EPA wins big as Supreme Court upholds cross-state rule

Source: Jeremy P. Jacobs, E&E reporter • Posted: Wednesday, April 30, 2014

In a landmark win for the Obama administration and public health advocates, the Supreme Court today resurrected U.S. EPA’s program for air pollution that drifts across state lines after a lower court had thrown it out.

The 6-2 decision upholds EPA’s Cross-State Air Pollution Rule, or CSAPR, a regulatory regime for 28 Eastern states that requires upwind states to cut emissions that cause downwind states to exceed the agency’s air standards.A federal appellate court invalidated the program in August 2012 after it was challenged by utilities and several states, holding that EPA had improperly relied on a cost analysis in determining how much states must cut emissions and superseded state authority by implementing federal plans before states were allowed to draft their own.

Justice Ruth Bader Ginsburg rebuffed both of those findings today.

In a 32-page opinion, Ginsburg wrote that the court is largely bound by its precedent in 1984’s Chevron v. Natural Resources Defense Council, which held that if a statute’s language is ambiguous, courts must defer to an agency’s interpretation.

The Clean Air Act, and specifically the good neighbor provision at issue, does not tell EPA what factors to consider.

“Under Chevron, we read Congress’ silence as a delegation of authority to EPA to select from among reasonable options,” Ginsburg wrote.

At times quoting from Scripture, Ginsburg noted that interstate air pollution is a complicated problem, since multiple upwind states may contribute to a downwind state exceeding EPA’s National Ambient Air Quality Standards for pollutants like ozone, nitrogen oxides (NOx) and sulfur dioxide (SO2).

EPA, therefore, had to grapple with the “thorny causation problem” of air pollution in Midwestern states plaguing Eastern states, Ginsburg wrote, so using a cost-benefit analysis to determine how to most efficiently make reductions is logical.

“Using costs in the Transport Rule calculus, we agree with EPA, also makes good sense,” Ginsburg wrote. “Eliminating those amounts that can cost-effectively be reduced is an efficient and equitable solution to the allocation problem the Good Neighbor Provision requires the Agency to address.”

The ruling comes after a string of losses for EPA’s cross-state programs. The agency has been trying to implement the good neighbor provision since 1998. In 2005, EPA issued its Clean Air Interstate Rule, or CAIR, but it was thrown out by federal judges in 2008 for not doing enough to protect public health.

CAIR was left in place while EPA tried again. In August 2011, it finalized CSAPR, which curtailed NOx and SO2 emissions to address ozone, particulate matter and other pollution problems in downwind states. CSAPR outlined a two-step process. First, EPA screened states to make sure they contributed more than 1 percent to a downwind state exceeding EPA air standards. If a state satisfied that requirement, EPA used cost allocation to determine how much that upwind state could reduce its emissions using complex modeling.

The agency then imposed those “budgets” on states through a federal implementation plan, or FIP.

In addition to the cost analysis, states also challenged EPA’s going forward with a FIP before a state could issue its own implementation plan, or SIP. The D.C. Circuit agreed with that argument in tossing out the rule (Greenwire, Aug. 21, 2012).

But Ginsburg, joined by the liberal wing of the court and Chief Justice John Roberts and Justice Anthony Kennedy, held that the Clean Air Act does not require EPA to give states another crack at a SIP after the agency found the state’s good neighbor plans inadequate.

“In short, nothing in the statute places EPA under an obligation to provide specific metrics to States before they undertake to fulfill their good neighbor obligations,” Ginsburg wrote. “By altering the schedule Congress provided for SIPs and FIPs, the D.C. Circuit stretched out the process. It allowed a delay Congress did not order and placed an information submission obligation on EPA Congress did not impose.”

Two conservative justices, Antonin Scalia and Clarence Thomas, dissented from the opinion. A third, Justice Samuel Alito, recused himself from the case.

Scalia said the majority went too far in deferring to EPA’s judgment, casting the case as an instance where “unelected agency officials” are exercising “broad lawmaking authority.”

Backing the reasoning of the D.C. Circuit opinion, Scalia said the Clean Air Act requires upwind states to only cut the proportional amount that they contribute to downwind states. EPA cannot, Scalia wrote, require states to reduce emissions by more than they are responsible for a downwind state exceeding a NAAQS.

“Today, the majority approves that undemocratic revision of the Clean Air Act,” Scalia wrote.

Notably, Ginsburg indicated agreement on this point but said the hypothetical situation isn’t a reason to invalidate the entire rule. If a state does end up having to reduce emissions by more than its share of a neighboring state’s pollution, that state could bring a “particularized, as applied challenge” to EPA’s program, she wrote.


EPA and environmental and public health groups applauded the ruling, while industry representatives lamented it.

“Today’s Supreme Court decision is a resounding victory for public health and a key component of EPA’s efforts to make sure all Americans have clean air to breathe,” EPA Administrator Gina McCarthy said in a statement. “The Court’s finding also underscores the importance of basing the agency’s efforts on strong legal foundations and sound science. This is a big win for the nation’s public health and a proud day for the agency.”

The American Lung Association, which asked the court to review the D.C. Circuit ruling, said “millions of Americans will breathe easier” because of the high court’s decision.

The association noted that when EPA adopted the rule in 2011, it estimated that once CSAPR was fully implemented, it would prevent up to 34,000 premature deaths and 400,000 cases of aggravated asthma.

“People who live downwind of these major polluters need this decision, because the ozone and particle pollution in their communities threatens their lives,” the association said.

Lawyers who represent industry groups, on the other hand, said the ruling unfairly disregarded arguments from states that EPA’s actions threatened the “cooperative federalism” on which the Clean Air Act is based.

Attorney Scott Segal, who represents the utility industry at Bracewell & Giuliani and directs the Electric Reliability Coordinating Council, said the ruling could portend federal overreach when the government proposes closely watched greenhouse gas standards for existing power plants later this summer.

“As we stand at the precipice of new carbon regulations, we are concerned that EPA may be emboldened to take actions that undermine cooperation with the states,” Segal said. “If they so do, there could be severe consequences for electric reliability and affordability. Let’s hope that EPA pays more attention to the better angels of its nature and allows for states to truly formulate implementation plans with flexibility.”

Click here for the opinion.