United States: Gavel To Gavel: Case Could Affect Agency Jurisdiction

Pending before the U.S. Supreme Court is a case with broad implications for the Environmental Protection Agency's power and agency power more broadly. The case, West Virginia v. EPA, focuses on the Obama administration's Clean Power Plan (CPP), which sparked controversy when promulgated in 2015 for using generation shifting measures. These measures encourage shifting electricity generation from higher-emitting sources to lower-emitting sources including forcing higher-emitting sources to subsidize operations of lower-emitting sources.

While the CPP was never fully implemented, its repeal and replacement by the Trump administration's Affordable Clean Energy rule (ACE) was brought before the U.S. Court of Appeals for the D.C. Circuit, which held that EPA's reasoning for abandoning CPP was erroneous. Thus, the centerpiece of the pending claim – does the Clean Air Act grant EPA the power to govern CO2 emissions from existing power plants by using "outside-the-fenceline" measures? Outside-the-fenceline measures encompass acts outside the generator's facility. In contrast, inside-the-fenceline measures require updates to facility equipment or processes to achieve lower emissions.

Opponents contend that the CPP and outside-the-fenceline measures violate the "major questions" doctrine because Congress did not clearly grant EPA power to overhaul large swathes of the economy as is required when delegating authority to an agency to make "vast economic and politically significant decision." Specifically, opponents argue that the CPP would have cost billions, altered a significant sector of the economy, and allowed the agency to make policy choices solely within Congress' purview.

Proponents argue the "major questions" doctrine is not applicable because the CPP's financial and policy significance was minor as evidenced by the CPP goals being met without the CPP's implementation; states were not compelled to utilize generation shifting measures; and drawing a line between the measures is flawed as inside-the-fenceline measures could have more significant consequences than those outside-the-fenceline.

Despite the significant issues raised, the Supreme Court may sidestep addressing them. Lurking in the background is a question of standing. The EPA is considering a new rule without outside-the-fenceline measures (eliminating the major questions doctrine issue). Thus, EPA argued the current claim is not ripe. This provides the court an opportunity to avoid addressing significant issues by dismissing the matter.

* This article first appeared in The Journal Record on March 30, 2022, and is reproduced with permission from the publisher.

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