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By: Alec D. Tyra
On June 30, 2022, the Supreme Court issued its opinion in West Virginia v. EPA, invalidating the 2015 Clean Power Plan (CPP). Chief Justice John Roberts delivered the opinion of the court, holding that Section 111(d) of the Clean Air Act does not authorize EPA to devise emissions caps based on “generation shifting”—the approach EPA took in the CPP wherein power plants would be required to transition from higher-emitting (e.g., coal) to lower-emitting (e.g., natural-gas) to then even lower-emitting (e.g., wind and solar) electricity production.
The Majority Opinion of the Court
The government took the position that the Court need not even consider the merits of the case; because the EPA had informed the D.C. Circuit that it intended to replace the CPP rather than enforce it, the petitioners were not injured by the CPP and therefore lacked standing to challenge it. The majority rejected this argument, finding that EPA had confused the doctrines of “standing” and “mootness.” After finding that “mootness” was the proper doctrine in this case, the Court determined that the EPA had not demonstrated that this case was moot by simply informing the D.C. Circuit of its decision to not enforce the CPP. West Virginia and others remained injured by the CPP and had adequate standing to litigate the case.
The majority opinion defined the issue before it as “whether restructuring the Nation’s overall mix of electricity generation, to transition from 38% coal to 27% coal by 2030, can be the ‘best system of emission reduction’ within the meaning of Section 111.” The Court decided that this was one of the “extraordinary cases” that required application of the major questions doctrine, which it describes as “an identifiable body of law that has developed over a series of significant cases all addressing a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.” The doctrine applies in cases “in which the ‘history and the breadth of the authority that [the agency] has asserted,’ and the ‘economic and political significance of that assertion, provide a ‘reason to hesitate before concluding that Congress’ meant to confer such authority.” In major questions cases “something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to ‘clear congressional authorization’ for the power it claims.”
Three members of the court dissented. The dissent argued the text of Section 111 supports adoption of the CCP because a shift in energy sources fits within the phrase a “system for emissions reduction,” and that the majority had departed from the plain text. It further argued that even if the EPA had previously never asserted this level of authority under Section 111, it was not inconsistent with the EPA’s delegated authority. Congress grants broad authority to agencies expecting they will use it to respond to “new and big problems.”
What was Unsaid – Chevron Deference
The Court’s continued development of the “major questions doctrine,” is likely to have far-reaching implications for legal challenges to all administrative agency actions, including environmental regulations. What was striking about the Court’s opinion has much to do with what was left unsaid. The opinion of the Court makes no mention of its own prior precedence dealing with the doctrine of Chevron deference. The Dissent mentions it only four times. Chevron deference – named after the landmark case, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.- provides that courts should defer to an agency’s interpretation of an ambiguous statute. There are three steps in applying Chevron Deference. A preliminary step or “Step Zero” examines whether Congress intended agencies or courts to possess interpretive authority over a statute, which generally asks if the agency can create binding legal rules. If the agency cannot create legally binding rules, an agency’s interpretation is given Skidmore Deference. If the Agency can create legally binding rules, Courts’ move to Step 1.
Step 1 of Chevron is whether Congress expressed intent in the statute and whether that intent is ambiguous such that it requires interpretation from the Agency. The last Step – Step 2 – examines whether the Agency’s interpretation is reasonable.
One question after West Virginia is where the major questions Doctrine fits in the current precedents of administrative law. Does the major questions doctrine upend previous doctrines providing deference to agency interpretations? The Supreme Court and its conservative members have expressed dissatisfaction with the perceived power of the administrative state. Or is the major questions doctrine a new Step in the Chevron Framework? Future cases will reveal the full extent of West Virginia but what is certain is it is a shift in administrative law and regulations. The application of the major questions doctrine is likely to be prominently featured in challenges to new regulations addressing controversial issues.
Industries affected by new environmental regulations should consult with a lawyer regarding the application of major questions doctrine in challenging new or existing regulations.
For more information on this topic, please contact Alec D. Tyra or one of FMG’s environmental attorneys.