Both sides claim upper hand after ‘complete surprise’ from court

By Ellen M. Gilmer | 05/17/2016 07:30 AM EDT

Opposing sides in the monster litigation over the Obama administration’s signature climate rule are busy gaming out any strategic advantage of a federal court’s unexpected decision yesterday to delay oral arguments and arrange broader review.

Opposing sides in the monster litigation over the Obama administration’s signature climate rule are busy gaming out any strategic advantage of a federal court’s unexpected decision yesterday to delay oral arguments and arrange broader review.

The U.S. Court of Appeals for the District of Columbia Circuit yesterday announced that the battle over U.S. EPA’s Clean Power Plan will skip customary review by a three-judge panel in June and instead go before the full court in September. Consideration by all active judges — known as en banc review — is extremely rare at the D.C. Circuit, and the announcement took many litigants by surprise.

"I think this came as a complete surprise to everybody," said coal industry attorney Jeff Holmstead, who said his phone was flooded with the news as he got off an airplane yesterday. "I can’t think of another case where the full court has stepped in on its own before it even went to a panel. That’s pretty extraordinary."


The court’s move is another twist in a case that has defied the traditional legal track. With emergency requests streaming in from a swarm of states, utilities and other stakeholders, the Supreme Court made an unprecedented decision in February to step in and freeze the Clean Power Plan during D.C. Circuit review.

"When it comes to the Clean Power Plan, it is best to expect the unexpected," industry attorney Scott Segal said in an email.

Opponents of the plan to cut carbon emissions from the power sector say the court’s decision is evidence of judicial skepticism toward the rule. Segal, of the Electric Reliability Coordinating Council — an industry coalition that opposes the rule — noted that the bar for en banc review is high, requiring that a case be "a question of exceptional importance." Segal says the court’s move shows that the rule is well beyond EPA’s traditional powers.

"Supporters of the Rule have portrayed the case as essentially a garden-variety administrative law case that can be disposed of by simply citing to agency deference," he said. "It would appear the D.C. Circuit sees it differently."

Holmstead echoed that point, adding that the judges "recognize that this case is about novel issues."

"EPA has argued that this is just another Clean Air Act case," he told EnergyWire. "We know now that the Supreme Court doesn’t believe that and that the D.C. Circuit doesn’t believe it."

West Virginia Attorney General Patrick Morrisey (R), who is leading more than two dozen states in the legal challenge, tallied the D.C. Circuit’s announcement as another step toward victory, saying in a statement that it "confirms our long-held view that the Power Plan is an unprecedented and transformative rule of a kind the states have never seen from EPA."

EPA advantage?

But supporters of the rule see advantages in the new timeline. The development delays oral arguments until Sept. 27 but may accelerate the case’s path to the Supreme Court.

Attorney Sean Donahue, who is representing environmental groups supporting the Clean Power Plan, said the move reflected a pragmatic approach from the court, which likely would have been pressed to hear the case en banc after panel review anyway.

"Obviously we’re surprised at this point, but there’s a lot of logic to it given where and what the case is, and given the interest in resolving the whole case," he told EnergyWire. "This sort of skips a step, assuming that whoever did not prevail before the panel would at least try to get en banc review."

Natural Resources Defense Council attorney David Doniger agreed, noting that the court’s order "may well speed up final resolution of the case." Environmental Defense Fund attorney Tomás Carbonell said in a statement that faster resolution would help address "the urgent threat of climate change to the health and security of communities and families across our nation."

EPA maintained confidence that the court will uphold the rule whenever it hears the case.

"The Clean Power Plan fits squarely within the four corners of the Clean Air Act," spokeswoman Liz Purchia said in a statement. "We are confident we will prevail when the CPP has its day in court."

Party lines

Some backers of the Clean Power Plan were eager to point out the potentially favorable political balance of the D.C. Circuit.

Seven of the 11 active judges on the appellate court were appointed by Democrats — Presidents Obama and Clinton.

Two of those appointees did not take part in yesterday’s decision. Chief Judge Merrick Garland is not handling cases while he is being considered for a seat on the Supreme Court. Judge Nina Pillard also sat out of the decision, though that does not necessarily mean she won’t participate in the case this fall.

Even if both recuse themselves, the balance remains tilted toward the left, with five Democratic appointees and four Republican appointees.

John Hanger, an energy policy expert who supported Clean Power Plan compliance while working in the Gov. Tom Wolf (D) administration in Pennsylvania, said he is confident the case will break down on party lines.

"This issue unfortunately is politicized in two ways: It’s politicized on global warming, which has been politicized even in the judiciary," he said. "And EPA cases have become politicized within the judiciary."

Given that background, he said, the en banc review likely works in EPA’s favor.

"In terms of the full court, this is going to cement the likelihood that the Democratic appointees will carry the day," he said. "In that light, I think this is good news for the Clean Power Plan."

Dorsey & Whitney attorney James Rubin noted that the left wing of the court may present an advantage but that EPA will still have to make a convincing case.

"You could start gaming this out to try to figure out what’s better and what’s worse," he said. "Now, there’s still a distinct majority of Democrat-appointed judges on the court. At the same time, you still have to get a majority of them."

Coal industry lawyer Holmstead argued that, on party lines, the switch to en banc review still works out in the challengers’ favor. The panel assigned to hear the case included two Democratic appointees and one Republican. While the object then may have been to win over one of the two liberal-leaning judges, the object now is to bring over one of the five or more Democratic appointees expected to hear the full case — increasing challengers’ odds of success.

But both sides signaled confidence that their arguments would transcend political lines.

"I’m not sure it advantages one side or the other," Holmstead said. "I’m not convinced that it will break down on party lines."

Donahue, the environmental lawyer, made the same argument for his side.

"We think the rule is lawful, and we think the court will reach that result when they review the merits brief and the extensive record," he said. "We don’t think that will turn on party lines."

This story also appears in ClimateWire.