Utility Air Regulatory Group v. EPA
573 U.S. 302 (2014)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An administrative agency may not interpret a statute to vastly expand its own regulatory authority in a manner inconsistent with the statutory structure, nor may it rewrite clear statutory terms to mitigate the unreasonableness of its interpretation. However, an agency may require sources already subject to permitting for conventional pollutants to also control their emissions of other regulated pollutants, such as greenhouse gases.
Facts:
- The Clean Air Act's Prevention of Significant Deterioration (PSD) and Title V programs require permits for 'major' stationary sources.
- The Act defines a 'major' source as one with the potential to emit 100 or 250 tons per year of 'any air pollutant.'
- After the Supreme Court held in Massachusetts v. EPA that greenhouse gases (GHGs) are 'air pollutants,' the EPA promulgated emission standards for new motor vehicles.
- The EPA then concluded that its regulation of GHGs from vehicles automatically triggered the PSD and Title V permitting requirements for any stationary source emitting GHGs above the 100/250-ton thresholds.
- Recognizing that applying these low thresholds to GHGs would sweep millions of small commercial and residential buildings into a complex regulatory scheme designed for large industrial facilities, the EPA issued a 'Tailoring Rule.'
- The Tailoring Rule unilaterally raised the statutory permitting thresholds for GHGs to 75,000 and 100,000 tons per year to avoid what the EPA itself called an 'unadministrable' and 'unrecognizable' program.
- The EPA's rules also required sources already subject to permitting due to their conventional pollutant emissions (known as 'anyway' sources) to implement the 'best available control technology' (BACT) for their GHG emissions.
Procedural Posture:
- Numerous parties, including the Utility Air Regulatory Group and several states, filed petitions for review of the EPA's greenhouse gas regulations in the U.S. Court of Appeals for the District of Columbia Circuit.
- The Court of Appeals denied the petitions, holding that the Clean Air Act compelled the EPA's interpretation that its regulation of vehicle emissions automatically triggered permitting requirements for stationary sources.
- The Court of Appeals also found that petitioners lacked standing to challenge the 'Tailoring Rule' because it relaxed, rather than imposed, a regulatory burden.
- The U.S. Supreme Court granted certiorari to review the decision of the Court of Appeals.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the Environmental Protection Agency permissibly interpret the Clean Air Act to require stationary sources to obtain Prevention of Significant Deterioration (PSD) and Title V permits based on their potential greenhouse gas emissions?
Opinions:
Majority - Justice Scalia
No. The EPA may not interpret the Clean Air Act to require a source to obtain a PSD or Title V permit on the sole basis of its potential greenhouse-gas emissions. First, the EPA's interpretation of the permitting triggers is impermissible. While greenhouse gases are 'air pollutants' under the Act's general definition, context requires a narrower reading for the permitting triggers. Applying the statutory 100/250-ton thresholds to GHGs creates an absurd result inconsistent with the Act's structure, which was designed for a handful of large industrial sources, not millions of small ones. An agency cannot claim a transformative expansion of its regulatory authority over a 'significant portion of the American economy' without clear congressional authorization. Second, the EPA's 'Tailoring Rule' was an unlawful attempt to rewrite the statute's unambiguous numerical thresholds. An agency cannot fix its own unreasonable statutory interpretation by unilaterally revising clear legislative text. However, for sources that are already required to obtain PSD permits because of their emissions of conventional pollutants ('anyway' sources), the EPA can permissibly require them to also implement the 'best available control technology' (BACT) for greenhouse gases, as the BACT provision applies more specifically to 'each pollutant subject to regulation.'
Concurring in part and dissenting in part - Justice Breyer
While agreeing that applying the 100/250-ton thresholds to greenhouse gases produces absurd results, the majority's solution of reading GHGs out of the term 'any air pollutant' for triggering purposes is incorrect. The more sensible approach is to recognize an implicit exception in the numerical threshold itself when it does not provide a 'sensible regulatory line.' This would give the EPA the flexibility, consistent with Congress's intent, to adjust the unworkable number through regulations like the Tailoring Rule, rather than creating an anomalous carve-out for a specific type of pollutant. This interpretation better serves the Act's purpose and flexibility. I concur with the majority's conclusion that 'anyway' sources are subject to BACT for greenhouse gases.
Concurring in part and dissenting in part - Justice Alito
While concurring that the EPA cannot trigger permitting requirements based on greenhouse gases or rewrite statutory thresholds, I dissent from the conclusion that 'anyway' sources must implement BACT for GHG emissions. The BACT analysis is 'fundamentally incompatible' with regulating GHGs because it is a case-by-case process that requires consideration of local air quality impacts. Greenhouse gases have global, not local, effects, making the statutory BACT framework unworkable and leading to arbitrary decision-making. If the PSD permitting process is not suited for regulating GHGs as a trigger, it makes little sense to require BACT for GHGs when a source is incidentally subject to the program for other pollutants.
Analysis:
This decision significantly curtailed the EPA's authority to regulate greenhouse gases under the Clean Air Act's existing permitting framework, representing a major application of the 'major questions doctrine.' The Court established that an agency cannot interpret a statute in a way that dramatically expands its own power and creates unworkable, absurd results, and then attempt to 'fix' those results by rewriting unambiguous statutory language. While it stopped the EPA from using the PSD and Title V programs to regulate millions of smaller sources based solely on GHGs, it preserved the agency's authority to require GHG controls for the nation's largest industrial polluters that are already being regulated for conventional pollutants.
