U.S. Supreme Court Grants Narrow Review of EPA's Greenhouse Gas Regulatory Regime But Refuses to Review EPA's Endangerment Finding


On Oct. 15, 2013, the U.S. Supreme Court granted six petitions for review challenging the D.C. Circuit Court of Appeals' decision affirming the U.S. Environmental Protection Agency's ("EPA") suite of greenhouse gas ("GHG") regulations. The Supreme Court limited its review to one 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."

Significantly, the Supreme Court denied three petitions for review challenging EPA's conclusion that carbon dioxide emissions endanger the public health and welfare (EPA's "Endangerment Finding") and that the Clean Air Act contemplated the regulation of GHGs.

In other words, by limiting the scope of its review, the U.S. Supreme Court has effectively concluded (and affirmed) that EPA has the authority to regulate GHGs under the Clean Air Act, and that EPA's decision to do so was appropriate. The only questions the Court will review is simply how, when, and to what degree GHGs are to be regulated.

The Supreme Court granted certiorari to review the June 2012 unanimous per curiam panel opinion of the D.C. Circuit which affirmed each of the four rules underlying EPA's GHG regulatory regime. In that decision, the D.C. Circuit affirmed EPA's Endangerment Finding (that GHGs endanger health and human welfare) and "Tailpipe Rule" (establishing GHG emission limits for mobile sources, such as cars and trucks). Conversely, the D.C. Circuit declined to hear challenges on the "Tailoring Rule" (which modified Clean Air Act permitting criteria to exclude smaller sources of GHGs), and the "Timing Rule" (which commenced the regulation of GHG emissions from stationary sources through federal and state permitting programs) because the D.C. Circuit claimed that petitioners had not established standing to challenge the latter two rules.

Surprisingly, the Supreme Court's review appears limited to EPA's Timing Rule. In the Timing Rule, EPA concluded that it must regulate stationary sources (e.g., coal-fired power plants or generators at a hospitals/schools), once it had regulated mobile sources (under the Tailpipe Rule).

The Supreme Court is expected to hear oral arguments in early 2014. If the Supreme Court finds that EPA was not required or permitted to immediately regulate stationary sources, such a ruling would undermine: (1) EPA's current rules regulating stationary sources that trigger certain permitting thresholds and related Best Available Control Technology (BACT) review; (2) EPA's re-proposed rule which seeks to limit emissions of GHGs from new stationary sources under the New Source Performance Standards (NSPS), and (3) EPA's anticipated proposal to regulate GHGs from existing stationary sources under the NSPS. Whatever the outcome, however, today's limited grant of review indicates that EPA will be allowed to exert authority to regulate greenhouses gases from mobile sources and, ultimately, from stationary sources, although perhaps not on the timetable in which EPA currently plans to do so.



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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