawrence Tribe. Tribe wrote, in comments he submitted to EPA on behalf of Peabody Coal Co., that the Clean Power Plan “violates principles of federalism and seeks to commandeer state governments in violation of the Tenth Amendment.”

Three federal courts have already rejected claims that the U.S. Constitution precludes application of CAA provisions requiring states to prepare plans to implement a federal air pollution regulation, including the federal appeals court in which challenges to the Clean Power Plan must be filed.

In a 2013 decision, the U.S. Court of Appeals for the District of Columbia Circuit held that EPA is not barred from applying a federal implementation plan, as the CPP will permit, if states refuse to implement sufficient plans of their own:

“The States’ reliance on the Tenth Amendment is met by Supreme Court precedent repeatedly affirming the constitutionality of federal statutes that allow States to administer federal programs but provide for direct federal administration if a State chooses not to administer it,” the court wrote.

Howard Fox, a lawyer with Earthjustice, said during Thursday’s press conference that he believes the Clean Power Plan will easily pass constitutional scrutiny.

“Constitutional arguments against the plan are last-ditch attempts to block the transition to clean energy that is already underway,” he said. “Those who make such claims are on the wrong side of the law and the wrong side of history.”

EPA will also be supported in defense of the Clean Power Plan by at least 15 states and the cities of Washington, D.C. and New York.

President Barack Obama announced on Aug. 3 that EPA had completed its work on the new regulation.

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.

DC Circuit rejects request to stay Clean Power Plan

A federal appeals court has turned away an effort to delay the planned implementation of the Obama administration’s regulations to limit carbon dioxide emissions from power plants.

The U.S. Court of Appeals for the District of Columbia Circuit rejected Wednesday two petitions to stay the rules filed by a coalition of 15 states and a coal mining company.

“The petitions [are] denied because petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action,” the order said.

No announcement of the Clean Power Plan has yet appeared in the Federal Register, a step required by a law known as the Administrative Procedure Act before most federal regulations can take effect and by the Clean Air Act before it can be challenged in court.

President Barack Obama announced on Aug. 3 that the planned regulations are in final form. Although the Environmental Protection Agency has not publicly stated when the Clean Power Plan rule will be published, an agency website indicates that it is scheduled to go into effect on Nov. 13.

First proposed for new power plants in Sept. 2013 and for existing facilities in June 2014, the Clean Power Plan would require all power plants, including those that are newly constructed or modified, to limit the amount of carbon dioxide emissions produced when coal and natural gas is burned to produce electricity. The rule would generally delegate to the states the authority to develop and implement regulatory plans to achieve the reduction targets.

One of the petitions denied Wednesday was filed by the states of Alabama, Arkansas, Florida, Indiana, Kansas, Kentucky, Louisiana, Michigan, Nebraska, Ohio, Oklahoma, South Dakota, West Virginia, Wisconsin, and Wyoming. The other was filed by Peabody Energy Corporation.

Both petitions argued that the Clean Power Plan, which is based on a Clean Air Act section that relates to pollution from industrial facilities, is precluded by another section of that law relating to hazardous air pollutants. They also claimed that a delay of the rule is needed because there may be too little time between its publication by EPA and its effective date, which would put affected states and private entities in the position of having to begin work toward compliance before the legality of the regulation is decided by the federal courts.

“The final rule directs States to file plans or detailed “initial submittals” by Sept. 6, 2016,” Peabody’s motion said. “That is barely a year away and an eye-blink in the context of the multi-year planning horizon of energy suppliers, utilities, and private industry.”

The DC Circuit panel that issued Wednesday’s order did not comment on the merits of the arguments advanced by the states and Peabody. However, the same court ruled earlier this summer that the statute relied upon by the states and the coal company as a basis for blocking a federal rule before it takes effect does not affect the procedure for litigation specified by the Clean Air Act.

EPA to delay emission rules for new and existing power plants

The Obama administration announced earlier this month that it would delay release of final rules limiting carbon dioxide emissions from existing electric power plants and release proposed rules governing greenhouse gas pollution from new power plants several weeks later than originally planned.

Environmental Protection Agency assistant administrator Janet McCabe disclosed the modified schedule during a press conference on Jan. 7. She said that the regulatory issues common to both new and existing power plants dictated a simultaneous release of the respective Clean Power Plan regulations.

The agency also said it would develop a model emissions rule to be imposed on states that refuse to act on their own to regulate greenhouse gas emissions from the electricity generation sector.

Since news of the delay in release of the two Clean Power Plan rules broke, commentators have speculated that the administration is seeking to maximize the likelihood that both will survive an expected legal challenge from the industry and others. One law professor who specializes in the Clean Air Act suggested on the Legal Planet blog that EPA may be seeking to harmonize the standards applicable to new and existing coal-fired power plants, particularly those that aim to encourage use of carbon capture technology.

EPA will issue the final rule for existing coal-fired power plants and the proposed rule for new, modified, and reconstructed facilities this summer.