‘Blockbuster’ Case Threatens EPA’s Climate Action, Rule Delays

The Supreme Court’s decision to consider limits on the scope of EPA’s climate authority could quell agency power to stem carbon emissions while climate policy remains stalled in Congress, observers say.

Some legal experts were skeptical that the justices would pick up the group of four petitions, but Friday’s decision to weigh in puts the hotly-contested question of Clean Air Act authority on power plant greenhouse gases once again on the highest bench.

“This is probably the biggest climate case on the Supreme Court’s docket in a decade,” McGuireWoods LLP partner Allison Wood told Bloomberg Law.

West Virginia, North Dakota, North American Coal Corp., and Westmoreland Mining Holdings LLC won their bid to have the high court revisit a lower court decision that scrapped the Trump administration’s Affordable Clean Energy Rule.

“Given the insurmountable costs of President Biden’s proposals, our team is eager to present West Virginia’s case as to why the Supreme Court should define the reach of EPA’s authority once and for all,” West Virginia Attorney General Patrick Morrisey said in a statement Friday evening hailing the decision.

The move took some court watchers by surprise, since there’s not even a Biden administration carbon proposal on the books yet to replace the less-stringent Trump standards.

Still, the justices handed down their decision just days before U.S. officials will show up in Glasgow for the COP26 summit, where countries will hash out agreements on pivotal climate policies.

The high court’s move “absolutely” will affect the bargaining power of the U.S. ahead of the talks, putting one more wrench into the climate strategies Biden is able to bring to the table, University of Maryland law professor Robert Percival said,.

This case “is clearly going to be the environmental blockbuster of the year,” he told Bloomberg Law. “And I think it’s going to show just how out of touch the court is with the realities of the climate crisis.”

Resolution or Concern?

The questions from the petitioners—and litigation over previous administration’s power plant carbon rules—centers around how far EPA’s scope stretches to establish carbon rules for existing power plants through Section 111(d) of the Clean Air Act.

“On a substantive basis, actually resolving this question would be great,” Schiff Hardin LLP partner Jane Montgomery said. A ruling could offer clarity on increasingly-complicated issues regarding how EPA can interpret the best system of emission reduction and performance standards, she said.

The decision to hear arguments signals that the justices are “very concerned about the limitations that EPA has under this provision,” Wood said. “And it shows that the cert petitions must have resonated that discussed the uncertainty to industry that has really resulted from years of not having this question resolved.”

Others are deeply concerned about the Supreme Court taking up these climate questions, especially when it’s dominated with conservative voices who have a skeptical eye towards agency authority.

“Which is really disturbing, given that right now the Biden administration is working on really having the administrative agencies do a heavy lift when it comes to climate, given that the infrastructure packages now like dwindling down to nothing,” Loyola University New Orleans law professor Karen Sokol said.

Future Rulemaking

Also at stake are long-awaited greenhouse gas rules from the Biden administration, which has insisted that the EPA has been hard at work reviewing options for new power plant carbon rules since the Affordable Clean Energy Rule was tossed earlier this year.

The Supreme Court’s announcement will mean definite delays for any potential rulemaking, Percival said.

“It will put everything on hold until the court acts,” he said. “So it guarantees at least a year’s delay in the EPA trying to come up with any regulatory scheme to reduce greenhouse gas emissions from power plants.”

The Office of Management and Budget has an existing Section 111(d) proposed rule for the oil and gas sector sitting on the books. But how Biden will proceed with that and future proposals is an open question because a Supreme Court decision could change how the provision is viewed, Wood said.

“It’s possible this could lead to a delay of that rule sitting at OMB and certainly probably other rules, there would be no point in putting out any other 111(d) rules at this time,” she said.

Looking ahead, the Supreme Court is ultimately weighing whether EPA can craft rules that limit greenhouse gases quickly on an ever-shortening climate timeline, Sokol said.

This could “hobble EPA authority to regulate power plants in a way that makes sense given where we are in climate policy right now, which is not back-end measures on the fenceline to clean up pollution, it is transitioning to clean sources,” she said.

The cases are: West Virginia v. EPA, U.S., No. 20-1530, cert granted 10/29/21; North American Coal Co. v. EPA, U.S., No. 20-1531, cert granted 10/29/21; Westmoreland Mining Holdings v. EPA, U.S., No. 20-1778, cert granted 10/29/21; and North Dakota v. EPA, U.S., No. 20-1780, cert granted 10/29/21.