West Virginia v. EPA
597 U.S. 697 (2022)
Rule of Law:
The 'major questions doctrine' requires an administrative agency to point to clear congressional authorization when it seeks to exercise authority of vast economic and political significance. Section 111(d) of the Clean Air Act does not provide the Environmental Protection Agency with clear authorization to devise emissions caps for existing power plants based on a system of 'generation shifting' that compels a shift in electricity production from higher-emitting to lower-emitting sources.
Facts:
- In 2015, the Environmental Protection Agency (EPA) promulgated the Clean Power Plan rule to address carbon dioxide emissions from existing coal- and natural-gas-fired power plants.
- The Clean Power Plan determined that the 'best system of emission reduction' (BSER) for existing power plants included three 'building blocks': heat rate improvements, and two types of 'generation shifting' from coal to natural gas, and from both coal and natural gas to renewable sources like wind and solar.
- EPA explained that generation shifting could be implemented by reducing a plant's own electricity production, investing in cleaner energy sources, or purchasing emission allowances in a cap-and-trade regime.
- The emissions limits established by the Clean Power Plan were so strict that no existing coal plant would have been able to achieve them without engaging in one of the three means of generation shifting.
- EPA projected the Clean Power Plan would impose billions in compliance costs, raise retail electricity prices, require the retirement of dozens of coal plants, and eliminate tens of thousands of jobs across various sectors.
- In 2019, EPA repealed the Clean Power Plan, determining it had exceeded statutory authority because generation shifting was not a 'system of emission reduction' under Section 111(d), and replaced it with the Affordable Clean Energy (ACE) rule, which focused only on heat rate improvements.
Procedural Posture:
- Dozens of parties, including 27 States, petitioned for review of the Clean Power Plan in the United States Court of Appeals for the District of Columbia Circuit.
- The D.C. Circuit declined to stay the rule, leading challengers to seek relief from the Supreme Court.
- The Supreme Court granted a stay of the Clean Power Plan in 2016, preventing it from taking effect.
- The D.C. Circuit heard arguments on the merits en banc, but before a decision was issued, a change in Presidential administrations led to a request for the litigation to be held in abeyance for EPA to reconsider the rule.
- The D.C. Circuit later dismissed the petitions for review as moot.
- After EPA repealed the Clean Power Plan and promulgated the Affordable Clean Energy (ACE) rule in 2019, a number of States and private parties filed petitions for review in the D.C. Circuit, challenging both actions.
- The D.C. Circuit consolidated the cases and held that EPA's repeal of the Clean Power Plan rested on a mistaken reading of the Clean Air Act, finding that generation shifting could be a 'system of emission reduction' under Section 111.
- The D.C. Circuit vacated EPA's repeal of the Clean Power Plan and the ACE rule, and remanded both actions to the Agency for further consideration.
- Following another change in Presidential administrations, EPA moved the D.C. Circuit to partially stay its mandate as to the Clean Power Plan while the Agency considered promulgating a new Section 111(d) rule; the court granted this motion.
- Westmoreland Mining Holdings LLC, The North American Coal Corporation, and several States defending the repeal of the Clean Power Plan all filed petitions for certiorari to the Supreme Court, which were granted and consolidated.
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Issue:
Does Section 111(d) of the Clean Air Act clearly authorize the Environmental Protection Agency to set emissions caps for existing power plants based on a system that compels a shift in electricity generation from higher-emitting to lower-emitting sources, or does such an action exceed the Agency's statutory authority 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 for existing power plants based on the generation shifting approach taken in the Clean Power Plan. The Court determined that this case falls under the 'major questions doctrine,' which requires clear congressional authorization for agency actions of vast economic and political significance. Historically, EPA had always set Section 111 emissions limits based on measures that reduce pollution by causing the regulated source to operate more cleanly, not by compelling shifts in overall electricity generation across the grid. The Clean Power Plan's approach was unprecedented, representing a 'transformative expansion' of EPA's regulatory authority into fundamental questions of national energy policy, an area where the agency admitted it lacked traditional expertise. Furthermore, the Court noted that Congress had repeatedly considered and rejected cap-and-trade schemes, similar to the one effectively adopted by the Clean Power Plan. Given the economic and political significance of restructuring the national energy market, the vague term 'best system of emission reduction' in Section 111(a)(1) is not 'clear congressional authorization' sufficient to overcome the skepticism required by the major questions doctrine.
Concurring - Justice Gorsuch
Yes, Justice Gorsuch joined the majority, emphasizing that the major questions doctrine serves as a vital clear-statement rule to protect the Constitution's separation of powers by ensuring that federal legislative power remains with Congress. He explained that this doctrine applies when an agency seeks to resolve a matter of great political significance, regulate a significant portion of the American economy, or intrude into areas traditionally governed by state law. All these triggers were present in this case, as EPA claimed authority to force power plants to cease operating, an issue Congress frequently debated and rejected, affecting a major sector of the economy, and encroaching on state authority over utilities. Justice Gorsuch noted that the EPA's reliance on a rarely invoked statutory provision, a lack of historical precedent for such an interpretation, and a mismatch between EPA's expertise and the complex energy policy decisions it sought to make further confirmed the absence of clear congressional authorization required for such a major question.
Dissenting - Justice Kagan
Yes, Section 111(d) of the Clean Air Act does authorize the EPA to set emissions caps for existing power plants based on generation shifting. The dissent argued that the plain meaning of 'best system of emission reduction' is broad and flexible, designed to allow EPA to respond effectively to evolving environmental challenges like climate change. Justice Kagan contended that the majority misapplied the major questions doctrine, which she described as replacing normal statutory interpretation with a tougher-to-satisfy set of rules, thereby allowing the Court to substitute its own policy preferences for Congress's. She asserted that regulating power plant emissions, including through generation shifting, falls squarely within EPA's expertise, as recognized by prior Supreme Court decisions and common regulatory practice. The Clean Power Plan was not 'new' or 'big' in a way that should trigger special judicial skepticism, as similar methods have been used, and all power plant regulations affect the energy mix. The dissent concluded that the Court's decision strips EPA of the power Congress clearly granted to address the urgent crisis of climate change, constituting judicial overreach.
Analysis:
This decision significantly curtails the EPA's ability to regulate greenhouse gas emissions from existing power plants, reining in agency power under Section 111(d) of the Clean Air Act. It represents a substantial victory for proponents of limited administrative state authority and strengthens the application of the major questions doctrine. Future agency actions that touch on issues of 'vast economic and political significance' will face heightened scrutiny, requiring agencies to demonstrate 'clear congressional authorization' rather than relying on broad statutory language or implicit delegations. This could lead to more legislative stalemates on complex policy issues, particularly environmental regulation, as Congress may struggle to provide the granular 'clear authorization' the Court now demands for agency innovation.
