West Virginia v. EPA
597 U. S. ____ (2022) (2022)
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Rule of Law:
The Major Questions Doctrine requires clear congressional authorization for agency actions of vast economic and political significance, and Section 111(d) of the Clean Air Act does not grant the Environmental Protection Agency (EPA) the authority to devise emissions caps for existing power plants based on a generation-shifting approach.
Facts:
- In 2015, the Environmental Protection Agency (EPA) promulgated the Clean Power Plan rule under Section 111(d) of the Clean Air Act to address carbon dioxide emissions from existing coal- and natural-gas-fired power plants.
- Prior to the Clean Power Plan, EPA had used Section 111(d) only a handful of times since 1970, typically identifying source-specific, efficiency-improving measures as the 'best system of emission reduction' (BSER).
- The Clean Power Plan determined the BSER for existing plants included 'building blocks': (1) heat rate improvements at coal-fired plants, (2) a shift in electricity production from existing coal-fired to natural-gas-fired plants, and (3) a shift from both coal and gas plants to renewables (wind and solar), collectively known as 'generation shifting'.
- The emissions limits set by EPA were so stringent that no existing coal plant could achieve them without engaging in one of the generation-shifting means (e.g., reducing its own production, building cleaner plants, or purchasing emission credits).
- EPA projected that the Clean Power Plan would reduce coal's share of national electricity generation from 38% in 2014 to 27% by 2030, impose billions in compliance costs, raise retail electricity prices, require the retirement of dozens of coal plants, and eliminate tens of thousands of jobs.
- In 2019, after a change in Presidential administrations, EPA repealed the Clean Power Plan, concluding it exceeded statutory authority and fell under the major questions doctrine, replacing it with the Affordable Clean Energy (ACE) rule, which limited the BSER to equipment upgrades and operating practices.
Procedural Posture:
- Dozens of parties, including 27 states, filed petitions for review of the Clean Power Plan in the U.S. Court of Appeals for the D.C. Circuit.
- The D.C. Circuit declined to enter a stay of the rule, leading challengers to seek a stay from the U.S. Supreme Court, which granted the stay in West Virginia v. EPA (2016), preventing the rule from taking effect.
- The D.C. Circuit later heard argument on the merits en banc, but before it could issue a decision, a new Presidential administration requested that the litigation be held in abeyance so that EPA could reconsider the Clean Power Plan, and the D.C. Circuit later dismissed the petitions for review as moot.
- After EPA repealed the Clean Power Plan in 2019 and replaced it with the Affordable Clean Energy (ACE) Rule, a number of states and private parties (including West Virginia, North Dakota, Westmoreland Mining Holdings LLC, and The North American Coal Corporation as intervenors) filed petitions for review in the D.C. Circuit, challenging the repeal of the Clean Power Plan and the enactment of the ACE Rule.
- The D.C. Circuit consolidated the cases and held that EPA’s repeal of the Clean Power Plan was based on a mistaken reading of the Clean Air Act, concluding that generation shifting could be a 'system of emission reduction' under Section 111 and that the major questions doctrine did not apply.
- The D.C. Circuit vacated EPA’s repeal of the Clean Power Plan and remanded to the Agency for further consideration, and also vacated and remanded the ACE rule for the same reason.
- Following another change in Presidential administrations, EPA moved the D.C. Circuit to partially stay its mandate as it pertained to the Clean Power Plan while the Agency considered whether to promulgate a new Section 111(d) rule, which the court granted.
- Westmoreland Mining Holdings LLC, The North American Coal Corporation, and the States defending the repeal of the Clean Power Plan filed petitions for certiorari to the Supreme Court, which granted and consolidated the cases.
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Issue:
Does Section 111(d) of the Clean Air Act grant the Environmental Protection Agency (EPA) the authority to establish emissions limits for existing power plants based on a 'best system of emission reduction' that compels a shift in electricity generation from higher-emitting to lower-emitting sources, or does such an action exceed the agency's statutory power under the Major Questions Doctrine?
Opinions:
Majority - Chief Justice Roberts
No, Section 111(d) of the Clean Air Act does not grant the EPA the authority to devise emissions caps based on the generation-shifting approach taken in the Clean Power Plan. The Court found that this case falls under the Major Questions Doctrine, which requires clear congressional authorization for agency actions of vast economic and political significance. EPA's claim to discover an 'unheralded power' to restructure a fundamental sector of the economy (electricity generation) in the vague language of a 'long-extant, but rarely used, statute designed as a gap filler' triggers this doctrine. Prior to 2015, EPA consistently set Section 111 limits based on measures that would cause regulated sources to operate more cleanly, not by shifting generation from 'dirtier to cleaner sources.' The Clean Power Plan's approach was unprecedented and effected a 'fundamental revision of the statute' (MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 231 (1994)). The Court noted that EPA itself admitted issues of electricity transmission, distribution, and storage are outside its traditional expertise. Furthermore, Congress had conspicuously and repeatedly declined to enact cap-and-trade schemes for carbon, which the Clean Power Plan essentially adopted. The Court concluded that the vague statutory grant in Section 111(a)(1) — 'best system of emission reduction' shorn of all context — does not provide the 'clear congressional authorization' required for such a significant assertion of power (Utility Air Regulatory Group v. EPA, 573 U. S. 302, 324 (2014)).
Concurring - Justice Gorsuch
No, Section 111(d) does not grant the EPA the authority for the generation-shifting approach. Justice Gorsuch elaborated on the Major Questions Doctrine, framing it as a clear-statement rule that protects the Constitution's separation of powers by ensuring that Congress, not unelected agencies, makes major policy decisions. He identified several factors that indicate a major question: when an agency claims power to resolve a matter of great 'political significance' (NFIB v. OSHA, 595 U. S. ___, ___ (2022)), seeks to regulate 'a significant portion of the American economy' (Utility Air, 573 U. S., at 324), or intrudes into an area traditionally governed by state law. He asserted that all these factors were present, as EPA claimed power to force power plants to cease operating, regulated the massive electricity sector, and impacted state utility regulation. He noted the agency relied on an 'obscure, never-used section of the law,' claimed 'unheralded power,' and exhibited a 'mismatch' between its expertise and the claimed authority to balance national energy policy. These elements confirmed the lack of clear congressional authorization.
Dissenting - Justice Kagan
Yes, Section 111(d) of the Clean Air Act grants EPA the power to address climate change, including through generation shifting, because the statute broadly authorizes EPA to select the 'best system of emission reduction.' Justice Kagan argued that the term 'system' is naturally broad and encompasses generation-shifting tools like cap-and-trade, which the Act uses elsewhere (e.g., Acid Rain and NAAQS programs). She highlighted that Congress deliberately chose not to restrict EPA to 'technological' controls for existing sources in Section 111, contrasting it with other provisions, demonstrating an intent for flexibility. She contended that the 'Major Questions Doctrine' as articulated by the majority replaces normal statutory interpretation with an artificial, tougher standard. Justice Kagan argued that prior cases applying this concept involved agencies operating far outside their traditional expertise or conflicting with the statutory scheme, neither of which is true here, as EPA is the 'primary regulator of greenhouse gas emissions' (American Elec. Power Co. v. Connecticut, 564 U. S. 410, 428 (2011)) and generation shifting is a well-established pollution control tool. She noted that the Clean Power Plan's projected impact was not as massive as portrayed, and that Congress delegates broad authority precisely so agencies can adapt to changing circumstances and scientific developments, ensuring the statute's continued effectiveness (Massachusetts v. EPA, 549 U. S. 497, 532 (2007)). The Court, she argued, appoints itself as the decision-maker on climate policy, rather than Congress or the expert agency.
Analysis:
This case significantly reinforces and clarifies the Major Questions Doctrine, establishing it as a powerful tool for judicial review of agency action. By applying the doctrine to reject EPA's generation-shifting approach, the Court has signaled a higher bar for agencies seeking to address issues of 'vast economic and political significance' without explicit statutory language. This decision will likely compel Congress to be more specific when delegating authority for significant policy matters, potentially leading to legislative gridlock on complex issues like climate change. It also curtails EPA's flexibility in responding to climate change under existing statutory frameworks, necessitating new legislation for comprehensive regulatory solutions involving market-based or sector-wide approaches.
