On April 29, 2014, in a 6-2 ruling, the U.S. Supreme Court upheld EPA's view in EPA v. EME Homer City Generation L.P., U.S. Nos. 12-1182 and 12-1183. The opinion is available online.
The decision reverses a 2012 ruling by the U.S. Court of Appeals for the District of Columbia Circuit, holding that EPA's Cross-State Air Pollution Rule (CSAPR) exceeded EPA's authority to regulate greenhouse gas emissions under the Clean Air Act (CAA). The CSAPR -- issued under the Obama Administration and which strengthened a similar rule issued in 2005 by the Bush Administration -- requires 28 upwind states to reduce power plant emissions to help downwind states achieve national ambient air quality standards (NAAQS).
The Supreme Court held that the EPA permissibly created the CSAPR, in part considering cost effectiveness. As such, it is within EPA's authority under the CAA to include within CSAPR its "Good Neighbor" provision requiring upwind states to help downwind states meet NAAQS and imposition of federal implementation plans (FIP) "after EPA has quantified the state's interstate pollution obligation." More information on the case and the Supreme Court's holding is available online.