Regulation:

Former EPA general counsel Martella discusses influence of court on EPA air rules

With an uptick in court activity relating to U.S. EPA regulations in the last year, what themes have emerged from the court on standing, challenges to rules and the level of discretion given to the agency? During today's OnPoint, Roger Martella, a partner at Sidley Austin and the former general counsel at EPA, explains why this year's activity is different from that of previous years. He discusses how challenges to rules and the review of cases have changed and weighs in on expectations for the court in the coming year.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Roger Martella, a partner at Sidley Austin and the former general counsel at U.S. EPA. Roger, great to have you on the show again.

Roger Martella: Thanks for having me back.

Monica Trauzzi: Roger, over the last 12 months we've seen an uptick in court activity relating to EPA regulations. Is this typical action or are there certain themes that have emerged through all these cases that sort of separate this year from others?

Roger Martella: The last 12 months have been kind of unusual and very important in terms of the level of activity of environmental issues in the courts and some of the significant decisions that have come out of the courts in the last 12 months. And I think there's really three key observations if we were to look back on this. One is it's really been the test of some of the major Obama EPA regulations, looking at the greenhouse gas rule, the CSAPR rule, some of the disputes with Texas. It took a couple of years for them to work themselves up to the court system, but we finally saw them presented to the courts in the last year or so and the courts addressing them. And, as we'll probably talk about, there's good news and bad news in there for both sides. Another interesting kind of trend over the last year has been the activity not of the Supreme Court, which is what we normally talk about, but of the Court of Appeals. The Court of Appeals have been particularly busy in addressing cutting-edge and precedent-setting environmental issues, the DC Circuit in particular. And while we normally are focused on the Supreme Court, clearly the DC Circuit and other courts of appeals have made significant environmental law this year. And then the third point, which I think is actually the most important, but perhaps the most subtle, is with the significant developments in the law, they haven't been so much substantive. We haven't seen a Massachusetts v. EPA that's expanding the Clean Air Act. Instead, they've been more procedural in terms of telling parties who can bring cases in court, how is the court going to look at those cases and what's the level of review the court is going to give to these decisions? So, at the end of the day, these decisions I think are going to really set the landscape for future review of environmental regulations down the road.

Monica Trauzzi: On that last point, it sounds like it's pretty significant sort of in the bigger picture, broader scope.

Roger Martella: I think that's right. Let's take one of those examples, for example, who can actually bring a challenge in court? And this goes to standing. Standing is one of the most important principles in the law. If you wanted to sue somebody, you would have to show that you're harmed by them, you can actually go to court and ask for an opinion. And this has always been a thorny question in environmental cases for decades. The DC Circuit issued for decisions in the last 18 months that have significantly addressed standing and, again, who can actually bring a challenge to an environmental regulation. A casual observer would look at these and say the court has made it significantly harder for industry in particular and trade associations to bring challenges to environmental regulations. And that could have long-standing precedent. I maybe take a bit more acute view. I'm not sure the courts necessarily lowered the universe or made the universe smaller of plaintiffs, but what it has done is increase the burden of proof as to demanding more evidence from someone, from you or someone who wants to challenge a rule, in terms of saying you have to prove to me, you have to satisfy that you are harmed. I'm going to make it harder for you to do so. So that's a very significant development. On the other hand, the courts made it easier for some groups too, and this is probably bad news for EPA. In the greenhouse gas decision the court has said you can challenge a rule that is maybe years or decades old if you haven't been harmed by it until recently. And so what this may do is open a floodgates of cases in future years where groups are going back and challenging years old or decades old regulations, because they're going to argue we're just being harmed by it for the first time and we can now go into court and bring suits.

Monica Trauzzi: So, what's the challenge has occurred, how is the court reviewing cases differently?

Roger Martella: I think one of the things we've seen from some of the cases where EPA has lost has been this -- the court, while maybe sympathetic with the environmental goals of EPA, scrutinizing where it believes EPA has brought a -- violated a procedure or the Clean Air Act. And Judge Kavanaugh in the recent CSAPR decisions said it very well. He said, "It is not our job to set environmental policy. Our limited, but important role, is to independently ensure that the agency stays within the boundaries that Congress has set." And this has been the theme of the five cases or so that EPA has lost, the CSAPR case, the Texas flexible permitting case, the Navistar case, Portland Cement and Summit Petroleum. The court is holding EPA accountable where it feels like it violated a procedural option, like it didn't give someone notice in comment, or it didn't stick to the text of the Clean Air Act and is not willing to give discretion in those cases.

Monica Trauzzi: But by proxy, aren't they essentially setting environmental policy?

Roger Martella: I think what the court is saying, we're not going to second-guess you on the policy. What we want to do though is make sure you're being very rigorous to the procedure. And the reverse side of that is kind of the third trend of this year, is something we knew before, but the court has really hammered hard this year, which is it's not going to sit there and second-guess the EPA when it comes to science and technical issues. The court made it very clear in the greenhouse gas case and the various NAAQS cases it considered this year in very strong language, that it's not going to sit as a trier fact, it's not going to second-guess the EPA when it comes to who is right in the science and who's wrong. What it's going to do instead is look at the process and the procedure that EPA followed. Is it sticking to the statutory standard and is this decisionmaking arbitrary?

Monica Trauzzi: So, taking all these themes under consideration, what are your expectations of what we might see from the court in the coming year? What are the cases that you're watching?

Roger Martella: I guess as we're heading into a pretty busy cycle, and this is very similar to the end of the Bush administration, which led into the seven cases in two years in the Supreme Court, in the DC Circuit we've already seen petitions filed on the MATS rule, the Mercury and Air Toxics Rule, and a very novel petition that's challenging the proposed new source performance standard for greenhouse gases. That's very unusual to challenge a proposed rule, but very strong arguments there that there's jurisdiction. So that will be very interesting to watch. Just recently, the DC Circuit said in the greenhouse gas cases it wants to hear EPA's response on whether it should take a harder look at those cases and perhaps reconsider them, so that's going to be busy through this fall. And then in terms of the Supreme Court, after a busy year in the Court of Appeals we can expect things to get busy in the Supreme Court. It's already taken one case involving runoff from forest roads in the Ninth Circuit. And between the greenhouse gas case, CSAPR, the E-15 decision, I would anticipate we'll see a busy year or two in the Supreme Court.

Monica Trauzzi: A lot for us to watch, for sure. We'll end it there. Thank you for coming on the show again.

Roger Martella: Thanks Monica.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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