Supreme Court Limits Power of EPA, Regulatory Agencies for Greenhouse Gas Emissions

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The U.S. Supreme Court issued a long-anticipated ruling on June 30, 2022, regarding the authority of the U.S. Environmental Protection Agency (EPA) and other federal agencies to regulate greenhouse gas emissions from power plants. In the opinion, West Virginia et al. v. Environmental Protection Agency et al. (Case No. 20-1530), the Supreme Court ruled that EPA had exceeded the authority granted by Congress under the Clean Air Act in issuing limits on greenhouse gas emissions from power plants.

In a 6-3 opinion, with Justice Neil Gorsuch issuing a concurring opinion, the court determined that federal administrative agencies must point to "clear congressional authorization" when they claim the power to make decisions of "vast economic and political significance." The court concluded that EPA's power plant emissions regulations, originally undertaken under the Obama-era Clean Power Plan, involved such a "major question" and that EPA failed to demonstrate that Congress granted clear authorization to regulate greenhouse gas emissions from power plants.

The case is a continuation of a trend in recent years of the Supreme Court limiting the inherent authority of federal agencies to regulate matters absent specific Congressional authority. While the case did not directly address the "Chevron deference" doctrine, which is an administrative law principle that compels federal courts to defer to a federal agency's interpretation of an ambiguous or unclear statute that Congress delegated to the agency to administer, the ruling reinforced the court's skepticism of agency authority to regulate matters of national importance without a clear mandate from Congress.1

With slim majorities in the U.S. House of Representatives and Senate and a looming mid-term election, the case will likely impact the Biden Administration's climate change agenda.

Holland & Knight will continue to monitor developments and keep clients apprised of legal, regulatory and policy changes. 

Notes

1 See Chevron, U.S.A. v. Natural Res. Def. Council, 467 U.S. 837 (1984).

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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