United States: Supreme Court Rejects EPA’s Expansive Regulation Of Greenhouse Gas Emissions, Affirms Regulation Of Existing Permitted Sources

In Utility Air Regulatory Group v. EPA, 573 U.S. __, 2014 WL 2807314 (June 23, 2014), the Supreme Court affirmed the power of the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions from major emitting facilities, such as large factories and power plants, which already emit other pollutants and operate under a Clean Air Act (CAA) permit. These already-permitted or "anyway" sources account for roughly 83% of all stationary-source greenhouse gas emissions in the United States. But the Court rejected the EPA's expansion of its regulatory power beyond the "anyway" sources to millions of smaller stationary sources, including schools, churches, office and apartment buildings, and retail stores, which account for only 3% of emissions.

As a practical matter, the Court's opinion confirms the EPA's power to combat global warming by forcing large industrial sources and manufacturers of new motor vehicles—which account for the vast majority of all greenhouse gas emissions in the United States—to develop and implement technology to curb such emissions. As Justice Scalia, who authored the majority opinion, remarked from the bench when announcing the Court's decision: "EPA is getting almost everything it wanted in this case."

A. BackgroundThe EPA regulates greenhouse gas emissions for all stationary sources and industry groups object.

Utility Air Regulatory Group and the consolidated cases presented an industry challenge to the EPA's regulation of greenhouse gas emissions from all stationary sources that exceeded the statutory emissions threshold established by the CAA. The regulations were enacted under the Obama Administration in 2011, following the Supreme Court's decision in Massachusetts v. EPA, 549 U.S. 497 (2007), which established that greenhouse gases were "air pollutants" that could be regulated under the CAA if they endanger public health and welfare. Prior to that decision, the EPA under the Bush Administration had refused to regulate greenhouse gases.

In 2009, the EPA made an "endangerment finding" based on the global warming effect of greenhouse gases, which obligated the agency to regulate emissions from new motor vehicles. Following a longstanding agency interpretation of the CAA that read the term "air pollutant" consistently across all provisions of the Act, the EPA treated its regulation of mobile-source emissions as a "trigger" for regulating the identical greenhouse gas pollutants from stationary sources governed by Title V and the Act's Prevention of Significant Deterioration (PSD) provisions. Industry groups appealed and the Court agreed to review the EPA's "triggering rule."

B. The Court rejects the EPA's "triggering rule," but affirms its authority to implement greenhouse gas controls for "anyway" sources.

Writing for a 5-4 majority of the Court, Justice Scalia rejected the EPA's "triggering rule," reasoning that while the CAA's "act wide" definition of "any air pollutant" includes greenhouse gases as announced in Massachusetts, the definition of "air pollutant" in the stationary-source provisions of the Act must be given a "narrower, context-appropriate meaning." Rather than making the usual assumption that identical words in different parts of a statute are intended to have the same meaning, the Court relied on the "fundamental canon of statutory construction that words in a statute must be read in their context and with a view to their place in the overall statutory scheme." Under this principle, the Court determined that reading "any pollutant" to include greenhouse gases in the CAA's stationary-source provisions would produce absurd results. For example, the EPA's permitting program would expand from roughly 82,000 stationary sources to over six million sources; the costs of administering the program would balloon from $62 million to over $21 billion; and the EPA would be given an "unheralded power" to regulate a significant portion of the American economy—results that Congress could not have intended when it enacted the CAA.

Rejecting the position of the EPA and the four dissenting justices, the Court also held that EPA could not save its "unreasonable" interpretation of the CAA by tailoring implementation of the greenhouse gas regulation to apply to major emitters first and then gradually expanding it to smaller sources. As the EPA conceded, all six million soon-to-be-regulated small stationary sources exceeded the emission thresholds established by the CAA itself. Accordingly, the Court reasoned, the "tailoring rule" amounted to "rewriting the statutory thresholds" for air pollution, something that executive-branch agencies have no power to do. As the Court put it, allowing agencies to "tailor" unambiguous legislation to meet "bureaucratic policy goals" would "deal a severe blow to the Constitution's separation of powers."

Though the Court rejected EPA's "triggering rule," the Court agreed that EPA had the statutory authority to regulate greenhouse gases under the "best available control technology" (BACT) provisions applicable to "anyway" sources (major emitters that already operate under a CAA permit). Deferring to the EPA's reasonable construction of the BACT provisions, the Court acknowledged that the EPA also could require major emitters of other air pollutants to implement controls for greenhouse gases as well. As noted, these major sources account for 83% of all stationary greenhouse gas emissions.

Utility Air Regulatory Group affirms the EPA's immediate power under the BACT provisions to regulate the most significant emitters of greenhouse gas pollution, although it acknowledges that these large emitters amount to a "relative handful" of all pollution sources. Beyond the immediate effects of this decision, which the Court found to be both dictated by the CAA's language and not "disastrously unworkable," the opinion reaffirms the Roberts Court's close scrutiny of EPA and other agency decisions that either attempt to find new executive agency powers under long-extant statutes or may have significant economic impacts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions