At the end of June, in a 5-4 opinion, in Ohio v. Environmental Protection Agency, the U.S. Supreme Court granted applications for a stay of the implementation of the “Good Neighbor” Plan, the EPA’s federal emissions reduction rule, set in 2015. The application of this rule was intended to address transboundary ozone pollution that can exacerbate health hazards. As previously explained by ELM, the Clean Air Act’s Good Neighbor provision enabled the EPA to require each state to implement regulations meant to reduce emissions that would restrict “upwind” states from preventing “downward” states from maintaining National Ambient Air Quality Standards.

After states were required to submit plans to demonstrate how they would comply with the Good Neighbor Plan and reduce emissions that impacted other states, the EPA rejected 21 states’ plans since they proposed no changes, and also addressed two states that failed to submit any plan at all.

The EPA subsequently issued a federal plan requiring power plants and other industrial facilities in these 23 states to implement more stringent requirements and controls. It was this federal intervention by the EPA that became the grounds for the legal challenge by several states and other affected private entities, requesting that the courts at least temporarily block the EPA’s plan. The applicants argued that the plan could lead to “disaster,” steaming from electrical power-grid chaos, whereas the EPA argued that such claims were speculative, and only resulted in a delay harmful to public health.

On June 27, the Supreme Court, without a full briefing or argument, held that the EPA’s federal implementation of its Good Neighbor Plan was stayed pending disposition of the applicants’ petition for review in the U.S. Court of Appeals for the D.C. Circuit Court and any timely petition for writ of certiorari. In the majority opinion, Justice Neil Gorsuch applied the four-factor test that determines whether a stay is to be granted, assessing:

• Likelihood of the applicants’ success on the merits;
• Whether the applicants face irreparable harm;
• Whether the stay will substantially injury other interested parties; and
• Where the public interest lies.

The majority focused primarily on the applicants’ likelihood of success, finding that the applicants were likely to succeed in arguing that the EPA’s federal plan was arbitrary or capricious under the Clean Air Act. The court found that the EPA did not sufficiently address the concern of commenters during the rulemaking process what would happen if some states dropped out of the federal plan, despite the fact the EPA had included a provision that explicitly indicated the rule would still apply if any state(s) dropped out. The court further explained that this provision still did nothing to address the issue of whether the emissions requirements would still be justified if fewer states implemented the plan.

The dissent, drafted by Justice Amy Coney Barrett, came down on the other side of the assessment of the applicants’ likelihood of success. To the contrary, the dissenting justices found that the applications were unlikely to succeed on the merits in the lower courts, finding that the applicants’ pathway faced significant procedural obstacles and was contradicted by factual evidence in the record. The dissenting justices further found that the EPA’s emission-calculating methodology was not dependent upon the number of states that would implement the plan.

Although the Good Neighbor Plan has been many years in the making, undergoing a rulemaking process spanning a couple of administrations, we will have to wait a bit longer to see what the D.C. Circuit Court’s view of good neighborliness is.