AIR POLLUTION:

Obama rules face showdowns tomorrow in Supreme Court, D.C. Circuit

The Obama administration's efforts to clean up air pollution go on trial tomorrow, as the Supreme Court and a federal appeals court review two landmark rules from President Obama's first term.

In one of the most high-profile environmental cases of the Supreme Court term, the justices will consider U.S. EPA's 2011 rule for air pollution that drifts across states lines. The agency asked the court to take the case after the U.S. Court of Appeals for the District of Columbia Circuit struck the rule down in August 2012.

The D.C. Circuit, meanwhile, will hear a broad challenge from industry groups and several states to EPA's December 2011 mercury and air toxics standards for power plants.

"It's a very important day for EPA and also for the energy sector," said Jacob Hollinger of McDermott Will & Emery, a former EPA air attorney. "Both rules have important implications for power generation. It matters for everyone."

The Supreme Court case centers on EPA's implementation of the Clean Air Act's "good neighbor" provision, which allows the agency to regulate pollutants from one state that "contribute significantly" to violations of air standards in adjacent states for ozone-forming pollutants -- such as sulfur dioxide and nitrogen oxide -- and fine particles, or soot.

Many Eastern states -- including New York, Maryland and Connecticut -- suffer dirty air that drifts in from the Midwest. With the Supreme Court case highlighting the issue this week, eight Northeastern governors today also petitioned EPA to do more to crack down on pollution coming from Appalachia (see related story).

In July 2011, EPA issued the Cross-State Air Pollution Rule, or CSAPR, a regulatory regime that applies to 28 Eastern states. The regulations called for upwind states to cut emissions of ozone-forming gases by installing pollution controls or shutting down power plants.

However, determining where pollution comes from is a murky issue, and industry and several upwind states quickly challenged the regulations and the economic burden they would create.

EPA described in court documents its struggle to curb cross-state pollution.

"In short, at least in the eastern half of the United States," the agency wrote, "the interstate pollution problem is best understood as a dense, spaghetti-like matrix of overlapping upwind/downwind 'linkages' among many states, rather than a neater and more limited set of linkages among just a few."

EPA has been trying to address the issue since 1998, when it issued its first cross-state regulations. In 2005, the George W. Bush administration promulgated the Clean Air Interstate Rule, or CAIR, but the D.C. Circuit vacated that rule in a case brought by public health advocates, ruling that it did not do enough to protect public health. CAIR remains in place now during the current legal proceedings.

CSAPR is more stringent then the Bush-era program, and EPA estimates that when implemented it would prevent up to 34,000 premature deaths per year and provide $280 billion in annual health benefits.

David Marshall of the Clean Air Task Force, who represents the American Lung Association in the Supreme Court case, said the rule is sound and should be upheld. But even if the court rules against EPA, "it is important for the Supreme Court to provide legal framework for EPA" to create a cross-state rule that will hold up in court.

The court has extended arguments from the usual hour to 90 minutes, a sign of the case's importance and complexity. Justice Samuel Alito appears to be recused from the proceedings, so if the justices split 4-4, the D.C. Circuit's ruling striking down CSAPR will remain in place.

In a 2-1 opinion penned by conservative Judge Brett Kavanaugh, the D.C. Circuit held that EPA exceeded its authority by potentially requiring some states to reduce emissions by more than their "significant contribution" to other states' pollution. Kavanaugh also wrote that EPA circumvented states' authority to draft their own implementation plan, immediately skipping to a federal one (Greenwire, Aug. 21, 2012).

Most Supreme Court watchers will focus on Justice Anthony Kennedy, the panel's swing vote. If the court's four liberal justices back the agency, they'll need to persuade Kennedy to break ranks with the three remaining conservatives -- Chief Justice John Roberts and Justices Antonin Scalia and Clarence Thomas.

Richard Revesz of New York University's Institute for Policy Integrity, however, said that the case could produce a less traditional split.

"My prediction is the D.C. Circuit ruling will be reversed and would have been with Alito as well," Revesz said. "I don't think it's going to be one of those typical 5-4 or in this case 4-4 cases on ideological lines."

Mercury standards challenged

Down the street from the Supreme Court, the D.C. Circuit will hear two challenges to EPA's standards for mercury and other air toxics.

The first case, White Stallion Energy Center LLC v. EPA, represents a broad challenge to EPA's Mercury and Air Toxics Standards, or MATS, which were finalized in December 2012. The second, Utility Air Regulatory Group v. EPA, is narrowly tailored to EPA's New Source Performance Standards for particulate matter that EPA issued simultaneously.

MATS marked the first time EPA attempted to force coal- and oil-fired power plants to limit their emissions of pollutants like mercury, arsenic and other metals. The agency designed the standards to work in tandem with the cross-state regime at issue in the Supreme Court case. The standards would require many plants to install pollution controls and was a pillar of Obama's first-term environmental agenda.

EPA has called the standards "long overdue," noting that the agency concluded in 2000 that it was "appropriate and necessary" for the agency to take steps to limit emissions of mercury, a potent neurotoxin. EPA estimates the standards would prevent up to 11,000 premature deaths and provide up to $90 billion in health benefits per year.

John Suttles of the Southern Environmental Law Center said the rules were carefully crafted and should withstand the challenge.

"The record amply shows that EPA followed Congress' directions and the air toxics standards are firmly grounded in science," Suttles said.

However, the industry groups have claimed in court documents that EPA's rulemaking process was "substantively and procedurally flawed" (Greenwire, Oct. 24, 2012).

The same three-judge panel will hear both cases at the D.C. Circuit, and it comprises judges who have been active in environmental cases in recent years. Kavanaugh, who wrote the opinion in the cross-state rule now at the Supreme Court, will hear the case, as will Judge Judith Rogers.

Rogers, a Democratic appointee, also sat on the CSAPR panel. She voted to uphold the program and penned a forceful dissent to Kavanaugh's majority opinion.

The third panelist will be Chief Judge Merrick Garland, another Democratic appointee.

Reporter Jason Plautz contributed.

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