Symposium: A climate triptych — the latest installment of greenhouse gas litigation

The following contribution to our greenhouse gas symposium comes from Jonathan Massey, a partner at Massey & Gail; he represented amici supporting the petitioners in American Electric Power in the Supreme Court and an amicus supporting private challengers to the EPA’s rule in the D.C. Circuit in the Utility Air Regulatory Group set of cases.

On February 24, the Court will hear argument in the greenhouse gas cases, presenting the question whether the EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases (GHGs).

The Court’s latest installment of GHG litigation follows two previous blockbuster decisions. In 2007, the Court held in Massachusetts v. EPA that a group of states had legal standing to challenge the EPA’s denial of a petition for rulemaking to regulate GHGs from motor vehicles under the Clean Air Act and further that the broad definition of “air pollutant” in the Clean Air Act covered GHGs (or at least that the definition did so for purposes of the motor vehicle provisions at issue in that case).

Four years later, in American Electric Power Co. v. Connecticut (AEP), the Court reaffirmed the primacy of the statutory scheme for GHG regulation.  The Court held that the Clean Air Act’s regulatory framework for statutory sources of air pollution displaced “public nuisance” claims asserted under federal common law by eight states, New York City, and three land trusts. The plaintiffs had sought to sue electric power companies that owned and operated fossil-fuel-fired power plants in twenty states, demanding abatement of the defendants’ ongoing contributions to the “public nuisance” of global warming. The plaintiffs went so far as to request injunctive relief capping the defendants’ carbon dioxide emissions at judicially determined “reasonable” levels, based on a court’s weighing of the potential risks of climate change against the socioeconomic utility of the defendants’ conduct.  The Court refused to permit such claims to proceed, declining in effect to create a “climate exception” to the otherwise very limited doctrine of federal common law.

Massachusetts and AEP asked how the issue of global climate change affects Article III standing requirements, federal common law, and the political question doctrine, among other questions.  The latest installment of the GHG litigation saga involves a more focused but no less important issue: how the prospect of global climate change will affect principles of statutory interpretation.  The ten party briefs and twenty-two amici briefs ensure that the Court will hear every conceivable viewpoint regarding that question.

In particular, the current cases ask the Court to consider the statutory implications of the EPA’s finding that carbon dioxide is a pollutant.  Although the challengers to the EPA’s rule sought to present a wide range of questions to the Court, ultimately the Justices granted only one: “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”  Thus, the government takes the position that many questions the challengers might have wanted to raise, such as the propriety of the EPA’s regulation of motor-vehicle emissions of greenhouse gases, are not before the Court.

Still, the implication of the EPA’s decision for regulation of GHGs under stationary source programs is a critical question and one that raises profound issues of statutory interpretation. According to the EPA, the Court’s holding in Massachusetts compelled the agency to regulate GHGs under permit programs applicable to stationery sources (such as electric power plants), even though the effect of such a move would be to extend the permit programs to tens of thousands or even millions of small sources that Congress, in enacting the Clean Air Act in 1977, had deliberately intended not to regulate.  The reason is that Congress adopted certain threshold level of emissions in the statute that were simply never designed with carbon dioxide and other GHGs in mind.

In adopting its rule, the EPA acknowledged that regulating carbon dioxide emissions under the stationary-source permitting programs would subject “an extraordinarily large number of sources” to the Clean Air Act for the first time.  In fact, the agency estimated that the application of one of the stationary source permitting requirements to GHGs would result in “more than 81,000 . . . [permits] each year, an increase of almost 300-fold.”  In the EPA’s words, application of another such requirement “would result in a program unrecognizable to the Congress that enacted” the program, because it would expand the number of permits from the current 14,700 sources to some 6.1 million.

The EPA explained that “Congress, focused as it was [in 1977] on sources of conventional pollutants and not global warming pollutants, expected that the [emissions] applicability thresholds would limit [the permitting requirements] to larger sources.”  The expansion of the permitting program, EPA concluded, would, “as a practical matter, vitiate much of the purpose of” the statutory language limiting the stationary source program to large industrial sources.  Because carbon dioxide is typically released by stationary sources in amounts that are far greater (by orders of magnitude) than other pollutants, the EPA’s rule will have the effect of making many hospitals, schools, apartment buildings, shopping malls, and other buildings “stationary sources” regulated under the Clean Air Act.  EPA stated that “[t]hese results are not consistent with [the permitting programs] and are inconsistent with – and, indeed, undermine – congressional purposes.”

As a matter of statutory interpretation, the EPA saw no way around this result.  It declined to interpret the term “air pollutant” as used in the stationary-source permitting program to exclude GHGs or to mean anything different from the way the term was used in the mobile-source (motor vehicle) provisions at issue in Massachusetts.  For example, the EPA refused to draw a distinction between carbon dioxide (even though it is exhaled as part of part of respiration, used by plants in photosynthesis, and is necessary to life) and other substances like sulfur dioxide, nitrogen oxides, or particulate matter.

However, the EPA sought to overcome the practical problems of its approach by adopting Timing and Tailoring Rules to phase in the expansion of the stationary-source permitting program.  It designed the Tailoring Rule to exclude (initially) very small sources of GHG emissions, but then gradually to expand GHG regulation “one step at a time” until all of the additional sources (that Congress had never intended to cover) were in the program.  The Timing and Tailoring Rules, however, were subject to their own limitations.  For example, despite its awareness and recognition that the expansion of the permitting program will place disproportionate burdens on low-income populations, the EPA made no analysis in the Tailoring Rule of impacts on energy consumers. Similarly, in the Timing Rule the EPA did not consider impacts on low-income populations.

The Supreme Court will have to consider whether the EPA’s approach is faithful to the statutory framework enacted by Congress – whether and how the stationary-source permitting programs of the Clean Air Act should be applied to GHG emissions that were never foreseen by the Congress that enacted the statute.  It seems a bit wooden for the agency to insist that Massachusetts compels the conclusion that an “air pollutant” under the mobile-source provisions at issue in that case is necessarily an “air pollutant” for purposes of all programs under the Clean Air Act.  After all, as the Court observed in AEP, “[o]f necessity, Congress selects different regulatory regimes to address different problems.”

It is perhaps telling that the Solicitor General’s brief in the Supreme Court leads with a compromise approach and does not defend the full scope of EPA’s rule until it reaches page 39 – nearly seventy percent of the way through the brief.  The Solicitor General’s proposed compromise is to hold that, when a proposed facility is subject to the stationary source program by reason of its non-GHG emissions, then the programs requirements should apply to the sources’ GHG emissions as well.   Such an intermediate position may well have more appeal in the Court than the EPA’s full-blown rule.

In a world where the administration seeks increasingly to rely on executive orders and agency action to avoid a political stalemate in Congress, the question whether there is enough play in the joints in the Clean Air Act to accommodate the EPA’s strategy in the latest greenhouse gas cases will be an important one not only for climate change but for a wide range of policies the White House seeks to pursue.