Argument preview: Curbing greenhouse gases

At 10 a.m. next Monday, the Supreme Court will hold ninety minutes of oral argument on six consolidated challenges to the government’s authority to regulate the emission of greenhouse gases from industrial facilities.  Arguing first, for private industry challengers, will be Peter D. Keisler of the Washington, D.C., office of Sidley Austin, with thirty minutes of time.  Next, representing state governments, will be the solicitor general of Texas, Jonathan F. Mitchell, with fifteen minutes of time.  The Environmental Protection Agency will be represented by U.S. Solicitor General Donald B. Verrilli, Jr., with forty-five minutes of time.  The lead case is Utility Air Regulatory Group v. Environmental Protection Agency.

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Background

In some sectors of American politics and the academy, the debate rages on over whether climate change due to global warming is real, and, if it is, whether “greenhouse gases” rising from ground sources add to it or even make it worse.  That, however, is not a debate in which the Supreme Court is likely to engage when it takes up the latest climate change case next week.

In short, the Court has not assigned itself the task of reexamining whether greenhouse gases are a form of air pollution, whether they are dangerous to health and safety, or whether the government can regulate them under the Clean Air Act, although some challengers of the Environmental Protection Agency had asked the Justices to reach those issues.

A majority of the Court had made clear, seven years ago in Massachusetts v. EPA, that it saw global warming as a significant environmental problem, and it said it accepted the scientific view that the heating up of the atmosphere was due, in part, to greenhouse gas emissions acting as a canopy trapping heat over the globe.

The Court ruled that the EPA, which had pondered the issue but had chosen not to act on it, needed to decide whether there was environmental danger from greenhouse gas emissions rising from the tailpipes of cars and trucks — the only source then at issue before the Court.  The EPA then found such danger in a ruling in December 2009, and moved on to regulate those emissions, and that set it off on the journey that now has made its way back to the Court.

At the heart of the Court’s 2007 decision, and at the core of the EPA’s expanding regulatory regime ever since then, is the fact that Congress spoke very broadly in the Clean Air Act, saying that it applied to “any air pollution agent.”  The EPA has, in turn, interpreted that to mean any pollutant that it undertakes to regulate.  The issue for the Court now is a part of the larger question of which sources of greenhouse gases can be regulated by the EPA.

The EPA’s first move to include greenhouse gases within the Act’s sweeping definition was its endangerment ruling in late 2009, followed in May 2010 by its adoption of the so-called “tailpipe rule,” which set standards for greenhouse gas emissions from light-duty vehicles, including new rules for car and truck fuel efficiency.  That rule is not directly under review by the Court, although there were challengers who asked for that specifically.  Neither is the agency’s core finding that greenhouse gases from tailpipes endanger the environment, although that, too, has been vigorously challenged.

One thing that has become increasingly clear in the four months since the Court granted review of the new group of cases is that this is not likely to result in a decision nearly as big as industry groups and other challengers had hoped when they filed nine wide-ranging petitions for review, the latest in a continuing series of protests claiming that the EPA is operating as a rogue agency.

Some legal observers have suggested that the Court might actually reach out to decide challenges to the EPA’s basic policy choices on the “tailpipe rule” and its endangerment finding, even though the Court had denied challengers’ requests for review.  After all, the four dissenters in the 2007 decision that launched the EPA into the greenhouse gas regime are still on the Court.  Whether they might get a fifth vote to expand the review, though, is problematic, given that the Court seems to have spent some effort in deciding what to take on this time, and it chose to compose on its own the precisely drawn question it was willing to decide.

Here is that question: “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.”  (“Stationary sources” are commonly thought of as electricity-generating utility plants and major factories such as steel mills –fixed, not mobile, sources.)

The “permitting requirements” to which the Court was pointing involve the EPA’s authority under the Act’s Title I to issue permits for new or modified construction of “stationary sources” and its authority under Title V to issue operating permits for such fixed sources.

The EPA for years has held the view that, once it imposed regulations on one form of pollutant under its Clean Air Act authority, that would trigger enforcing limits on other sources’ emission of that pollutant. The Court, by phrasing the question now before it in the way that it has, apparently will be deciding whether the EPA had no choice but to do so, or, if it had a choice, whether it picked the right option under the Act.

It is important to note at this point, though, that even if the Court were to rule that the EPA had no authority to follow its triggering approach, that would not mean the agency was out of options to regulate greenhouse gases emitted from major fixed sources.  There is another part of the Clean Air Act that gives it discretion to move against those sources, which it has started to do relying in part on its earlier finding of environmental danger from those gases, and that alternative is not at issue in the specific dispute now under review.

It would be a mistake, though, to suppose that nothing is at stake now for the EPA and for greenhouse gas regulation.  At the center of the Court’s review will be how the interacting parts of the EPA’s role under the Clean Air Act work together in a way that, almost inevitably, expands the agency’s reach to newly recognized and regulated pollutants, such as greenhouse gases.

To more fully appreciate what is on the line for the agency, it is necessary to go back in time, even before official Washington was paying close attention to global warming and the possible role in that condition of greenhouse gases.

The roots can be found in the late 1970s, soon after Congress had amended the Clean Air Act to impose the permitting requirements for polluting power plants and other fixed sources.  Congress had given the EPA the authority to set air quality standards to be enforced against major sources of pollution, if they emitted specific pollutants considered to be a danger to public health and safety.  The six pollutants specifically named in the Act were ozone, sulfur dioxide, particulate matter (“soot”), nitrogen oxide, carbon monoxide, and lead.

If an area of the country already meets the EPA’s air quality standard, an industry located there that emits at least 100 tons and up to 250 tons of pollutant in a year must get a permit for new or modified construction, requiring it to adopt the best available control technology for any pollutant, not just the six named.  The aim is to assure that the plant’s operation does not cause deterioration of the air quality below the standard.  That Title I program is known technically as *Prevention of Significant Deterioration” (shortened to PSD).

But if an area is not within the EPA’s standard, new construction is barred unless the industry can show that it will not emit more than the lowest achievable rate for any pollutant for which it is out of compliance.  That duty exists until the area achieves the quality standard.

The separate Title V permitting program is also directed at stationary sources.  This provision requires a permit even to operate a facility if its emissions exceed a specific threshold — 100 tons a year — of any air pollutant.

The EPA, initially, thought it would enforce those two permitting programs only for the six named pollutants.  But, when it put out its final rule in 1980, it interpreted Congress’s mandate to be to regulate any facility emitting any pollutant at all, so long as that geographic area complied with at least one standard for one of the named pollutants.

At the time, the EPA was not contemplating including greenhouse gases among the added pollutants that would be covered by the permitting program.

After getting its marching orders from the Supreme Court in 2007, however, the EPA embarked on a series of rulemakings related to greenhouse gases — starting with light-duty vehicles, and taking one step at a time.  First, though, it had to find that greenhouse gases were an endangering pollutant, and it did so for emissions from new motor vehicles.

Next came the “tailpipe rule,” setting specific standards for emissions of greenhouse gases from light cars and trucks, including fuel efficiency standards for those vehicles.  And then the EPA turned to the policy issue that has led it back to the Supreme Court.

By having greenhouse gases treated as a regulated pollutant, the EPA’s triggering rule made that particular pollutant a part of the permitting programs under Title I and Title V for stationary sources.  But a complication immediately set in.

Under the law, the permitting regime for Title I emitting sources would apply to any facility that emitted at least 100 tons and up to 250 tons of pollution a year, depending upon the nature of its operations.  Under the Title V permitting regime, the threshold was emission of 100 tons a year.

If EPA followed those requirement to the letter, it found, it would have to spread out its permitting program to cover not just 15,000 facilities, but 6.1 million, costing it $22.5 billion for paperwork, plus billions in compliance costs for covered facilities.  Such a regulatory regime, it found, might even reach sources as small and localized as apartment projects, colleges, and hospitals.

Reaching that far, EPA decided, would be “absurd,” and definitely not what Congress had intended.  The EPA, of course, could not change the language of the Clean Air Act; that is Congress’s job.  So, claiming administrative necessity, the EPA in June 2010 came up with what is known as the “tailoring rule.”

It interpreted the threshold for applying the permitting regime to plants emitting more than 75,000 or 100,000 tons per year, with a promise to modify the threshold from time to time, as the need arose.  It said it was not abandoning the low thresholds Congress had specified, and might some day push the permitting regime down to those levels.

Before being haled into court, the EPA took one final action to carry out the assignment it had been given by the Supreme Court.  In April 2010, it set January 5, 2011, as the date when major stationary sources of greenhouse gas emissions would come under the permitting requirements.

More than seventy business groups, public policy advocacy organizations, and state governments challenged the greenhouse gas rules, taking on all four of the EPA’s initiatives in the U.S. Court of Appeals for the District of Columbia Circuit.

A three-judge court of appeals panel upheld the EPA’s conclusion that greenhouse gases were an endangering pollutant.  And, it concluded, once the EPA had applied that endangerment finding to motor vehicles, it had no choice under the law but to apply the triggering rule and reach stationary sources under the permitting programs.  Greenhouse gases were now a regulated air pollutant, so the EPA was obliged to act in its other areas of responsibility, the panel concluded.

The D.C. Circuit panel found that none of the challengers had a legal right to sue to challenge either the “triggering rule” — the EPA’s choice of new regulatory thresholds for the fixed sources regulation — or the “timing rule” — setting the effective date of coverage of stationary sources.  It ruled that no one would be harmed by either.

Over the dissents of two judges , the en banc D.C. Circuit denied review.

Petitions for Certiorari

Without much apparent coordination among the lawyers, nine separate petitions were filed at the Supreme Court last year, reaching the Court between March 20 and April 19.  In total, the petitions raised twenty-one questions, many overlapping, ranging from basic protests about the EPA’s endangerment finding to challenges to each of the subsequent regulatory decisions, to the issue of who had standing to be in court to contest the “tailoring rule” and the “timing rule”– and even whether the 2007 decision in Massachusetts v. EPA should be overruled.

Attorneys for the Justice Department and the EPA, although urging the Court to deny review of all of the petitions, sought to be helpful by boiling down to just four the questions that the government believed to be actually at issue.

One dealt with the endangerment rule, and its application to motor vehicles; one dealt with the “tailpipe rule” standards for motor vehicles, and one dealt with the standing issue on the permitting requirements.

The third on this government-composed list was stated this way: “Whether the EPA correctly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the CAA for stationary sources that emit greenhouse gases.”

On October 15, after the case filings had built up over the summer recess, the Court issued its grant order.  It selected six of the petitions for review, consolidated them, and denied three others outright.  It said it would limit its review to a question it rewrote.  Its question followed the version suggested in the government brief in opposition, but changed a single word.  Instead of promising review of whether the EPA’s interpretation of the triggering rule had been “correctly” determined, the Court substituted the word “permissibly.”

The EPA, of course, has long held the view that the interpretation it gave to the triggering rule for regulation of stationary sources was mandatory, and the Justice-EPA version of this question had suggested that the issue on that point was whether the EPA was “correct” about that.  But the Court seemed to be asking whether the EPA’s view was allowed by the Act, even if it was not mandatory.

It may be that the Court’s perception on this substitution — if it intended anything of substance — will only come out at the oral argument.  The Court does not reveal, up front, why it phrases questions as it does.

With so many entities involved in the six granted petitions, the Court imposed some controls on the length and number of merits briefs.  It agreed to expand the oral argument time from the usual one hour to ninety minutes.  The challengers will have half of that time, and the EPA half.

Briefs on the Merits

The Court’s limitation of what it intends to review has put significant discipline into the merits briefing stage, although the Justices still must work through seven merits briefs from the challengers, and three from the defenders of the EPA, including the agency itself, along with four reply briefs and eighteen amici briefs.

The division of arguments among the five challenging briefs from industries and their organizations and the brief from six objecting states is fairly clear: five generally argue that Congress simply has not given the EPA the authority to regulate greenhouse gases from fixed sources under the two permitting programs at issue in the case, on the theory that the phrase “any air pollutant” does not include those gases, while the sixth focuses on the meaning of the “triggering” phenomenon, arguing that it is limited to regulation only of pollutants for which the EPA has set an air quality standard and then only pollutants where an area is already satisfying the quality standard — an approach that, of course, would exclude greenhouse gases.

If the Court were to take either approach, then the EPA would be blocked from controls on greenhouse gases in the permitting programs under Title I and V.

There is, among those entities focusing on what pollutants Congress targeted, some full-throated protests about the EPA being out of control — such as the claim that opens the brief for groups and individuals led by the Southeastern Legal Foundation.  “This case,” it asserted, “involves perhaps the most audacious seizure of pure legislative power over domestic economic matters attempted by the Executive Branch” since President Harry Truman seized the nation’s steel mills during the Korean war (an act nullified by the Supreme Court in 1952).

The brief for twelve states, led by Texas, contended that the EPA’s recalibration of the threshold of regulation (the “tailoring rule”) “is one of the most brazen power grabs attempted by an administrative agency.”  If the law as written by Congress would produce absurd results, that filing suggested, the EPA should ask Congress to fix the law, rather than fashion its own, preferred version.  (This group of states’ merits briefs also renews their argument — which the Court did not agree to review — that if the Court’s 2007 decision supports EPA regulation of greenhouse gases, it should be reconsidered or overruled.)

The challengers also have made the most of the EPA’s concern that the thresholds set by Congress would lead to absurdities, cautioning the Court that actual adherence to those low levels for greenhouse gases would, for example, necessarily make the EPA the regulator of the carbon dioxide emissions even from a single school’s water heater.

Aside from the rhetoric, though, those briefs advanced explicit textual arguments on why they were persuaded that Congress did not intend to extend the EPA’s permitting regimes to greenhouse gas pollutants.

The one brief that steered away from the dispute over whether the Clean Air Act’s reference to “any air pollutant” actually meant all or only some pollutants was the brief for a group led by the American Chemistry Council.  It is the one, incidentally, prepared by — among others — Peter Keisler, the attorney who will actually be arguing for the industry on Monday.

This case, that brief asserted, will come down to what the Act meant in triggering EPA regulation of pollutants at a “major emitting facility” in an area that has satisfied a national air quality standard and thus does not want to slip back into non-attainment.  The EPA, the brief recalled, reads that language to mean that once an area satisfies any standard for any pollutant, the permitting program then applies to all pollutants.   But this brief advanced the counter-argument that the only proper way to read that language is that it triggers the permitting obligations “only when a facility emits major amounts of a pollutant in an area that is in attainment for that pollutant.”

The merits brief for the EPA, prepared by the Solicitor General and his staff and the EPA’s own lawyers, interpreted the question as fashioned by the Court to raise three specific issues within the broader framework of what was “permissible” under the Clean Air Act for stationary sources.

First, the brief said, is whether the EPA could “permissibly” conclude that, when a stationary source comes under the PSD permitting program (Title I) because it emits some other pollutant, that source has to adopt the best control technology available for its greenhouse gas emissions.

Second, it went on, is whether the EPA could “permissibly” conclude that if a specific source emits greenhouse gases, that is enough to make it subject to the PSG permitting regime.

Third, according to the brief, is whether the EPA could “permissibly” conclude that, solely because some source emits greenhouse gases, that is enough to make it subject to the Title V operating permit program.

The brief then proceeded to answer “yes” to each of those issues.

On the first point, the EPA’s brief argued that Congress intended to save the agency from making multiple findings of when a pollutant endangers health and safety, and it relied upon the policy positions upon which the EPA had relied since 1978 that made the triggering automatic to other pollutants because of the broad “any pollutant” language.  The challengers, it added, are largely relying upon arguments that had failed in the D.C. Circuit.

On the second point, the EPA’s merits filing again relied upon its longstanding policy positions, contending that the challengers were trying to “create the impression” that the agency had contrived a newfangled regulatory structure.”  It is far too late, the brief argued, for the Court to allow a relitigation of regulatory principles that have clearly survived long-ago challenges, and that survived in the Court itself in 2007.

On the third point, the EPA’s final brief makes only a limited argument, suggesting that its powers under Title V generally flow out of its authority under the PSG program in Title I, and do not require separate justification.

The agency’s brief does not take on directly the stronger rhetorical thrusts of some of the challengers to the recalibration of the regulatory thresholds for greenhouse gases.  On the merits of those recalculations, the EPA contended that it was confronted with conflicting commands from Congress, and reacted by deviating “no further than is needed to protect congressional intent.”  Moreover, it asserted, the alternative statutory interpretations that the challengers put forth, in order to avoid the “absurd results” of the low levels set by Congress, would subvert even more Congress’s preferences in using broad language in the Act to extend EPA authority to “any pollutant” and to “major emitting facilities” such as stationary sources.

Merits briefs strongly in support of the EPA were filed by fifteen states plus New York City (putting strong emphasis on the Act’s references to “any air pollutant”), and by environmental organizations (relying on that language and other sweeping wording in the Act).

Although the case has attracted wide interest, despite the developing sense that its potential is not as sweeping as perhaps once was thought likely, it has drawn comparatively little amici interest — due in part, perhaps, to how many interested entities are taking a direct role in the case as parties.

The challengers draw the most support numerically, from about a dozen amici, while the EPA attracts five such briefs.   The challengers’ supporters range from several states to Republican members of Congress, conservative advocacy groups, business organizations, and economists.  The EPA garnered the backing of liberal advocacy groups, a health organization, air quality advocacy groups, and government efficiency analysts.

Analysis

In a dispute of sometimes dizzying complexity, it nevertheless is quite easy to pick out each side’s points of greatest weakness in the greenhouse gases controversy, as it exists at this stage before the Court.

The challengers’ protest is hampered, perhaps to a significant degree, by the fact that the Supreme Court in Massachusetts v. EPA left the indelible impression that it expected the EPA to engage in at least some regulation of greenhouse gases, as a part of a solution to global warming.  Moreover, the effect of that 2007 decision was broadened when the Court, three years ago in American Electric Power Co. v. Connecticut, reinforced the primary role of the EPA in this endeavor, rejecting the use of nuisance lawsuits against power plants as a way to get at the problem.

The new members of the Court since 2007 — Justices Elena Kagan and Sonia Sotomayor — seem quite unlikely to give the impression that they would not have embraced that decision.  If that is the reality, then a majority would seem to be intact, at least not to revisit Massachusetts, but perhaps also not to question the pervasive role that EPA exercises toward greenhouse gases.

Without getting into extended scientific analysis, it would appear very unlikely that the Court will accept the idea that stationary sources emitting greenhouse gases are simply not a part of the problem of global warming.  The Court, of course, might not have to go that far to rule for the industry challengers, but it is not easy to conjure a majority that would be persuaded that the problem lies only with light-duty cars and trucks.

What, then, do the challengers really have going for them?  Even if one leaves aside the heated arguments about EPA knowing no bounds of administrative self-restraint, the challengers do have a very strong argument that EPA did put itself in Congress’s shoes and fashioned a version of stationary source regulation that was not what the Clean Air Act had legislated.

The EPA “tailoring rule,” boosting the threshold of regulation of fixed-source greenhouse gases to the 50,000-75,000 annual tonnage levels, was, if not breathtaking administrative creativity, a quite impressive leap in that direction.  The EPA may well be entitled to some sympathy over the mixed directions that it saw looming once it began to obey the Court’s mandate in Massachusetts v. EPA, but it might take more than sympathy to carry the EPA all the way to the threshold calculations it made, even if one accepts the reassurance that they are only “interim” steps along the way.

The EPA does mount a text-based argument for doing what it did, but that is at least debatable.  If the Court takes seriously the exaggerated rhetoric on the other side, it may go into the argument next Monday wondering whether, in fact, the EPA has actually lost its way, and needs to be brought back to a position of more modesty.

The statutory text arguments seem, on balance, not that decisive, one way or the other.  The Court may have to step back a bit and, on its own, assess what Congress was really driving at as long ago as 1977, when it set the EPA on the course that has led to this strenuously fought point in the climate change controversy.