The Supreme Court concluded its momentous term last week, saving the long-anticipated West Virginia v. EPA ruling for the last day of announced opinions. The Court's decision limiting the scope of EPA's authority to regulate power plant greenhouse gas (GHG) emissions under the Clean Air Act will have long-lasting impacts. The precise contours of those impacts, however, remain to be seen.
In short, Chief Justice John Roberts explained that EPA's proposed Clean Power Plan regulations were so broad and so significant that the agency's efforts to encourage the conversion from coal to cleaner sources of power could only be triggered by an express authorization by Congress. The Court's 6-3 ruling relied on the "major questions" doctrine, which, depending on what version of recent jurisprudence history you read, is either a newly devised strategy to limit the power of the administrative state, or a fairly standard concept growing out of traditional separation of powers case law. Either way, the Court's decision was clear – the potential effects of the proposed regulation were so substantial that EPA could not read into the plain language of Section 111(d) of the Clear Air Act authority to take such a big step.
(We will leave for a moment the case's peculiar procedural posture, whereby the Court took up this case even before the Biden administration could finalize a revised Clean Power Plan regulation. The Court found that West Virginia and other states had standing to bring the challenge even before the regulation was written, following the rule's back-and-forth procedural history from 2015. Article III standing litigation apparently never goes out of style but will be a topic for another day and another client alert.)
Writing for the dissent, Justice Kagan dived head-long into the intricacies of the Clean Air Act and described how, in her view, the plain language and structure of Section 111(d) did give EPA all the authority it needed to promulgate the regulation. As anyone who has ever had the pleasure of spending time with the Clear Air Act can testify, it is a lengthy and complex piece of legislation, with a remarkable amount of detail at every turn. The dissent relied on Congress's handiwork to conclude that the Act did, in fact, envision EPA's broad mission to address air pollution in all its forms, including GHGs.
The majority directly acknowledged the societal challenges presented by climate change and the importance of addressing GHG emissions. Tellingly, Justice Roberts admitted that waiting for Congress to act, and to be completely clear about what it wants when it gets around to acting, can be frustrating. But that's how the separation between the legislative and executive branches cookie crumbles, even if the country is faced with an extremely worrisome and urgent policy challenge.
As for what's next, the EPA has already announced it will continue working on a revised Clean Power Plan regulation and will do so within the confines of the West Virginia v. EPA decision. Meanwhile, the transition to cleaner sources of power within the utility industry continues at a fairly steady and impressive pace, regulation or no regulation. And, given the complexities of the Clean Air Act, the implication of the decision on its face may not be as consequential as feared in the context of climate policy and regulation per se.
On the other hand, the ruling's potential implications for all forms of executive branch regulation could be monumental. The Court expressly recognized the major questions doctrine and, without having to touch the Chevron deference legal question, has invited litigation from all sources on whether an agency has the authority to act based on existing legislative provisions. Therefore, whether the issue is financial markets (e.g., the SEC's controversial GHG Reporting and Disclosure rule), public health (e.g., OSHA's masking rules), energy efficiency (e.g., Department of Energy's lightbulb rules), businesses in all sectors of the economy can anticipate litigation relying on the major questions doctrine being brought in federal courts all across the country. We foresee literally dozens of cases being filed that will test the limits of exactly how clear Congress must be on a particular topic before an executive agency gets to regulate virtually anything of public importance.
We will continue to follow closely the fallout from this impactful decision and will coordinate with colleagues in all of Venable's regulatory practice groups to track how the major questions doctrine will effect your interests, now and in the long term.