Supreme Court’s handling of visa case may be harbinger for EPA rule

Source: By Jeremy P. Jacobs, E&E reporter • Posted: Monday, July 28, 2014

A Supreme Court ruling last month on a complicated immigration visa law may figure prominently in the first legal challenges to U.S. EPA’s greenhouse gas standards for power plants.

The immigration case, Scialabba v. Cuellar de Osorio, hinged on language determining whether the children of immigrants seeking visas retain their spots assigned to them in the painfully long bureaucratic queue after they “age out” by turning 21.

One clause appears to grant that benefit to all children of applicants, while the next clause seems to significantly restrict it. The conflicting language, Justice Elena Kagan wrote in her plurality opinion, “is through and through perplexing.”

Supreme Court watchers say the situation presented in the case — an administrative agency interpreting seemingly unresolvable statutory text — is similar to the section of the Clean Air Act under which U.S. EPA has proposed its greenhouse gas standards for existing power plants.

And the case also underscores an ongoing debate on the high court on how much deference it owes regulatory agencies in interpreting laws — something that’s been pivotal for EPA. In several recent cases, conservative justices have hinted at scaling back 1984’s landmark Chevron v. Natural Resources Defense Council, which established that courts must defer to an agency’s reading of an ambiguous law as long as it is reasonable.

“This is the continuing battle on the Supreme Court between those who believe in Chevron deference and those who believe Chevron deference has gone too far,” said Thomas Lorenzen, a former Justice Department attorney now at Dorsey & Whitney. “You’ve got [Chief Justice John] Roberts and [Justices Antonin] Scalia — and presumably [Samuel] Alito and [Clarence] Thomas — who would say this has gone too far — Chevron should be limited.”

Technically, there are two versions of the Clean Air Act’s Section 111(d), which EPA used to propose the greenhouse gas standards. Both were enacted into law because of a legislative glitch. The Senate version grants EPA the authority to regulate any pollutant not already covered by Section 112.

But the House version bars EPA from using Section 111(d) to regulate sources already covered by Section 112, even for a different pollutant. That scuttles EPA’s greenhouse gas proposal right out of the gate because power plants are already covered by other Section 112 regulations.

Attorneys say states, utilities and other industry groups are sure to argue that EPA therefore lacks authority to issue the greenhouse gas rules in the first place when they challenge the regulations after they are finalized next year.

“This will be the first challenge out of the box,” said Kate Konschnik, the director of the Environmental Policy Initiative at Harvard Law School, who has written extensively on the issue.

That’s where Scialabba comes in. The Board of Immigration Appeals took the more restrictive view of which aged-out beneficiaries qualify to keep their spot in line for a visa, a process that can take decades.

Kagan turned to Chevron to rule in favor of the agency.

“This is the kind of case Chevron was built for,” Kagan wrote. “Whatever Congress might have meant … it failed to speak clearly. Confronted with a self-contradictory, ambiguous provision in a complex statutory scheme, the Board chose a textually reasonable construction consonant with its view of the purposes and policies underlying immigration law.”

Kagan was joined by Justices Ruth Bader Ginsburg and Anthony Kennedy, the court’s usual swing vote.

Roberts agreed with the agency’s interpretation, but he disagreed with Kagan’s use of Chevron in a concurring opinion that could pose problems for EPA’s greenhouse gas rules.

Roberts, joined by the conservative Scalia, said Kagan is “wrong” to apply Chevron. That precedent, he wrote, should not be used to resolve conflicting statutory language.

The chief justice said deference is warranted only for ambiguity because in those instances Congress is intentionally leaving it up to the agency to determine the most logical way forward.

It doesn’t apply to drafting mistakes, he went on.

“Direct conflict is not ambiguity, and the resolution of such a conflict is not statutory construction but legislative choice,” Roberts wrote. “Chevron is not license for an agency to repair a statute that does not make sense.”

Do the competing House and Senate versions of Section 111(d) constitute “direct conflict”? Amanda Leiter, an environmental law professor at American University, noted that despite Roberts’ dissent, the Scialabba decision and Kagan’s Chevron-based rationale still bolster EPA’s case.

Moreover, Kennedy’s joining with Kagan is important because it seems to indicate that there are still five justices — Kennedy plus the court’s four liberals — who believe in broad agency deference.

“It helps EPA,” she said.

And EPA could point to other recent Supreme Court rulings. Last term, for example, the court largely deferred to the agency’s interpretation of the Clean Air Act’s “good neighbor” provision for pollution drifting across state lines.

Still, Roberts’ Chevron argument, which Alito also agreed with, could nevertheless pose trouble for EPA, Lorenzen said.

If one or more of the conservative judges on the U.S. Court of Appeals for the District of Columbia Circuit is assigned to the three-judge panel that will eventually hear challenges to the greenhouse gas standards, he or she could point to Roberts’ dissent when considering the differing 111(d) language.

“The question is might a judge on the D.C. Circuit see it as an invitation to apply a narrow view of Chevrondeference,” Lorenzen said. He pointed to Judges Brett Kavanaugh and Janice Rogers Brown — two leading conservatives — as candidates who might be amenable to that line of thinking.

Still, others questioned whether a court would be willing to throw out regulations the size and complexity of the greenhouse gas standards over what appears to be a legislative mistake.

Roger Martella, a former EPA general counsel now practicing at Sidley Austin LLP, said it would be a “heavy lift” for a court to do so. And there is other language from the court, including some in the court’s ruling last term trimming an EPA air permitting program for greenhouse gases, that challengers can highlight to make their arguments against the regulations.

Dan Farber, an environmental law professor at the University of California, Berkeley, said an argument seeking to undermine the regulations because of the two versions of Section 111(d) has a “gotcha quality” that he expects will fail.

“Recent cases,” he said, “show that the court is willing to abandon that kind of formalism when it leads to outcomes that don’t seem sensible in terms of congressional purpose.”

Who’ll be on the bench?

EPA should be wary of Roberts’ argument, though, if for no other reason than the makeup of the court could significantly change by the time it could hear a challenge to the greenhouse gas standards.

Judging by how long it took litigation on EPA’s first round of greenhouse gas rules to reach the high court, the new rules aren’t likely to get there until 2019 at the earliest.

By that time, Justice Stephen Breyer, Kennedy, Scalia and Ginsburg would all be in their early to mid-80s.

And Roberts, one of the court’s younger members, is among those most concerned about the reach of Chevron.

He took issue with the scope of the precedent in 2013’s City of Arlington v. Federal Communications Commission. The case dealt with whether the FCC had lawfully established it had jurisdiction to regulate how long local authorities have to process cellphone tower applications.

Scalia, in the 6-3 majority opinion, deferred to FCC’s interpretation.

But Roberts — joined by Alito and, notably, Kennedy — disagreed. He contended that courts should reserve the right to review whether an agency has properly asserted regulatory authority that is not expressly given to it by a law.

“An agency cannot exercise interpretive authority until it has it,” Roberts wrote. “The question whether an agency enjoys that authority must be decided by a court, without deference to the agency.”

He went on to lay out an apparently critical view of the significant sway regulatory agencies exert over economic, social and political activities.

“The collection of agencies housed outside the traditional executive departments,” Roberts wrote, “is routinely described as the ‘headless fourth branch of government,’ reflecting not only the scope of their authority but their practical independence” (Greenwire, May 23).

Scalia also seemed to hint that he would object to granting Chevron deference to EPA’s proposed power plant rules in his opinion last term that trimmed an EPA greenhouse gas permitting program.

“When an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy’ we typically greet its announcement with a measure of skepticism,” he wrote, quoting the court’s 2000 ruling in Food and Drug Administration v. Brown and Williamson Tobacco Corp.(Greenwire, June 23).

‘Expansive and expensive’

Scalia’s citing of Brown and Williamson has also caught the attention of court watchers, and some say it could be particularly troublesome for EPA’s greenhouse gas proposal.

Brown and Williamson was a challenge brought by the tobacco industry to the FDA’s decision to regulate cigarettes and other tobacco products for the first time under the Food, Drug and Cosmetic Act.

To do so, FDA characterized nicotine as a “drug” under the law and said cigarettes were devices to deliver it.

The tobacco companies challenged the regulations, claiming that Congress, which had passed other tobacco-related bills, never intended the law to apply to something like cigarettes. Nicotine, they said, did not fit into the broader context of the statute.

In a 5-4 decision, the Supreme Court agreed, striking down the regulations.

Utilities and other industry groups cited Brown and Williamson this year in attempting to undermine EPA’s first greenhouse gas regulations, saying the Clean Air Act similarly wasn’t meant to cover the gases and that EPA was reaching too far to bring them under the scope of the law.

And, indeed, Scalia cited the case both above and as a justification for striking down EPA’s tailoring rule, which rewrote tonnage thresholds in the Clean Air Act that qualify a source for permitting requirements.

But that’s not the only recent instance where conservatives have turned to Brown and Williamson.

“The Brown and Williamson case seems to be experiencing something of a renaissance at the Supreme Court,” said Justin Pidot, a former Department of Justice environmental attorney who is now a professor at the University of Denver Sturm College of Law.

Pidot searched all recent Supreme Court opinions and found that although no one seemed to be citing the case five years ago, it has seen a significant uptick in the last two years.

A focus on the ruling could be “really problematic” for EPA’s 111(d) proposal, Pidot said, noting Scalia’s citing of it in last term’s greenhouse gas case.

Brown and Williamson “creates some infrastructure that the court could use to interfere with the EPA’s 111(d) rule,” Pidot said. “It lines up well with Scalia’s new interest in expansive and expensive interpretations of authority.”