SUPREME COURT:

Justices to consider review of EPA greenhouse gas rules

In what could become a marquee environmental case of the Supreme Court's next term, the justices on Monday are expected to consider reviewing a lower court ruling that upheld U.S. EPA's regulations to reduce heat-trapping gases.

Nine petitions are asking the court to reverse aspects of an appellate court's June 2012 ruling that backed EPA's first rules following the Supreme Court's landmark Massachusetts v. EPA decision, which instructed the agency to regulate greenhouse gases as harmful pollutants under the Clean Air Act.

Some prominent environmental lawyers believe the court will grant certiorari to -- or agree to review -- some part of the petitions. The decision could come as early as Tuesday, less than two weeks after the Obama administration proposed regulations to cut greenhouse gas emissions at new power plants.

Richard Lazarus, an environmental law professor at Harvard Law School, wrote recently that "the odds of a cert. grant remain significant, mostly because of ... superficial trappings of cert.-worthiness."

Writing in the nonpartisan Environmental Law Institute's Environmental Forum, Lazarus said the number of petitions is unusually high and more than 80 interested parties are asking the high court to take the case.

He also pointed out that 17 states have signed onto the effort, a significant number considering that the dozen states that supported greenhouse gas regulation in 2007 played an important role in persuading the high court to review Massachusetts v. EPA.

Taking the case would also continue a trend at the Supreme Court away from water cases and toward air litigation. Some court watchers suggested that the court was more likely to grant a greenhouse gas petition, since it fulfilled public health advocates and EPA's request to review the D.C. Circuit's decision last year vacating EPA's rule for air pollution that drifts across state boundaries, the Cross-State Air Pollution Rule, or CSAPR (Greenwire, June 24).

Moreover, it only takes the votes of four justices to grant a case, and the four justices who dissented in Massachusetts v. EPA, Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito, are still on the bench.

Those four justices may think it's time to look at how EPA has implemented Massachusetts v. EPA in the six years since the decision, said Roger Martella of Sidley Austin, who was EPA's general counsel during the 2007 case.

"To some extent, the time is ripe," Martella, who is representing the National Association of Manufacturers in the litigation, said at a recent panel discussion hosted by George Mason University School of Law.

"This case is coming at a time when the Supreme Court may want to look back and say, 'We decided Massachusetts v. EPA; how has EPA interpreted that decision?'"

ACC petition seen as key

The petitions range from challenging specific aspects of EPA's greenhouse regulations to challenging the agency's major decisions underpinning the entire program.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit unanimously upheld EPA's finding that greenhouse gases endanger public health, as well as the agency's "tailpipe" rule for cars and light-duty trucks and "timing" and "tailoring" rules, which deal with when and how greenhouse gas standards apply to stationary sources (Greenwire, June 26, 2012).

The petitions almost uniformly cite broad economic impacts of the rule before diving into more specific criticisms. The Chamber of Commerce, for example, challenges the endangerment finding itself. Texas, with the backing of several other states, has asked the court to reconsider Massachusetts v. EPA in light of "absurd" permitting burdens that resulted from EPA's regulations. Others question the D.C. Circuit's ruling that industry groups lacked standing to challenge the regulations, meaning they did not prove they were directly injured by the rules.

But one petition -- from the American Chemistry Council -- has caught the attention of court watchers as perhaps the most likely to be granted.

ACC is asking the court to consider whether EPA misinterpreted the Clean Air Act by requiring new or modified stationary sources to obtain Prevention of Significant Deterioration, or PSD, permits for greenhouse gases.

Thomas Lorenzen, a former assistant chief of the Department of Justice's Environment and Natural Resources Division, said EPA's problem is that the Clean Air Act clearly says PSD permits -- which set emissions limits and other criteria for facilities -- specifically apply to National Ambient Air Quality Standard, or NAAQS, pollutants.

The Clean Air Act, written long before EPA sought to address climate change, doesn't include carbon or greenhouse gases as NAAQS pollutants, and the D.C. Circuit simply deferred to EPA's interpretation.

"The argument that has the most credence of all the petitions is the one that questions whether or not PSD in fact applies when there is no NAAQS, which there isn't for carbon," said Lorenzen, who's now a partner at Dorsey & Whitney. "Here you have a substantive issue that could address a lot of industry's concerns and that has not yet been addressed by the Supreme Court."

Lorenzen added that even if the court grants review of that narrow issue, it might not undercut EPA's entire permitting program for stationary sources. The agency, he said, could turn to other authority within the Clean Air Act, such as New Source Performance Standards, or NSPS, if the court throws out the PSD program.

Lazarus, of Harvard, echoed that argument.

"A grant on a narrow question such as whether GHG emissions can trigger regulation under the Clean Air Act's [PSD] Program would not be welcome news to EPA," he wrote, "but neither would it seriously threaten the agency's ongoing efforts."

'The most stark thing'

If they grant review, however, the justices may have difficulty in keeping the case to narrow grounds, other environmental law professors said.

Amanda Leiter, a professor at American University's Washington College of Law and a former Supreme Court clerk, said the case has many moving parts that are all connected.

"Once they grant the case," Leiter said, "it's going to be hard for them not to grant it quite broadly."

Leiter added, though, that she doesn't think the court will want to broadly revisit all the issues in Massachusetts v. EPA.

Any grant would likely send a strong message to EPA, which just rolled out its proposed greenhouse gas air standards for new power plants last week. The proposed regulations are expected to be the first of several from the Obama administration to address global warming, and the Supreme Court petitions have the potential to undercut the entire program.

If the court takes the case, Leiter said, it may make EPA less eager to move forward with more rules until the case is resolved.

"That would be the most stark thing," Leiter said. "If the court granted cert and overturned or narrowed Massachusetts v. EPA, then suddenly EPA has no authority, or its authority is much less clear to regulate in this area."

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