The Supreme Court recently decided a case related to the Clean Power
Plan, an Obama-era regulatory scheme that would apply to the energy
industry across the country. The main holding of the opinion in West
Virginia v. EPA focused on the degree to which an administrative
agency may assert power over the states, and by extension the economy, by congressional
grant. In other words: how much authority may an administrative agency assert
without an explicit statutory grant of the powers it is trying to assert over a
specific process.
West Virginia involved a section
of the Clean Air Act, the New Source Performance Standards program (codified
in Section 111). That program seeks to regulate the release of substances into
the air not covered under the more specific National Ambient Air Quality
Standards (NAAQS, Sections 108-110) and Hazardous Air Pollutants (HAP, Section
112) regimes. The New Source Performance Standards program was made to regulate
stationary sources of air pollution “which may reasonably be anticipated to
endanger public health or welfare.” This has been interpreted to allow the
regulation of carbon dioxide as a greenhouse gas because climate change poses a
threat to the health and welfare of the public.
In 2015, the EPA interpreted its mandate
under this statute to allow the agency to develop emissions standards (per unit
of energy) that new and old energy producing sources must conform to called the
Clean Power Plan. For new sources, this meant producing energy using a
low-emissions process. For energy producers with coal plants already in use,
this meant conforming in one of three ways: (1) technical updates, which could
only effect minor benefits, (2) shifting to natural gas to produce energy, or (3)
shifting to renewables, like solar or wind. These three steps could be done in
three ways: (1) by reducing production at a facility, (2) building or investing
in a new plant with lower emissions, or (3) trading credits in a cap-and-trade
program.
Sources differed about the feasibility and
cost of the program, and it was never fully implemented because many states
moved to enjoin the EPA from enforcing it. When presidential administrations
changed, the EPA repealed the Clean Power Plan in favor of a much more modest
proposal called the Affordable Clean Energy Plan. Many states then sued to
enjoin implementation of the new rule and repeal of the Clean Power Plan. In January
2021, the D.C. Circuit Court of Appeals vacated the EPA’s repeal of the Clean Power
Plan and remanded the issue to the agency to reconsider. Presidential administrations
changed again immediately after, and the EPA moved the D.C. Circuit to stay
enforcement of the Clean Power Plan pending the promulgation of a new rule. The
Court granted the stay. Many states appealed the decision.
First, the West Virginia Court
had to determine the issue of standing. EPA argued that because the enforcement
of the Clean Power Plan was stayed, the Plaintiffs had no standing. The Court
saw it differently, writing that the issue actually falls under the mootness
doctrine. The doctrine of mootness removes jurisdiction to hear a case where the
conflict or controversy of the case is otherwise eliminated or resolved. The agency
had not shown to a reasonable certainty that the rule would never be enforced. Because
the EPA could still recommence enforcement of the Clean Power Plan, the
behavior that was ultimately the subject of the suit, the issue was not moot.
The next issue – the main issue – was
whether Section 111 of the Clean Air Act gave the EPA a mandate to enact
regulations that would require vast changes to the nation’s energy system. For
this, the Court examined and applied the “major questions doctrine.” The doctrine
requires examining the plain language of a statute to inform the extent of an administrative
agency’s mandate to promulgate rules for a practice or activity. The Court
examined precedent dealing with similar situations and reasoned that the West
Virginia case would appropriately be determined by reference to that
doctrine.
Though the EPA had implemented rules to
curb emissions of certain chemicals in the past – such as mercury – the statutory
grants in cases like that had been explicit enough to justify the rulemaking
done at the time. Additionally, in the case of mercury emissions, the
technology to all but eliminate the emissions was fairly easily implemented
across industry.
In this case, the Court noted, the EPA’s
rules would advance a set of policies – like cap-and-trade of carbon emissions –
that Congress has explicitly rejected in the past. Moreover, the generational shift
in power production mandated by the Clean Power Plan would have
extraordinary implications for the economy. The Court held that the language of
the statute did not grant the EPA the mandate to regulate to guide policy to that
extent.
The Court rejected the argument that EPA’s regulatory reach extended to reshaping the energy industry based on the statutory language of the provision in question. Looking at the decision narrowly, this removes the very strict standards set by the Clean Power Plan. Looking at the decision more broadly, West Virginia may restrain administrative agencies from overstepping their statutory grants of authority in a greater variety of contexts. The language the Court used seems to describe the doctrine as one that would prevent significant policymaking by administrative agencies in favor of legislation by Congress. However, given the size and scope of the Clean Power Plan (which would have cost trillions of dollars and effectively set energy policy for the nation) how often the doctrine will be applied to lesser situations remains to be seen.
