West Virgina v. EPA: Enthroning or Dethroning a Regulatory Czar? (2022)

From MasterResource

ByRichard W. Fulmer

“The Supreme Court’s common sense decision states that federal regulatory agencies cannot bypass Congress and unilaterally impose unprecedented and economically and politically significant mandates. Nor can they ignore their own legislatively-approved mandates, stretching them far beyond what was intended. Finally, they cannot extend their reach outside their own expertise.”

Writing inThe New Republic,Simon Lazarus, retired Senior Counsel for theConstitutional Accountability Center, charges that theSupreme Court has appointed itself to be America’s regulatory czar, declaring:

The high court cast aside the peoples’ elected representatives to enact the climate denial agenda of the mega-donors who funded their nominations.

Lazarus rests his case on claims that the Court:

  1. Had no right to take the case
  2. Ignored the clear text of the law – specificallySection 111(d) of the Clean Air Act
  3. Ignored the interests and stated desires of American utility companies

In making his argument, Lazarus adopted the now-familiar debate tactic of accusing the opposing side of doing exactly what he and his side are doing, namely creating regulatory czars and, in the process, bypassing the country’s elected representatives.

Background

In June 2014, the Environmental Protection Agency (EPA)proposedits Clean Power Plan to address carbon dioxide emissions from existing fossil fuel power plants. The plan gave the EPA the power to order coal-fired plants to reduce CO2emissions by converting to natural gas and to order natural gas plants to convert to renewable sources such as wind turbines or solar panels. “Conversion” would entail razing the old plant and building a new facility to replace it. Heretofore, the EPA had limited itself to requiring specific emissions controls on existing plants, rather than ordering them to be replaced outright.

In addition, the EPA’s new rule would mandate a cap-and-trade scheme by which existing plants could meet emissions requirements by purchasing emissions credits. This, even though Congress has rejected cap-and-trade schemes in the past.

In 2016, the Court issued astayon the plan’s implementation stating that it could not go forward until all of the pending legal challenges had been heard. In 2019, under a new administration, the EPA determined that the plan exceeded its authority under Section 111(d) of the Clean Air Act (CAA). According to the Court’sWV v EPAdecision:

The Agency determined that the interpretive question raised by the Clean Power Plan fell under the major questions doctrine. Under that doctrine, it determined, a clear statement is necessary for a court to conclude that Congress intended to delegate authority “of this breadth to regulate a fundamental sector of the economy.”

Accordingly, the EPA proposed to replace its Clean Power Plan rule with theAffordable Clean Energy rulethat would be restricted to mandating that existing facilities reduce emissions via equipment upgrades and improved operating procedures. The change was challenged by some states and private parties, and an appeals court remanded both plans back to the EPA for further consideration.

In summary, asCato Instituteresearch fellowWilliam Yeatmanwrites:

Obama ordered the EPA to issue the rule; Trump ordered the EPA to replace Obama’s rule; and then Biden ordered EPA to replace Trump’s rule.

What Yeatman terms “executive lawmaking” results in endlessregime uncertaintyas power in Washington changes hands and each successive president uses his “pen and phone” to bypass Congress.

Should the Court Have Taken the Case?

Lazarus argues that SCOTUS killed an already dead plan. But, if all the Court did was drive a stake through the heart of a dead rule, what’s all the fuss about? The answer is that the Biden administration wants to raise the dead, which, the Court said, is precisely what gave it the right to hear the case:

The Government’s argument in this case boils down to its representation that EPA does not intend to enforce the Clean Power Plan prior to promulgating a new Section 111(d) rule. But “voluntary cessation does not moot a case” unless it is “absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.”

Lazarus and his allies want the EPA to repeat the “wrongful behavior” by reinstating the Clean Power Plan, arguing that grid-wide mandates constitute the “best system of emission reduction” (BSER) available.

Did the Court Flout the Law?

The relevant paragraphs of Section 111(d) of the Clean Air Act states:

(d) Standards of performance for existing sources; remaining useful life of source

(1) The Administrator shall prescribe regulations which shall establish a procedure similar to that provided by section 7410 of this title under which each State shall submit to the Administrator a plan which (A) establishes standards of performance for any existing source for any air pollutant (i) for which air quality criteria have not been issued or which is not included on a list published under section 7408(a) of this title or emitted from a source category which is regulated under section 7412 of this title but (ii) to which a standard of performance under this section would apply if such existing source were a new source, and (B) provides for the implementation and enforcement of such standards of performance….

In promulgating a standard of performance under a plan prescribed under this paragraph, the Administrator shall take into consideration, among other factors, remaining useful lives of the sources in the category of sources to which such standard applies.

At the heart of the debate is whether the words “existing source” applies to individual power plants or to the nation’s entire electrical grid. The last paragraph, which refers to the “remaining useful lives of the sources,” suggests that the law covers individual facilities rather than the whole grid. As the majority opinion states:

The issue here is whether restructuring the Nation’s overall mix of electricity generation, to transition from 38% to 27% coal by 2030, can be the BSER within the meaning of Section 111.

Precedent teaches that there are “extraordinary cases” in which the “history and the breadth of the authority that [the agency] has asserted,” and the “economic and political significance” of that assertion, provide a “reason to hesitate before concluding that Congress” meant to confer such authority….

Indeed, the Agency nodded to the novelty of its approach when it explained that it was pursuing a “broader, forward-thinking approach to the design” of Section 111 regulations that would “improve the overall power system,” rather than the emissions performance of individual sources, by forcing a shift throughout the power grid from one type of energy source to another….

On EPA’s view of Section 111(d), Congress implicitly tasked it, and it alone, with balancing the many vital considerations of national policy implicated in the basic regulation of how Americans get their energy. There is little reason to think Congress did so. EPA has admitted that issues of electricity transmission, distribution, and storage are not within its traditional expertise.

While critics of the Court’sWV v EPAdecision claim that it took power away from the “experts,” even the EPA admits that it does not have the expertise to implement its plan, risking severe disruptions to the nation’s energy supply and economy.

Did the Court ignore special interests?

Lazarus charges that the Court’s decision was a corrupt bargain:

[T]hese ultra-conservative justices’ modus operandi has “from the beginning” been to “obstruct” EPA, and to conform national policy to the agendas of their Republican patrons and sponsors, and the megadonors who fund those sponsors who, lest we forget, funded the campaigns that secured these justices’ nominations and confirmations.

But then he turns around and complains that the decision doesn’t give corporate special interests what they want:

Defending EPA’s approach to regulating greenhouse gases as parties was a phalanx of mega-power companies, including Con Edison, Exelon, National Grid USA, and Pacific Gas & Electric…

[Environmental advocateSean] Donahueobserved that “Power companies supported EPA because they want regulatory stability, not constant litigation, and they prefer flexible approaches that include things like emissions averaging and trading.”

[T]hese anti-regulatory judicial zealots did not deign to mention the affected industries’ contrary view, let alone explain why—in this hugely consequential case—the most pro-business court in history ignored a major affected industry in order to bend national environmental policy to fit the interests of West Virginia’s Republican Attorney General and his carbon-coddling allies.

While Lazarus claims that:

These approaches [emissions averaging and trading], of course, are the very types of cost-efficient, flexible, minimally disruptive techniques for displacing fossil fuels that Roberts and his colleagues ruled out-of-bounds.

the Court did nothing of the kind. Instead, it pushed the issue to Congress, which has the constitutional duty to deal (or to choose not to deal) with such nationwide issues.

Conclusion

The Supreme Court’s common sense decision states that federal regulatory agencies cannot bypass Congress and unilaterally impose unprecedented and economically and politically significant mandates. Nor can they ignore their own legislatively-approved mandates, stretching them far beyond what was intended. Finally, they cannot extend their reach outside their own expertise.

Contrary to Lazarus’s claims, the Court did not set itself up as a regulatory czar. Instead, it stopped the EPA from ascending to the throne. Nor did the Court “cast aside the peoples’ elected representatives.” Instead, it took the issue away from unelected, unaccountable bureaucrats and placed it back in the hands of the nations’ elected representatives.

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