US Supreme Court Appears Ready to Address GHG Issue Left Unresolved by Court of Appeals

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On October 15, 2013, the United States Supreme Court agreed to hear the challenge to EPA’s greenhouse gas (GHG) regulations. The Court consolidated six different appeals from the decision of the United States Court of Appeals for the District of Columbia Circuit to uphold EPA’s GHG regulations. The Supreme Court ordered that the appeal is limited to the following question: “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

This is an issue that the DC Circuit expressly did not reach. Rather, the DC Circuit ruled that those challenging EPA’s GHG regulations lacked standing to raise this issue, and therefore the DC Circuit had no jurisdiction to evaluate the merits of the challenge to EPA’s authority to extend regulations to stationary sources.

By limiting the appeal to this single issue, the Supreme Court suggests that it agrees with the DC Circuit’s decision to uphold EPA’s Endangerment Finding, but disagrees regarding the standing/jurisdictional issue. The Supreme Court also indicates that it will address the substantive challenge to EPA’s GHG regulations, which the DC Circuit refused to resolve.

The Supreme Court’s eventual ruling will probably address standing, at least to some extent, because standing goes to the Court’s jurisdiction. However, the wording of the issue on appeal indicates that the Supreme Court will again tell the DC Circuit that courts must be more flexible on standing, and more open to groups suing over environmental matters. While the greater flexibility on standing will help industry in this case, the standing doctrine often presents a challenge to environmental groups. The Supreme Court’s standing analysis may provide more opportunities for environmental groups to bring future cases, in both regulatory challenges and citizen suits.

Regarding the substance of EPA’s GHG regulations, it appears that the Supreme Court will hear industry’s argument that Congress did not give, and did not intend to give, EPA authority to regulate GHG from stationary sources under the existing Clean Air Act. Among the arguments supporting industry’s position is that EPA admitted that strictly applying the Clean Air Act’s statutory threshold for regulating a pollutant (generally 100 tons per year or less) to GHG would yield an “absurd result.” EPA attempted to avoid the absurd result by adopting the Tailoring Rule, which exempted from GHG regulation those sources with GHG emissions up to 1,000 times or more than the statutory threshold. Industry argues that EPA’s need to deviate so dramatically from the express provisions of the Clean Air Act to avoid the “absurd result” demonstrates that the Clean Air Act does not provide authority for EPA to regulate GHG from stationary sources.

The Supreme Court’s order also said that it would allow an hour for oral argument, which is more than most cases get. The Court has not yet set a briefing schedule or indicated when it will hear oral argument. An actual ruling may take a year or more.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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