COURTS:

New lawsuits unlikely to touch EPA's carbon rule, at least in the near term

Correction appended.

U.S. EPA's proposed rule for power plant carbon has seen an early salvo of legal attacks, with one lawsuit launched by Ohio-based Murray Energy Corp. in June and a second, led by West Virginia and backed by 11 others states, last week. But with the rule still unformed, do these opponents have a target to aim at?

Probably not, according to legal experts contacted by ClimateWire. At least not yet.

"I'd characterize the Murray case as coming too soon, and the West Virginia case as coming too late," said Patrick Parenteau, a professor of environmental law at Vermont Law School.

The first suit, he said, is vulnerable because it takes direct aim at the Clean Power Plan (CPP), when in fact there is no final plan at all -- only a proposition that is likely to change as EPA reviews hundreds of thousands of comments from citizens and stakeholders. "You can't intercept an ongoing rulemaking and have the court reverse the rule," he said.

In its filing, Murray Energy argues -- as other industries have argued in other, previous cases -- that preparing for significant environmental regulation, regardless of the shape of the final rule, is costly enough to merit judicial review of the rule's legal basis. But in previous cases, courts have tended to side with the agency, allowing it to produce a finished product before opening it up to legal challenges.

"Courts generally don't like deciding cases they don't have to," said Michael Gerrard, a professor and director of climate law at the Columbia Law School.

As an example, he cited a case from 2012 in which Las Brisas Energy Center LLC attempted to sue EPA over an earlier draft of its power plant carbon rule, and on similar grounds. The U.S. Court of Appeals for the District of Columbia Circuit dismissed the motion as premature, he said.

The second lawsuit, led by West Virginia Attorney General Patrick Morrisey (R) and filed last Friday, circumvents the timing issue by looking beyond the CPP to an earlier case, New York v. EPA, that helped lay the foundations for EPA's current actions. That case resulted in a settlement with EPA agreeing to produce a plan to regulate carbon pollution according to an agreed-upon schedule.

Friday's lawsuit views the settlement as a "final agency action," and thus fair game for a challenge, said Parenteau. But whether or not the courts agree on that point is an open question, he added.

Litigation gets creative

Beyond the procedural hurdles confronting the two suits, there are "underlying, substantive arguments, and those may have merit," said Thomas Lorenzen, an environmental lawyer in Washington, D.C., who spent many years defending EPA on behalf of the Justice Department.

Both cases hinge on slightly different amendments -- described as "technical housekeeping provisions" by Dave Doniger, policy director of the Climate and Clean Air Program at the Natural Resources Defense Council -- to the Clean Air Act (CAA). The amendments were put forward by separate bills from the House and Senate but, in an oversight, both made it into the final CAA.

The difference between the two amendments is minor. The Senate version states that, under Section 111(d) of the CAA, EPA can establish emissions standards for pollution sources -- like power plants -- and pollutants, as long as those pollutants are not already covered in Section 112 of the CAA, which concerns hazardous air pollutants.

The House amendment varies only slightly, stating that EPA can regulate air pollutants and sources under Section 111(d) of the CAA but not if either of those categories is already covered by Section 112. In essence, according to the House amendment, if a power plant is already regulated for hazardous air pollutants like mercury, lead or manganese, it can't also be regulated for carbon dioxide.

Both amendments have been included in the Statutes at Large. But the latest batch of litigants has seized on language in a footnote to a recent Supreme Court decision to argue that it's the House interpretation that should be the law of the land.

In the 2011 case of American Electric Power v. Connecticut, the Supreme Court ruled that EPA's authority displaced federal common law in the regulation of greenhouse gas pollution. But in a one-line footnote to the court's decision, Justice Ruth Bader Ginsburg cited the House amendment without making note of the Senate's version or acknowledging the possibility of ambiguity between them.

A taste of arguments to come

If the court accepts this reading of the statute, it will force EPA to widely reinterpret its rule, said Lorenzen. Both coal- and gas-fired power plants -- which are regulated for mercury pollution under Section 112 of the CAA -- would be off the table as targets for the proposed rule, he said.

But while the argument between the amendments will inevitably be raised in future lawsuits, the chance of the D.C. Circuit Court entertaining such arguments now are slim, he said.

"What the Department of Justice and the EPA will say is that this particular issue wasn't briefed to the Supreme Court" in the AEP v. Connecticut case, he said. "It's quite possible that the Supreme Court wouldn't have even been aware that there was a competing amendment."

"This is a complicated issue, and not the sort of question to be resolved by a one-sentence footnote," he added.

Vermont's Parenteau concurred. "The footnote is dicta, and the subject wasn't at issue in the case," he said. "To take that as a justification to undercut the EPA's authority to regulate carbon from some of its largest-emitting sources is, I think, pretty strained logic."

But sooner or later, the discrepancy between the amendments is likely to rise again, said Columbia's Gerrard.

"The issue will clearly be litigated in the lawsuits that inevitably will be brought" against the CPP, he said. "We'll see it again."

The best case for EPA, he said, will be if the courts determine the amendments' meanings to be ambiguous -- and defer to the agency for its own interpretation.

Correction: An earlier version of this story confused the House and Senate amendments, and mentioned that both had been codified into law. While both appear in the Statutes at Large, their respective legal weight remains a matter of debate.

Email: nmassey@eenews.net

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