West Virginia v. EPA

Supreme Court of the United States
597 U. S. ____ (2022) (2022)

ELI5:

Rule of Law:

Under the major questions doctrine, an administrative agency must have clear congressional authorization to regulate on an issue of vast economic and political significance; authority cannot be inferred from broad or vague statutory language. Section 111(d) of the Clean Air Act does not provide the Environmental Protection Agency (EPA) with such clear authorization to implement a nationwide "generation shifting" scheme to regulate carbon emissions.

Facts:

In 2015, the Environmental Protection Agency (EPA) promulgated the Clean Power Plan (CPP) to regulate carbon dioxide emissions from existing coal- and natural-gas-fired power plants under Section 111 of the Clean Air Act.
The EPA determined the 'best system of emission reduction' (BSER) for these plants involved three components or 'building blocks': (1) improving heat-rate efficiency at coal plants; (2) shifting electricity generation from coal-fired to natural-gas-fired plants; and (3) shifting generation from both coal and gas plants to renewable sources like wind and solar.
The 'generation shifting' components, which were intended to restructure the nation's energy production at a grid-wide level, formed the core of the CPP's reduction strategy.
To comply, plant operators could reduce their own production, invest in cleaner energy sources, or purchase emissions allowances as part of a cap-and-trade system.
The EPA set emissions performance rates so stringent that no existing coal plant could meet them without engaging in generation shifting.
The CPP was projected to shift the nation's energy portfolio, reducing coal's share of national electricity generation from 38% in 2014 to a target of 27% by 2030.
In 2019, a subsequent administration's EPA repealed the CPP, concluding it exceeded statutory authority because Section 111(d) limited the BSER to measures applicable at an individual facility.
The EPA then promulgated the Affordable Clean Energy (ACE) Rule, which defined the BSER narrowly as only heat-rate improvements at individual coal plants.

Procedural Posture:

A coalition of states and private parties filed petitions for review in the U.S. Court of Appeals for the D.C. Circuit, challenging the EPA's 2019 repeal of the Clean Power Plan (CPP) and its enactment of the replacement Affordable Clean Energy (ACE) Rule.
West Virginia, North Dakota, and several coal companies (Petitioners) intervened in the D.C. Circuit to defend the EPA's actions.
The D.C. Circuit consolidated the cases and held that the EPA’s repeal of the CPP was based on a 'mistaken reading of the Clean Air Act.'
The D.C. Circuit vacated the repeal of the CPP and the ACE rule, remanding the matter to the EPA for further consideration.
After a change in administrations, the EPA successfully moved the D.C. Circuit to partially stay the part of its mandate that vacated the CPP repeal.
West Virginia and the other intervening parties (Petitioners) petitioned the U.S. Supreme Court for a writ of certiorari, which was granted.

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Issue:

Does Section 111(d) of the Clean Air Act grant the Environmental Protection Agency (EPA) the authority to set emissions caps for existing power plants based on a 'generation shifting' approach, which involves shifting electricity production from higher-emitting sources to lower-emitting ones?

Opinions:

Majority - Roberts, C.J.

No. Congress did not grant the EPA in Section 111(d) of the Clean Air Act the authority to devise emissions caps based on the generation shifting approach taken in the Clean Power Plan. This case involves a 'major question' because the EPA claimed a transformative and unheralded power to restructure the American energy market, an issue of vast economic and political significance. For an agency to take such action, it must have clear and explicit authorization from Congress. The EPA's historical application of Section 111 involved setting technology-based standards for individual sources to operate more cleanly, not mandating a sector-wide shift in energy production. The agency's novel interpretation was based on a vague, rarely used, 'gap-filler' provision of the Act. Such a subtle and ancillary provision is not the place where Congress would hide a power of this magnitude, especially after Congress itself had repeatedly considered and declined to enact similar cap-and-trade legislation. Therefore, the phrase 'best system of emission reduction' does not constitute the clear congressional authorization necessary to justify the Clean Power Plan.

Concurring - Gorsuch, J.

No. This case properly applies the major questions doctrine, which serves as a vital clear-statement rule to protect the Constitution's separation of powers by ensuring that all legislative power remains vested in Congress. The doctrine prevents administrative agencies from using vague statutory language to make law on major policy issues that should be decided by the people's elected representatives. Telltale signs of a major question include an agency's attempt to resolve a matter of great political and economic significance, to regulate a significant portion of the economy, or to intrude on areas of traditional state authority. The EPA's Clean Power Plan implicates all of these. To satisfy the doctrine, an agency must point to a clear grant of authority, not an oblique phrase in a rarely used part of an old statute. The EPA's action represents precisely the kind of agency overreach the major questions doctrine is designed to prevent, safeguarding democratic accountability.

Dissenting - Kagan, J.

Yes. The text of Section 111 of the Clean Air Act plainly authorizes the EPA's action, and the majority's creation of a 'major questions doctrine' is an improper judicial invention to thwart necessary regulation. The statutory command for the EPA to identify the 'best system of emission reduction' is a broad and flexible delegation, and generation shifting is demonstrably the most effective and efficient system for reducing carbon emissions from power plants. Unlike other parts of the Clean Air Act, Section 111(d) is not limited to 'technological' solutions, showing Congress intended for the EPA to have latitude. Regulating pollution from power plants is squarely within the EPA's expertise and core mission. The majority substitutes its own policy judgments for those of Congress and the expert agency, creating a 'get-out-of-text-free card' to prevent the executive branch from addressing the most pressing environmental challenge of our time. The Court, which has no expertise in climate change, is appointing itself the decision-maker on climate policy, which is a frightening development.

Analysis:

This decision formally elevates and strengthens the 'major questions doctrine' as a significant constraint on the power of administrative agencies. It establishes a high bar for agencies seeking to enact transformative or economically significant regulations, requiring them to ground their authority in explicit and unambiguous statutory text rather than broad interpretations. The ruling will likely curtail ambitious federal regulatory initiatives on complex issues like climate change, public health, and technology, shifting the onus to a frequently gridlocked Congress to legislate with greater specificity. Consequently, the case marks a substantial transfer of policy-making power from the executive branch to Congress and, by extension, to the judiciary, which will now play a larger role in determining the scope of agency authority.

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