Read the opinion by the U.S. Supreme Court

In a 5-4 opinion on Thursday, the U.S. Supreme Court temporarily stayed the enforcement of the Environmental Protection Agency’s “Good Neighbor Plan” under the Clean Air Act.

Under the Good Neighbor rule, the EPA required states to create plans that achieved compliance with the 2015 National Ambient Air Quality standards. In early 2023, after reviewing the plans of 23 states, the EPA determined that those plans were inadequate and proceeded to issue its own plan. EPA’s Good Neighbor Plan required industries and power plants in upwind states to cut ozone pollution that drifts into “downwind” states.

As expected, a wave of litigation ensued, resulting in seven appellate courts blocking the EPA’s disapproval of many of the state plans. However, 11 states remained subject to the EPA’s plan.

Various states, joined by energy companies and industry trade groups. challenged the Good Neighbor Plan in the United States Court of Appeals for the District of Columbia.

After the D.C. Circuit refused to suspend the EPA’s plan pending a decision on the merits, some states and groups filed emergency applications with the U.S. Supreme Court.

Justice Brett Kavanaugh, who authored the ruling in Ohio et. al. v. Environmental Protection Agency et. al., reasoned that a stay was warranted because the EPA failed to reasonably explain its actions in rejecting the states’ plans and that the challenging parties are likely to prevail in the litigation.

If the courts ultimately strike down EPA’s Good Neighbor Plan by upholding the states’ original plans, it could save billions in required technological upgrades by the electric, natural gas, and other industries. Likewise, many experts argue that relief from the EPA’s plan will benefit the reliability of the electric power grid by cutting unnecessary regulations that burden the industry.

Our environmental and litigation practice area teams will continue to monitor this situation within the court system.