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Michigan v. EPA – Setting the Stage for The Clean Power Plan and WOTUS

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On June 28, 2015, the U.S. Supreme Court filed its 5-4 ruling on the challenge to US EPA Mercury Air Toxics (MATS) rule.  Michigan, et al. v. Environmental Protection Agency, et al., No. 14-46http://www.supremecourt.gov/opinions/14pdf/14-46_10n2.pdf.  In short the decision reverses and remands the lower court, Court of Appeals of the D.C. Circuit, decision determining it erred in deciding EPA was not required to consider costs when developing the MATS rule.  What actual relief this action provides to the power industry that is well on its way to meeting the final compliance date of April 2016 is very fact specific to each affected plant and its owner.   Also, the rule has not been vacated; it remains until further ruling by the lower court.

Many power plants have already shutdown in direct response to the MATS rule that was initially promulgated in 2012, after the announced 2000 study that concluded that regulation of coal and oil fired power plants was “appropriate and necessary.”   Three years into the development of a compliance strategy for the MATS rule with only months to go before the compliance deadline, leaves little left to manage.

What then have we gained from this exercise of jurisprudence?  The majority opinion written by Justice Scalia can be read to open a renewed discussion on what deference is appropriate for an administrative agency to assert it deserves.  The majority determined “EPA strayed well beyond the bounds of reasonable interpretation in concluding that cost is not a factor relevant to the appropriateness of regulating power plants.”  The majority reminds the reader that, “Not only must an agency’s decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational.” P. 6.  “EPA strayed far beyond those bounds when it read 7412(n)(1) to mean that it could ignore cost when deciding whether to regulate power plants.” P. 6.  The majority opinion recounts its previous decision on agency deference, Chevron v. NRDC, 467 U.S. 837 (1984),  that “allows agencies to choose among competing reasonable interpretations of a statute; it does not license interpretive gerrymanders under which an agency keeps parts of statutory context it likes while throwing away parts it does not.” P. 9.

But it is Justice Thomas’ concurrence that sharpens the issue, “I write separately to note that its request for deference raises serious questions about the constitutionality of our broader practice of deferring to agency interpretations of federal statutes.”  P. 1.  “What EPA claims for itself here is not the power to make political judgments in implementing Congress’ policies, nor even the power to make tradeoffs between competing policy goals set by Congress… It is the power to decide – without any particular fidelity to the text – which policy goals EPA wishes to pursue.” P. 4.  As the not- so-casual reader, my mind immediately turns to catalogue other EPA actions like the Clean Power Plan and the new definition of “Waters of the United States” which are based on policy goals EPA wishes to pursue, not Congress’ policies or more specifically the law.

The minority opinion written by Justice Kagan observes that with regard to the Chevron guidance, “. . .our decision here properly rests on something the majority thinks irrelevant:  an understanding of the full regulatory process relating to power plants and of EPA’s reasons for considering costs only after making its initial “appropriate and necessary” finding.” P. 9.  Noteworthy is the fact that the “Government concedes that if the Agency were to find that emissions from power plants do damage to human health, but that the technologies needed to eliminate those emissions do even more damage to human health, it would still deem the regulation appropriate.” See Tr of Oral Arg. 70.  One might reasonably surmise that EPA’s reasons for considering costs only after making the decision to regulate mercury from power plants is it did not want to engage in public review and comment on the issue of cost, because it would invite an assessment of reasonableness.

In conclusion, this ruling may actually result in significant impact on environmental policy as it is being advanced by EPA.

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