The Supreme Court’s decision released last Thursday in West Virginia, et al. v. EPA, 597 U.S. ___ (2022), reflects a decades-long shift in the composition of the Court, and is sure to be an important case in administrative law, the area of law which deals with regulations imposed on society by the executive branch agencies of the federal government. Over the last several decades, with increased concern about man-made climate change promoted in the news, activists have repeatedly urged industrialized nations to restrict or eliminate fossil fuels like coal, oil, and natural gas in favor of energy sources that don’t produce carbon-containing “greenhouse gas” emissions. Public opinion polling, and election results, show that voters in the U.S. are not very concerned about the issue of “climate change,” and attempts to implement restrictions on fossil fuels through the democratic process have met with only limited success. Consequently, activists have turned to the administrative regulatory state, and the courts, to impose their desired outcome.
During the George W. Bush administration, the U.S. Environmental Protection Agency (EPA) was sued by climate activists, some state attorneys general, and others, for denying the activists’ petition that the EPA issue regulations covering carbon emissions of new motor vehicles. The EPA had decided that it did not have the authority to do so, under the enabling legislation which Congress used in creating the agency. The case arrived at the Supreme Court in 2006, styled as Massachusetts v. EPA, 415 F. 3d 50, (2007). In a 5-4 decision, the majority opinion, written by Justice John Paul Stevens, held EPA did have such authority, even so broadly as to say that "On its face, the definition embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word 'any.'" The relevant portion of the law, as quoted by Justice Stevens, reads:
“The [EPA] Administrator shall by regulation prescribe (and from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare …”
(Emphasis added.) The question is, then, whether carbon dioxide, for example, is an “air pollutant” which Congress intended to be within the scope of EPA’s regulatory authority. The statutory definition of “air pollutant” is somewhat circular:
The term “air pollutant” means any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive (including source material, special nuclear material, and byproduct material) substance or matter which is emitted into or otherwise enters the ambient air.
In other words, an “air pollutant” is any “air pollution agent” that causes air pollution.
Chief Justice John Roberts, in his dissent, deferred to the EPA’s interpretation of its own authority under its enabling legislation, finding that the issue presented by petitioners was a non-justiciable “political question," and something that was best left to Congress to clarify. This is not uncommon for the Court to do, indeed there’s an established judicial doctrine called “Chevron deference” that pretty much lets agencies alone to interpret their enabling legislation themselves, except if the agency gets it egregiously wrong. Of the four Justices in the minority in this case, in which the Supreme Court authorized the EPA to begin regulating carbon emissions, three are still on the Court: Chief Justice Roberts, Justice Alito, and Justice Thomas, (R.I.P. Justice Scalia).
During the Obama Administration, the EPA began to extend its regulation of carbon emissions beyond what it had been required to do by the Supreme Court, and began the process to impose regulation on “stationary sources” like power plants and factories, not just motor vehicles. But the EPA soon determined that the strict limits Congress had provided for in its enabling act for “air pollutants” would require permits for ten of thousands of previously unregulated industries and businesses if applied to carbon emissions, which are typically released in quantities much larger, and by many more sources than the “air pollutants” previously regulated. A group of industrial organizations and activists sued the EPA, and the case arrived at the Supreme Court in 2014 as Utility Air Regulatory Group, et al. v EPA, 684 F. 3d 102 (2014).
Justice Scalia, writing for the 5-4 majority in the Utility Air case, remarked that "It is plain as day that the [Clean Air] Act does not envision an elaborate, burdensome permitting process for major emitters of steam, oxygen, or other harmless airborne substances." The Court held that EPA’s interpretation of its enabling act as regards regulation of carbon emissions from stationary sources was unreasonable, under Chevron deference analysis, because it wasn’t compelled to apply the global definition of “air pollutant,” which defined its overall authority, to the portion of the Clean Air Act pertaining to stationary sources, if doing so would, as EPA concluded, lead to such a vast increase in regulation as to be unmanageable for the agency. In other words, even if carbon emissions and “greenhouse gases” are within the EPA’s Congressional authority to regulate, the EPA historically has exercised that authority in a more limited fashion. “The Act-wide definition to which the Court gave a “sweeping” and “capacious” interpretation, [in Massachusetts v. EPA], is not a command to regulate, but a description of the universe of substances EPA may consider regulating under the Act’s operative provisions,” said the Court. Justice Scalia also observed that:
“[t]o be sure, Congress’s profligate use of ‘air pollutant’ where what is meant is obviously narrower than the Act-wide definition is not conducive to clarity. One ordinarily assumes “that identical words used in different parts of the same act are intended to have the same meaning.’” In this respect (as in countless others), the Act is far from a chef d’oeuvre of legislative draftsmanship. But we, and EPA, must do our best…”
(Citations omitted). The Court’s decision in Utility Air was fragmented, but there was a 5-4 majority for most of Justice Scalia’s opinion, consisting of Chief Justice Roberts and Justices Scalia, Kennedy, Alito, and Thomas. Again, three of the Justices in this majority are still on the Court. Justice Anthony Kennedy retired in 2018 and Justice Brett Kavanaugh was appointed to fill the vacancy by President Trump. Justice Scalia died in February 2016, but his seat on the Court was held over vacant by Senate Majority Leader Mitch McConnell until President Trump appointed Justice Neil Gorsuch in 2017.
Thanks to a shift in the climate on the Supreme Court, the decision in West Virginia v. EPA, written by Chief Justice Roberts for a solid 6-3 majority, effectively overrules the judicial activism of the Stevens majority in Massachusetts v. EPA, leaving the dissenters in that case in the majority today. Chief Justice Roberts, Justice Alito, and Justice Thomas were joined by Justices Gorsuch, Kavanaugh, and Barrett.
After an overview of the three regulatory authorities covering air pollution delegated by Congress to EPA, all of which are stated in terms of "public health" and concern with toxic substances in the air, Chief Justice Roberts then describes how the Obama Administration tried to extend that authority to cover carbon dioxide emissions, under what it termed the “Clean Power Plan.”
"Things changed in October 2015, when EPA promulgated two rules addressing carbon dioxide pollution from power plants—one for new plants under Section 111(b), the other for existing plants under Section 111(d). Both were premised on the Agency’s earlier finding that carbon dioxide is an 'air pollutant' that 'may reasonably be anticipated to endanger public health or welfare' by causing climate change. [...] Carbon dioxide is not subject to a NAAQS and has not been listed as a toxic pollutant."
The BSER ("best system of emission reduction") CO2 rules established by EPA for existing plants amounted to using the emission standards to mandate a three-phased shift from coal-fired power plants, to natural gas power plants, and ultimately to zero-carbon-emission sources like solar and wind. So the "best system of emission reduction" in the case of carbon dioxide was to ultimately get rid of the fossil fuel burning power plants entirely. Writes Chief Justice Roberts for the Court:
"The [EPA] identified three ways in which a regulated plant operator could implement a shift in generation to cleaner sources. [...] First, an operator could simply reduce the regulated plant’s own production of electricity. Second, it could build a new natural gas plant, wind farm, or solar installation, or invest in someone else’s existing facility and then increase generation there.
Finally, operators could purchase emission allowances or credits as part of a cap-and-trade regime. Under such a scheme, sources that achieve a reduction in their emissions can sell a credit representing the value of that reduction to others, who are able to count it toward their own applicable emissions caps."
So the Obama EPA would have implemented a wholesale shift in electricity production in the United States, including "cap-and-trade" carbon credits, mandated through the administrative bureaucracy, without Congress having voted for it.
"The point, after all, was to compel the transfer of power generating capacity from existing sources to wind and solar. The White House stated that the Clean Power Plan would 'drive a[n] . . . aggressive transformation in the domestic energy industry.' EPA’s own modeling concluded that the rule would entail billions of dollars in compliance costs (to be paid in the form of higher energy prices), require the retirement of dozens of coal-fired plants, and eliminate tens of thousands of jobs across various sectors."
"These projections were never tested, because the Clean Power Plan never went into effect. The same day that EPA promulgated the rule, dozens of parties (including 27 States) petitioned for review in the D. C. Circuit. After that court declined to enter a stay of the rule, the challengers sought the same relief from this Court. We granted a stay, preventing the rule from taking effect."
The Trump Administration EPA put the litigation on hold, reviewed the Clean Power Plan regulation, and ultimately scrapped it. "EPA eventually repealed the rule in 2019, concluding that the Clean Power Plan had been 'in excess of its statutory authority' ..." both because the relevant law only gave EPA the power to impose emissions controls "at a building, structure, facility, or installation" rather than the entire power grid, and because such a sweeping change in an entire industry falls within the Supreme Court's judge-created rule called the "major question doctrine" which requires Congress pass a law to do it.
"EPA argued that under the major questions doctrine, a clear statement [in the law from Congress] was necessary to conclude that Congress intended to delegate authority 'of this breadth to regulate a fundamental sector of the economy.'"
The Trump Administration EPA then promulgated a much more modest rule, called the Affordable Clean Energy (ACE) Rule, setting increased efficiency standards for power plants.
"A number of States and private parties immediately filed petitions for review in the D. C. Circuit, challenging EPA’s repeal of the Clean Power Plan and its enactment of the replacement ACE Rule. Other States and private entities— including petitioners here West Virginia, North Dakota, Westmoreland Mining Holdings LLC, and The North American Coal Corporation (NACC)—intervened to defend both actions."
All those suits were consolidated on appeal, and the D.C. Circuit held that EPA's interpretation of its statutory authority was incorrect, and the Clean Power Plan didn't have to have been scrapped, nor did the "major questions doctrine" apply.
Then the Biden Administration came in, and "Westmoreland, NACC, and the States defending the repeal of the Clean Power Plan all filed petitions for certiorari" before the U.S. Supreme Court.
After briefly addressing the Biden Adminstration's argument that the cases are moot now, which the Court concludes they're not because the Biden Administration fully intends to impose a rule similar to the Clean Power Plan if it were to win the appeal, the Court moves on to the merits.
On mootness:
"Here the Government 'nowhere suggests that if this litigation is resolved in its favor it will not' reimpose emissions limits predicated on generation shifting; indeed, it 'vigorously defends' the legality of such an approach. [...] We do not dismiss a case as moot in such circumstances."
The Court then reviews several instances where regulatory agencies claimed to exercise powers not explicitly given to them by Congress, from the FDA claiming power to regulate and even ban tobacco products, to CDC's COVID eviction moratorium, to EPA's claim to define greenhouse gases as an "air pollutant," and OSHA's attempt to impose a COVID vaccine mandate.
"Under our precedents, this is a major questions case. In arguing that Section 111(d) empowers it to substantially restructure the American energy market, EPA 'claim[ed] to discover in a long-extant statute an unheralded power' representing a 'transformative expansion in [its] regulatory authority.'"
(quoting Utility Air, 573 U. S. 302). Slightly earlier in the opinion, Chief Justice Roberts also quotes Utility Air, which challenged the EPA's redefinition of "air pollutant" to include greenhouse gases as applied to stationary sources.
"[I]n certain extraordinary cases, both separation of powers principles and a practical understanding of legislative intent make us 'reluctant to read into ambiguous statutory text' the delegation [of power] claimed to be lurking there. To convince us otherwise, something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to 'clear congressional authorization' for the power it claims."
In other words, to accomplish solutions to "major questions," Congress must pass a law explicitly giving the power to regulate these things to the administrative agency.
The Court examines the previous history of how the EPA has exercised its power, not over the entire power generation system of the country, but at the level of individual plants (reflecting EPA's historical view of its own authority), and also the fact that Congress had attempted to implement similar changes legislatively in the past, but politically rejected them. Also, notes the Court, the EPA having both the power to set the cap, and determine how to reach it, is too broad of an authority absent a clear statement from Congress.
"[T]he only interpretive question before us, and the only one we answer, is more narrow: whether the 'best system of emission reduction' identified by EPA in the Clean Power Plan was within the authority granted to the Agency in Section 111(d) of the Clean Air Act. For the reasons given, the answer is no."
Concluding the opinion, the Chief Justice writes:
"[...] Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible 'solution to the crisis of the day.' New York v. United States, 505 U. S. 144, 187 (1992). But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d). [...] A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body. The judgment of the Court of Appeals for the District of Columbia Circuit is reversed, and the cases are remanded for further proceedings consistent with this opinion.
It is so ordered."
So the effect of the Court's "major questions doctrine" is to force Congress to implement legislation which makes these kinds of changes through the political process, rather than having administrative agencies claim too much legislative power which properly belongs to Congress.
Interestingly, the concurring opinion by Justice Gorsuch, which Justice Alito joined, refers back to the U.S.'s first Chief Justice, John Marshall, in support of the "major questions doctrine":
"As Chief Justice Marshall put it, this means that 'important subjects . . . must be entirely regulated by the legislature itself,' even if Congress may leave the Executive 'to act under such general provisions to fill up the details.' Wayman v. Southard, 10 Wheat. 1, 42–43 (1825)."
And even more interestingly, Gorsuch and Alito also mention a book by one of the most prominent legal scholars arguing against the administrative state, Prof. Philip Hamburger of Columbia U., writing: "Today, some might describe the Constitution as having designed the federal lawmaking process to capture the wisdom of the masses. See P. Hamburger, Is Administrative Law Unlawful? 502–503 (2014)."
The concurrence, in addition to reinforcing the reasons why the "major questions doctrine" is necessary for separation of powers reasons, also notes: "When an agency claims the power to regulate vast swaths of American life, it not only risks intruding on Congress’s power, it also risks intruding on powers reserved to the States."
Justice Gorsuch, concluding:
"When Congress seems slow to solve problems, it may be only natural that those in the Executive Branch might seek to take matters into their own hands. But the Constitution does not authorize agencies to use pen-and-phone regulations as substitutes for laws passed by the people’s representatives. [...] In our Republic, “[i]t is the peculiar province of the legislature to prescribe general rules for the government of society.' Fletcher v. Peck, 6 Cranch 87, 136 (1810). Because today’s decision helps safeguard that foundational constitutional promise, I am pleased to concur."
Another reason to not favor the administrative state over legislation is that, besides being more democratic, law is much more stable than executive branch regulations, which can whipsaw back and forth with each change in presidential administration (a prominent example being the approval process for the Keystone XL pipeline). Writes Justice Gorsuch, "Legislation would risk becoming nothing more than the will of the current President, or, worse yet, the will of unelected officials barely responsive to him."
Requiring Congress to vote on major regulatory changes helps keep runaway bureaucracy in check, and provides some political accountability. Although this is probably not enough to contain the administrative regulatory state, it is a start.
—end—
The big picture is so simple. The Constitution is there to allow government but prevent tyranny. Letting an executive agency do whatever it wants or whatever a president tells it to do is a clear recipe for tyranny. The Supreme Court is doing the Lord's work here, putting our government back on a Constitutional basis. Great article (again), Dar!
Excellent column.