Supreme Court May Consider EPA’s Regulation of Greenhouse Gases under the Clean Air Act

The EPA may be headed back to the Supreme Court.

On September 30, the Court will consider a raft of petitions for certiorari in Coalition for Responsible Regulation v. EPA (“Coalition”), 684 F.3d 102 (D.C. Cir. 2012) (per curiam), the first major challenge to EPA’s implementation of greenhouse gas (“GHG”) regulations under the Clean Air Act (the “Act”). While certiorari is never guaranteed, anyone with an interest in environmental and administrative law should keep a close eye on Coalition. It just may be the biggest environmental case to reach the Supreme Court in years.

Six years have passed since the Court’s landmark decision in Massachusetts v. EPA, 549 U.S. 497 (2007). In that case, a group of states and cities challenged the agency’s determination not to regulate emissions of carbon dioxide and other GHGs from light-duty motor vehicles under the Act. The Court first found that Massachusetts had standing because it was faced with an actual and imminent threat of injury due to climate change. The Court then held that GHGs fit the Act’s expansive definition of “air pollutant.” Accordingly, the agency was obliged to make a determination whether GHGs could be expected to endanger health or welfare or to provide a reasonable explanation for not making that determination. Notably, the Court split 5-4, with Chief Justice Roberts and Justice Scalia authoring separate dissents.

Massachusetts only directly concerned a challenge to EPA’s failure to regulate GHG emissions from new motor vehicles under Title II of the Act. However, the opinion “spurred a cascading series of [GHG]-related rules and regulations,” of great reach and impact on all types of industry. Coalition, 684 F.3d at 114.

First, EPA found that GHGs as emitted from motor vehicles endanger public health and welfare by contributing to climate change (the “Endangerment Finding”). Next, it promulgated GHG emission standards for cars and light trucks as part of a fuel-economy rulemaking (the “Tailpipe Rule”).

Under EPA’s interpretation of the Act, this step automatically triggered inclusion of GHG emissions in the Act’s preconstruction permitting program, which applies to major emitting facilities that have the potential to emit over 100 or 250 tons per year (depending on the type of facility). To incorporate GHG regulations into these permits, EPA decided to issue two additional rules. First, in the “Timing Rule,” the agency determined that the permit requirements would not kick in until the Tailpipe Rule took effect—on January 2, 2011. Second, in the “Tailoring Rule,” EPA adjusted the statutory threshold for facilities initially required to obtain GHG permits, from facilities with the potential to emit 100 or 250 tons per year of GHG emitted to (depending on the program) 75,000 or 100,000 tons per year—an increase of three orders of magnitude. EPA determined the Tailoring Rule was necessary because millions of sources emit over 100 tons of GHGs per year, and it would be inconsistent with Congress’ intent and administratively and economically infeasible to immediately impose permit requirements on all of them.

Numerous states and industry groups sought review of these four rules (the Endangerment Finding, the Tailpipe Rule, the Timing Rule, and the Tailoring Rule) in the D.C. Circuit. Their petitions were consolidated with an “arising after” challenge to EPA’s interpretation that all regulated pollutants were included in the preconstruction permitting program as the Coalition case.

In June 2012, the Circuit panel (then-Chief Judge Sentelle and Judges Rogers and Tatel) upheld the Endangerment Finding and Tailpipe Rule as neither arbitrary nor capricious. It dismissed the challenged to the Timing and Tailoring Rules, and to EPA’s historic interpretation of the Act, for lack of standing. Those Rules did not injure the petitioners, the panel explained, because GHG standards were automatically incorporated into the permit programs by operation of statute, and the Rules actually mitigated any injuries suffered by the petitioners by delaying the impact and lessening the initial scope of the new requirements.

In December 2012, the D.C. Circuit denied en banc review of the Coalition case, over dissents from Judges Brown and Kavanaugh. In a statement concurring in the denial, the original panel suggested that the dissenters’ real objection was not to the panel opinion, but rather to the Supreme Court’s earlier holding in Massachusetts.

Many of the state and industry petitioners in Coalition have filed for certiorari. Those petitions have been distributed for conference on September 30, a mere six weeks from now. All four dissenters in Massachusetts remain on the Court, and should they wish to revisit the issue of whether and how GHG regulation is to be carried out under the Act, their votes alone would ensure the case is heard. Notably, the majority in Massachusetts suggested that the “unusual importance of the underlying issue” of climate change makes certiorari particularly appropriate, 549 U.S. at 506. From industry, to the agency, to environmental advocates, all eyes will be on the Court this fall as it considers whether to revisit that issue.

Disclaimer: BakerHostetler represented certain parties in the circuit court proceedings in Coalition for Responsible Regulation v. EPA.