I returned from the Middle East on Monday. Daily student blog posts from our environmental field trip to study water issues are available at my parallel blog (www.globalenvironmentallaw.com).
Yesterday I attended the Michigan v. EPA oral argument in the U.S. Supreme Court with a group of my students (who got in line before 6AM in order to get seats). The case involves a challenge to EPA's historic regulations to limit mercury emissions from power plants. The specific question the Court is considering is whether EPA is required to consider costs when it decides to regulate emissions of hazardous air pollutants from powerplants. The statute requires EPA to regulate these pollutants if it determines regulation to be “necessary and appropriate.” Representatives of old, coal-fired powerplants argue that “appropriate” requires EPA to base its regulatory determination on cost-benefit analysis. As usual, Justice Kennedy will be the key to the outcome. His opening line that “’appropriate’ is a capacious term” and his pointed question to the industry petitioners asking whether cost-benefit analysis is required whenever the word “appropriate” appears in the statute, suggest he is persuadable by the government.
Both Kennedy and Chief Justice Roberts seemed concerned about the cost of the regulations. The Chief seemed dismissive of EPA’s conclusion that the regulation would have overwhelming net benefits because most of them were “co-benefits” derived from reductions in other pollutants. He suggested this could represent an illegitimate “end run” by EPA around other restrictions in the Act.
Paul Smith, who clerked at the Court the same Term I did, was terrific. He was particularly effective in responding to Justice Kennedy’s question about cost, and indicated that most of the costs already had been incurred by utilities who plan to comply with the rule. It was so refreshing to see someone representing industry groups defending a n EPA regulation in order to keep a level playing field. While this is useful for EPA in this case, it may add a bit of force to the industry argument in the Murray Energy case (being argued in the D.C. Circuit on April 16) that given long lead times for capital projects courts should intervene even before regulations (the Clean Power Plan regs) are issued. The panel that has been assigned to hear that case (Judges Henderson, Griffith and Kavanaugh) portends a potentially surprising (even if temporary) defeat for EPA in what should be an easy case because there is no final agency action yet.
Justices Scalia and Alito clearly have bought into the Tea Party rant that EPA can do no right (no surprise). At several points in the argument yesterday Justices Kagan and Sotomayor were directly (and effectively) debating them. Justice Scalia tried to characterize an argument Justice Breyer made as an effort to rescue EPA by concocting an entirely new argument (which it was not). The editors of the Wall Street Journal seized on Scalia’s claim in an editorial today (“Surprise at the Supreme Court: Justice Breyer Pulls a Fast One to Rescue EPA’s Mercury Rule”), which is online at: http://www.wsj.com/articles/surprise-at-the-supreme-court-1427325513?mod=wsj_review_&_outlook). The Journal yet again uses its editorial page to file its own post-argument brief, here trying to convince Kennedy’s chambers that EPA is so clearly wrong legally that Justice Breyer had to try to rescue them.
After rejecting other creative assaults on the Clean Air Act in American Trucking and EME Homer City, the Supreme Court would be venturing into new territory if it rules against EPA. As a practical matter, however, it would not raise a significant legal bar to EPA reissuing the regulations. But it would delay them for several years and reward the industry laggards who wish to keep the aging, big dirties operating as long as possible.