In a decision that effected a major change to the federal government’s ability to regulate, the Supreme Court of the United States struck down the Environmental Protection Agency’s greenhouse gasses rules. In its interpretation of a section of the Clean Air Act, the Supreme Court applied a legal principle that could impact far more government regulation than just the EPA’s regulation of emissions.
In West Virginia vs. EPA, West Virginia challenged an Obama Administration-era set of rules aimed at government coal-powered plants. The rules addressed carbon dioxide emissions from existing coal- and natural-gas-fired power plants. The EPA had promulgated a set of rules based on the authority it believed it had from Section 111(d) of the Clean Air Act. What was notable about these rules is that they did not contain measures that would have required power plant owners to operate their plants in a cleaner manner. Instead, they attempted to shift the overall mix of pollutants in the nation’s air. These rules incontrovertibly went a step beyond prior environmental regulations. Under the EPA’s rules, the agency decided the proportion of coal-fired power as part of the nation’s overall output should drop from 38 percent to 27 percent to reduce emissions.
The EPA Was Attempting to Reduce Production from Coal-Powered Plants
For its authority to do so, the EPA cited to the section of the law that allowed it to regulate emissions of non-criteria, non-hazardous air pollutants from stationary sources through the identification of the “best system of emission reduction” that is “adequately demonstrated.” In this case, the EPA’s rules required either a reduction of production of coal-fired power or that the companies subsidize production of other forms of cleaner energy. The EPA’s rules had a clear purpose to make solar and wind power a more prominent part of national power production.
West Virginia argued that the EPA’s rules exceeded the statutory authority the agency had under the Clean Air Act. The state was following up on arguments the Trump Administration made when it suspended these rules in 2019. The essence of the argument is that rule changes these momentous could only be made in a law passed by Congress, as opposed to being contained in rules made by unelected federal agency staffers.
The Court Concluded the EPA Exceeded its Authority Under the Major Questions Doctrine
The Supreme Court considered whether the EPA’s rules were permitted by the statutory authority it was granted by Section 111(d). Ultimately, a six-judge majority concluded they were not. The Court reviewed Section 111 within the context of the EPA’s overall authority and found it was an ancillary statute meant to fill gaps not addressed by the EPA’s other authority. Specifically, the emissions by these coal-fired power plants were addressed by other authorities, so using the very broad authority conferred by Section 111 was unnecessary.
The linchpin of the Court’s decision was the “major questions” doctrine. There is a body of case law that has considered whether agencies have attempted to assert power beyond what Congress could have intended when they are asserting a highly consequential power. Here, the Supreme Court concluded the EPA was trying to take a “long-extant” part of a statute and use it to initiate a “transformative expansion in [its] regulatory authority.”
In “major questions” cases, the Court requires that Congress be the one to make these changes to the law, rather than an agency greatly expanding the law through regulation. The Court explained that it was highly unlikely that Congress would have given the EPA this breadth of discretion to fundamentally change an entire sector of the American economy. The Court concluded that Congress had considered and rejected similar changes, even after learning of the dangers of greenhouse gasses.
West Virginia vs. EPA Is About Far More than Climate Change
In setting aside the EPA’s regulations, the Court did not express an opinion about the merits of the EPA’s rules. It could be that Congress makes a decision that would impose the same caps and requirements. The main holding was that it needs to be Congress that does this as opposed to the EPA.
While West Virginia vs. EPA was touted in the media as a case about climate change, its real impact extends far beyond environmental issues. At its core, the case was about the government’s ability to regulate in general. Agencies issue and enforce rules based on laws and the authority given to them by Congress. The Court explicitly disclaimed that it was taking any stance on climate change. The real issue is what can be done by executive agencies and what must be done by Congress.
It must not go unstated that West Virginia vs. EPA is the most consequential Supreme Court decision in administrative law since Chevron vs. National Resources Defense Council. While Chevron expanded the federal government’s deference toward an agency that interprets a statute and takes action based on that interpretation, West Virginia vs. EPA held that some issues should be the subject of laws as opposed to a regulation based on laws. As much as “Chevron deference” served to expand the administrative state, West Virginia vs. EPA could remove many of the foundational underpinnings for it.
The question is where this leaves the ability of executive branch agencies to regulate going forward. West Virginia vs. EPA involved a transformative approach that sought to change an entire sector. Arguably, the EPA’s rules were one of the more ambitious programs done under executive rulemaking. However, it would be logical to expect that some would use the opening provided in West Virginia vs. EPA to challenge further government rules that may be less far-reaching than the ones proposed by the EPA. The key will be how the Court defines “major questions” in future cases that are sure to come before it.