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Utility Air Regulatory Group v. EPA: Separation of Powers in the Balance



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This morning the Supreme Court issued an opinion sharply limiting the EPA’s discretion in Utility Air Regulatory Group v. EPA (which was consolidated with Chamber of Commerce et al. v. EPA and several other cases), a case about the EPA’s authority to unilaterally rewrite pollutant thresholds written directly into the Clean Air Act (CAA). When EPA decided to move forward with regulating stationary sources of “greenhouse gas” emissions (GHGs) such as carbon dioxide, which occurs naturally in colossal quantities, it ran headlong into hard-coded numeric thresholds for pollutants in the text of the CAA. So EPA issued a regulation that just changed the thresholds.

In a split opinion, the Court concluded that EPA exceeded its statutory authority by changing the statutory thresholds, but that it could still treat GHGs as pollutants and require control technologies for certain sources of GHGs.

Since the case was one of the most economically significant this term, numerous amici filed briefs. The Judicial Education Project filed an amicus brief arguing that the government’s claim that it was just following orders from the Court’s decision in Massachusetts v. EPA (2007) distorted the prior holding, which was about administrative procedure. Instead, the brief argued, EPA was vastly overreading the scope of the Court’s holding in Massachusetts, and was using Massachusetts to conceal a host of separation-of-powers problems generated by its position.

After oral argument, I correctly predicted that the justices seemed divided about the best way to decide the case. Justice Scalia wrote the majority opinion for the Court, with Justices Roberts and Kennedy joining Scalia’s opinion in full. Justices Thomas and Alito concurred in part and dissented in part. Justice Breyer wrote a partial concurrence/dissent and concurred with part of Justice Scalia’s opinion, with the liberal justices following Justice Breyer. 

The majority opinion again shows why Justice Scalia is the Court’s foremost textual analyst. The first part of the challenge was to regulations issued under a program that the EPA uses to prevent significant deterioration in air quality. This program (called the “PSD” program) required any source subject to the program to get a permit if it would emit more than 250 tons of carbon dioxide per year. As I mentioned before, EPA had claimed that under Massachusetts, its hands were tied because it was affirmatively required to regulate GHGs under this program, and therefore had to ignore the 250-ton threshold.

The Court put that argument to rest with a sensitive, detailed evaluation of the textual evidence. In particular, Justice Scalia rebuked EPA for the somewhat disingenuous claim that it had to ignore the context of the statute and apply the same definition to all parts of the Clean Air Act (all citations omitted):

The Act-wide definition says that an air pollutant is “any air pollution agent or combination of such agents, including any physical, chemical, biological, [or] radioactive . . . substance or matter which is emitted into or otherwise enters the ambient air.” In Massachusetts, the Court held that the Act-wide definition includes greenhouse gases because it is all-encompassing; it “embraces all airborne compounds of whatever stripe.” But where the term “air pollutant” appears in the Act’s operative provisions, EPA has routinely given it a narrower, context-appropriate meaning.

That is certainly true of the provisions that require PSD and Title V permitting for major emitters of “any air pollutant.” Since 1978, EPA’s regulations have interpreted “air pollutant” in the PSD permitting trigger as limited to regulated air pollutants—a class much narrower than Massachusetts’ “all airborne compounds of whatever stripe[.]” And since 1993 EPA has informally taken the same position with regard to the Title V permitting trigger, a position the Agency ultimately incorporated into some of the regulations at issue here. Those interpretations were appropriate: It is plain as day that the Act does not envision an elaborate, burdensome permitting process for major emitters of steam, oxygen, or other harmless airborne substances. It takes some cheek for EPA to insist that it cannot possibly give “air pollutant” a reasonable, context-appropriate meaning in the PSD and Title V contexts when it has been doing precisely that for decades.

Of Massachusetts, the Court said:

Massachusetts did not invalidate all these longstanding constructions. That case did not hold that EPA must always regulate greenhouse gases as an “air pollutant” everywhere that term appears in the statute, but only that EPA must “ground its reasons for action or inaction in the statute,” rather than on “reasoning divorced from the statutory text[.]” EPA’s inaction with regard to Title II was not sufficiently grounded in the statute, the Court said, in part because nothing in the Act suggested that regulating greenhouse gases under that Title would conflict with the statutory design. Title II would not compel EPA to regulate in any way that would be “extreme,” “counterintuitive,” or contrary to “‘common sense.’” At most, it would require EPA to take the modest step of adding greenhouse-gas standards to the roster of new motor-vehicle emission regulations.

Justice Scalia even quoted the JEP amicus brief on page 14 of his opinion:

As certain amici felicitously put it, while Massachusetts “rejected EPA’s categorical contention that greenhouse gases could not be ‘air pollutants’ for any purposes of the Act,” it did not “embrace EPA’s current, equally categorical position that greenhouse gases must be air pollutants for all purposes” regardless of the statutory context.

Regarding EPA’s claim that it had executive discretion to simply rewrite the thresholds, Justice Scalia noted EPA’s own admission that the thresholds simply weren’t designed for GHGs, which occur in cosmically large amounts compared with traditional pollutants. He wrote:

We conclude that EPA’s rewriting of the statutory thresholds was impermissible and therefore could not validate the Agency’s interpretation of the triggering provisions. An agency has no power to “tailor” legislation to bureaucratic policy goals by rewriting unambiguous statutory terms. Agencies exercise discretion only in the interstices created by statutory silence or ambiguity; they must always “‘give effect to the unambiguously expressed intent of Congress.’” It is hard to imagine a statutory term less ambiguous than the precise numerical thresholds at which the Act requires PSD and Title V permitting. When EPA replaced those numbers with others of its own choosing, it went well beyond the “bounds of its statutory authority.”

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The Tailoring Rule is not just an announcement of EPA’s refusal to enforce the statutory permitting requirements; it purports to alter those requirements and to establish with the force of law that otherwise-prohibited conduct will not violate the Act. 

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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. Under our system of government, Congress makes laws and the President, acting at times through agencies like EPA, “faithfully execute[s]” them. The power of executing the laws necessarily includes both authority and responsibility to resolve some questions left open by Congress that arise during the law’s administration. But it does not include a power to revise clear statutory terms that turn out not to work in practice.

Although this portion of the Court’s decision is a triumph for statutory interpretation, separation of powers, and common sense, the remainder of the opinion is somewhat less exciting. Justice Scalia goes on to conclude that EPA’s permitting process for using control technology on GHGs was reasonable:

We acknowledge the potential for greenhouse-gas BACT to lead to an unreasonable and unanticipated degree of regulation, and our decision should not be taken as an endorsement of all aspects of EPA’s current approach, nor as a free rein for any future regulatory application of BACT in this distinct context. Our narrow holding is that nothing in the statute categorically prohibits EPA from interpreting the BACT provision to apply to greenhouse gases emitted by “anyway” sources.

Justice Breyer (joined by Justices Ginsburg, Sotomayor, and Kagan) wrote an opinion concurring in Justice Scalia’s affirmance of the BACT regulations, but would have upheld the EPA’s rewriting of the PSD thresholds:

But I do not agree with the Court that the only way to avoid an absurd or otherwise impermissible result in these cases is to create an atextual greenhouse gas exception to the phrase “any air pollutant.” After all, the word “any” makes an earlier appearance in the definitional provision, which defines “major emitting facility” to mean “any . . . source with the potential to emit two hundred and fifty tons per year or more of any air pollutant.” §7479(1) (emphasis added). As a linguistic matter, one can just as easily read an implicit exception for small-scale greenhouse gas emissions into the phrase “any source” as into the phrase “any air pollutant.” And given the purposes of the PSD program and the Act as a whole, as well as the specific roles of the different parts of the statutory definition, finding flexibility in “any source” is far more sensible than the Court’s route of finding it in “any air pollutant.”

Justice Alito’s concurrence/dissent (joined by Justice Thomas) took issue with the Court’s conclusion on the permitting process, arguing that issuing permits for certain sources of GHGs makes little sense of the statute:

Under the Court’s interpretation, a source can emit an unlimited quantity of greenhouse gases without triggering the need for a PSD permit. Why might Congress have wanted to allow this? The most likely explanation is that the PSD permitting process is simply not suited for use in regulating this particular pollutant. And if that is so, it makes little sense to require the installation of BACT for greenhouse gases in those instances in which a source happens to be required to obtain a permit due to the emission of a qualifying quantity of some other pollutant that is regulated under the Act.

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BACT analysis, like the rest of the Clean Air Act, was developed for use in regulating the emission of conventional pollutants and is simply not suited for use with respect to greenhouse gases. I therefore respectfully dissent from Part II–B–2 of the opinion of the Court.

Justice Scalia’s opinion avoids the nightmare I envisioned after the Court’s decision in EPA v. EME Homer City. Although a majority of justices voted for each part of Justice Scalia’s opinion (5-4 for I, II-A and II-B-1; 7-2 for II-B-2), it’s important not to overestimate the extent of agreement on the Court. If this case is any indication, EPA’s inability to rewrite statutes willy-nilly rests on a single vote.



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