West Virginia v. EPA

 From Oyez (link):

Facts of the case

The Trump administration repealed the 2015 Clean Power Plan, which established guidelines for states to limit carbon dioxide emissions from power plants, and issued in its place the Affordable Clean Energy (ACE) Rule, which eliminated or deferred the guidelines. However, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE Rule as arbitrary and capricious. One of the challengers, North American Coal Corporation, challenged the Environmental Protection Agency’s authority to so broadly regulate greenhouse gas emissions.

Question

Does the Environmental Protection Agency have the authority to regulate greenhouse gas emissions in virtually any industry, so long as it considers cost, non-air impacts, and energy requirements?

Conclusion

Congress did not grant the Environmental Protection Agency in Section 111(d) of the Clean Air Act the authority to devise emissions caps based on the generation shifting approach the Agency took in the Clean Power Plan.

Under the “major questions doctrine,” there are “extraordinary cases” in which the “history and the breadth of the authority that [the agency] has asserted,” and the “economic and political significance” of that assertion, provide a “reason to hesitate before concluding that Congress” meant to confer such authority. This is one such case, so the EPA must point to “clear congressional authorization” for the authority it claims. It cannot do so.

The EPA has admitted that issues of electricity transmission, distribution, and storage are not within its traditional expertise, yet it claims that Congress implicitly tasked it with the regulation of how Americans get their energy. Without “clear congressional authorization” for the EPA to regulate in such a manner, the agency lacks authority to implement the Clean Power Plan under the Clean Air Act.

Here is a nice summary of the scope of the regulation from the Davis-Polk Law firm:

Background. Issued by EPA in August 2015, the CPP was the centerpiece of the Obama Administration’s climate change strategy.  The goal of the CPP was to reduce CO₂ emissions from the power sector by thirty-two percent by 2030 relative to 2005 emissions.  To accomplish this goal, the CPP, issued under Section 111(d) of the CAA, called on states to prepare plans that would employ three measures, or “building blocks,” that, in combination, would reduce power sector emissions to meet the CPP’s targets. These building blocks included (1) improving the efficiency of coal-fired power plants, (2) shifting electricity generation from coal-fired power plants to lower emitting existing natural gas combined cycle plants, and (3) shifting electricity generation from fossil fuel-fired power plants to new wind, solar and other renewable sources.  The “generation shifting” called for by the second and third building blocks was novel: while traditional emissions control measures involve the implementation of some sort of technology at the source of the pollution, the CPP would regulate GHG emissions “beyond the fenceline” of an individual facility.  EPA took the position that “generation shifting” was consistent with Section 111(d), which directs EPA to determine the “best system of emissions reduction,” or “BSER” for a source in a regulated category (in this case, the power sector).  According to EPA, because existing “within the fenceline” controls would not meaningfully reduce GHG emissions from coal-fired power plants, the “best system” of reducing GHG emissions necessarily required an overall shift in the fuel mix of the power sector.

 

Davis-Polk also summarized the Court's holding:

In its opinion, the Court applied the two part analysis of the major questions doctrine to assess the validity of the CPP:

1. Does the “history and the breadth of the authority that [the agency] has asserted, and the economic and political significance of that assertion, provide a reason to hesitate before concluding that Congress meant to confer such authority”?
2. If the answer to this question is “yes,” the government “must point to clear congressional authorization for the power it claims.”

With regard to the first point, the Court concluded that the CPP presented a major question.  Citing a number of precedents – including the Court’s rejection of OSHA’s COVID-19 vaccine mandate and the CDC’s eviction moratorium earlier this term – the Court looked to a number of factors in reaching this conclusion: (1) the breadth of the authority being asserted by EPA, namely, to dictate the “generation mix” of the power sector, (2) the lack of any prior EPA rules employing “beyond the fenceline” measures under Section 111(d), (3) the unlikelihood that Congress would have intended a legislative “backwater” such as Section 111(d) to be used as the basis for a rulemaking of this breadth, (4) EPA’s lack of expertise with respect to energy policy, and (5) the fact that the CPP addresses an issue that is the subject of ongoing debate at the congressional level and that Congress has repeatedly considered and failed to enact legislation of similar nature and scope as the CPP, e.g., cap-and-trade programs or a carbon tax. 

Having classified the case as involving a major question, the Court analyzed whether the EPA pointed to “clear congressional authorization” for the CPP.  The Court concluded that EPA failed to do so.  The statutory text asserted by EPA as providing the authorization for the “generation shifting” provisions of the CPP was the requirement under Section 111(d) of the CAA that EPA determine the “best system of emissions reduction.”  EPA asserted that the term “system” is broad enough to encompass shifting electricity generation from higher emissions sources to lower emitting ones. While the Court agreed that the word “system” was broad enough to cover generation shifting, that very breadth meant that the term was too vague to constitute the “clear congressional authorization” required by the major questions doctrine:

[O]f course almost anything could constitute such a “system”; shorn of all context, the word is an empty vessel. Such a vague statutory grant is not close to the sort of clear authorization required by our precedents.

Justice Gorsuch’s concurrence. Notably, Justice Roberts did not articulate a set of specific factors that courts should consider in determining whether a particular regulation constitutes a major question. Justice Gorsuch, in a concurring opinion joined by Justice Alito, did just that.  Justice Gorsuch identified three situations where the major questions doctrine may apply:

1. when an agency claims the power to resolve a matter of great “political significance,”
2. when an agency seeks to regulate “a significant portion of the American economy,” and
3. when an agency seeks to “intrud[e] into an area that is the particular domain of state law.”

Justice Gorsuch concluded that each of these situations is present here, “making this a relatively easy case for the doctrine’s application.”

 

Basically, the EPA was trying to transform how power plants produce electricity by forcing them to shift from coal to natural gas for production.

Here is a link to the Davis-Polk paper.

And here is how Chemerinsky explains the holding of West Virginia: "The Court then said that when it comes to such major questions, Congress must be specific in empowering the federal agency to act. Chief Justice Roberts wrote: 'Thus, in certain extraordinary cases, both separation of powers principles and a practical understanding of legislative intent makes us 'reluctant to read into ambiguous statutory text' the delegation claimed to be lurking there.' To convince us otherwise, something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to 'clear congressional authorization' for the power it claims.'"

This doctrine is one part constitutional policy (separation of powers principles) and one part statutory interpretation.