United States: Legal Challenges To U.S. EPA's Clean Power Plan Continue In The D.C. Circuit And U.S. Supreme Court

Last Updated: February 26 2016
Article by Daniel P. Hido

The legal battle over the Clean Power Plan ("CPP") continues to take shape, with many new developments occurring in the final months of 2015 and the first few weeks of 2016. When the U.S. EPA announced the final rule on August 3, 2015, it was immediately met by legal challenges from states and industry. However, as previously reported in The Climate Report, the United States Court of Appeals for the District of Columbia dismissed these challenges as premature, because the final rule had not yet been published in the Federal Register.

The CPP was finally published on October 23, 2015. See 80 Fed. Reg. 64966. Upon publication, dozens of states and industry groups again challenged the rule in the D.C. Circuit. See West Virginia v. EPA, No. 15-1363. At bottom, petitioners claim that EPA lacks authority under the Clean Air Act ("CAA") to issue the CPP. Before reaching the merits of that claim, however, the D.C. Circuit first addressed several procedural motions. One of those motions worked its way to the U.S. Supreme Court, leading to a dramatic result.

Petitioners Seek Stay of the Rule. Petitioners asked the D.C. Circuit to stay the CPP pending judicial review. Petitioners asserted that a stay was necessary because states, businesses, and local communities must immediately take steps to meet deadlines imposed by the CPP, including submission of a State Implementation Plan ("SIP") by September 2016.

Petitioners further contended that businesses and local communities would be irreparably harmed if the rule was not stayed. For example, according to petitioners, because the CPP focuses on moving from coal-fired to natural-gas-fired power plants, existing coal-fired plants, as well as associated businesses such as mines, railways, and equipment manufacturers, would be forced to shut down. Petitioners also claimed that the CPP would harm the reliability of electric grids and cause electricity prices to rise, thereby irreparably harming the general public. Lastly, petitioners asserted that they were likely to prevail on the merits because EPA lacked the legal authority to issue the rule.

EPA responded that the rule is legal and that petitioners would not suffer any irreparable harm if the rule remains in place pending judicial review. EPA noted that states have up to three years to submit their final SIPs if they receive an extension, and that the rule does not require any changes to be made until 2022, with additional phasing-in through 2030. EPA also disputed petitioners' assertions of irreparable harm in the energy industry, claiming that the rule simply builds upon preexisting industry trends.

In reply, petitioners countered that the far-off deadlines and phasing-in nature of the rule means that EPA cannot demonstrate any public harm if the rule is stayed.

On January 21, 2016, the D.C. Circuit denied petitioners' motions to stay the CPP, holding that petitioners failed to satisfy "the stringent requirements for a stay pending court review." Undeterred, on January 26, 2016, petitioners asked the Supreme Court to stay the CPP, reiterating in their application to the Supreme Court that a stay is necessary to prevent irreparable harm to states and industry while the CPP is being litigated, and further emphasizing that EPA lacks CAA authority to issue the rule. EPA, again, countered that the agency has the authority to issue the rule and that petitioners would not suffer irreparable harm, especially because the D.C. Circuit has now agreed to expedite its hearing of the underlying case.

On February 9, 2016, the Supreme Court voted 5–4 to stay the CPP. The one-page Order does not provide the reasoning for the Court's decision. The Order also stays the rule pending disposition of petitions for review in the Supreme Court, if sought. The Supreme Court's ruling may prefigure how it will rule on the merits if the case does end up in the Court, which now seems likely.

Challengers Seek Expedited Judicial Review and Bifurcated Briefing. In addition to seeking a stay, petitioners have asked the D.C. Circuit to expedite the briefing schedule and hold oral arguments on their challenges in the spring of 2016. Just as they argued in support of a stay, petitioners contended that expedited review was necessary because the CPP's deadlines require states and industry to take immediate measures to begin implementing the rule, which will cause irreparable harm.

Petitioners also asked the D.C. Circuit to create two separate briefing schedules: one related to EPA's legal authority to issue the rule and a second on state and implementation-related programmatic issues. Petitioners argued that these issues are so complex that they warrant separate briefing.

In opposing bifurcation, EPA disputed that the issues involved are so complex as to require bifurcated briefing and also argued that petitioners had failed to articulate a sound basis for separating the issues. EPA further asserted that bifurcated briefing would ultimately delay resolution of the issues by creating potentially duplicative rounds of briefing and oral argument. Lastly, EPA argued that the bifurcation and scheduling motions ignored the fact that the D.C. Circuit had yet to rule on petitioners' motions to stay the rule pending appeal. EPA contended that the court's decision on a stay would have an impact on the merits briefing of the case, and therefore the motions for expedited review and bifurcated briefing were premature.

On January 21, 2016, the D.C. Circuit granted petitioners' motion for expedited judicial review. Regarding the bifurcated briefing issue, the court ordered the parties to submit a proposed briefing format, reminding the parties that "the court looks with extreme disfavor on repetitious submissions." Oral argument on the challenges to the CPP will be held on June 2, 2016.

States and Cities Join EPA in Defense of the CPP. Although publication of the CPP triggered a wave of challenges from states and industry, a coalition of 18 states, six cities, and one county, led by New York Attorney General Eric Schneiderman, intervened in the consolidated challenges for the purpose of defending the rule. Attorney General Schneiderman pointed to the fact that New York had reduced greenhouse gas emissions by 45 percent between 2005 and 2014 as evidence that the CPP's requirement that existing plants reduce emissions by 32 percent by 2030 is feasible.

In support of intervention, the coalition cited the negative effects that climate change has on industry and their citizens. Iowa, for example, asserted that climate change negatively affects the state's agricultural industry. Virginia, for its part, pointed to rising sea levels that threaten the Hampton Roads metropolitan area, as well as Naval Station Norfolk, the largest naval base in the world, and other military bases in the state.

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.

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