EPA allies, challengers hunt for clues in Supreme Court decision

By Ellen M. Gilmer | 02/11/2016 08:15 AM EST

As the energy and environmental policy world moves beyond the shock factor of Tuesday’s stunning Supreme Court decision to freeze the Obama administration’s landmark Clean Power Plan, supporters, foes and outside experts are busy reading between the lines and staking out theories about the rule’s fate.

Chief among the points of speculation: whether the court’s decision foretells its ultimate leanings in the case, and what led swing vote Justice Anthony Kennedy to agree to a stay.

Key players in the historic litigation — which pits many states, utilities, coal producers and business groups against U.S. EPA, supporting states and environmental allies — were still largely engaged yesterday in a messaging war over the decision’s impact. While Clean Power Plan foes touted the enormous significance of the Supreme Court’s 5-4 decision to step in before a lower court has reviewed the rule, administration officials tried to downplay the stay as a preliminary, procedural measure.

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According to West Virginia Attorney General Patrick Morrisey (R), who led more than two dozen states in challenging the rule, the decision is a strong signal that the Supreme Court will ultimately overturn the plan, as part of the justices’ legal test for stay requests is whether the challengers would likely succeed in litigation on the underlying merits of the case.

"We doubt that the U.S. Supreme Court would have taken such an unprecedented action if they didn’t have serious legal concerns about the Clean Power Plan," he told reporters yesterday. "This is a very significant win in this case."

The merit arguments now go before a panel of judges for the U.S. Court of Appeals for the District of Columbia Circuit, with a decision expected later this year. The losing side is expected to appeal to the Supreme Court, so stakeholders are searching for clues about the justices’ positions on the broader arguments over the rule’s constitutionality.

"We recognize that the stay is not the final say on this matter," Morrisey added. "This is a case that has to get decided on the merits, but it’s much better to be in a position where the court believes you have a likelihood of success than in the other position."

EPA backers, meanwhile, favored a more limited reading of the decision’s impacts. Senior administration officials this week joined in acknowledging the unprecedented nature of the decision but maintained that the stay was merely a "temporary procedural determination" (EnergyWire, Feb. 10).

Vickie Patton, attorney for the intervenor group Environmental Defense Fund, cautioned against reading too much into the court’s decision, arguing that the "bare-bones," one-paragraph order did little to shed light on the justices’ reasoning.

"It’s really speculation and reading the tea leaves to try to discern why the Supreme Court did what it did for a number of reasons," she said yesterday during an American Bar Association panel discussion. "We don’t have a lower court opinion that was before the high court, so there’s really nothing we have to build from in understanding what the high court was reacting to. Similarly, the high court’s review was extraordinarily truncated."

The D.C. Circuit rejected challengers’ request for a stay three weeks ago. The challengers took their request to the Supreme Court days later, both sides filed briefs last week, and the court issued its brief order Tuesday evening.

West Virginia Solicitor General Elbert Lin, who is handling the litigation for his state, disagreed with Patton, countering that the tight timeline does not reflect sloppy jurisprudence from the court. He said it would be a mistake to "take the court’s decision too lightly."

"While we don’t have a written decision, what we do know is what the standard is," he said during the ABA event. "We know what the standard is, and we know that they granted the stay. Each side will read in that whatever’s in their best interest, but these are the facts."

Bracewell LLP attorney Jeff Holmstead, who is representing industry clients against the rule, said the court’s consideration of the standards is particularly significant because the court must find that the challengers meet all of the prongs, not just one. Those include whether challengers are likely to succeed on the merits, whether they would face irreparable harm without the stay and whether the "balance of equities" weighs in their favor.

"Obviously five justices decided they met that burden," Lin said.

Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito joined Kennedy in the decision, while Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan would have denied the stay request.

The Kennedy question

Legal experts are viewing Kennedy’s backing of the Supreme Court’s stay decision with cautious interest.

Appointed by President Reagan in 1988, Kennedy is a perennial swing vote for close decisions from the court, and ClearView Energy Partners LLC analyst Christi Tezak said the likelihood of him ruling against the Clean Power Plan in eventual merits litigation is far from certain.

That’s in part because Kennedy was the deciding vote in the Supreme Court’s landmark 2007 decision in Massachusetts v. EPA, in which the court ruled that greenhouse gases could be regulated under the Clean Air Act.

"Clearly he doesn’t seem to be opposed to the idea of regulating greenhouse gases, per se," Tezak said, adding that the breakdown of justices in the stay decision was not necessarily ideological. "It’s not like you’re looking up at the Supreme Court and there are five people who don’t think greenhouse gases should be regulated."

But Kennedy is often considered unpredictable in environmental cases. And with only a brief order from the full court, his legal reasoning this week is unknown — leaving lawyers involved in the case guessing which arguments will be most persuasive. What element of the Clean Power Plan is likely most troubling for the moderate justice?

Experts say states’ rights issues may be at play, as Kennedy has a history of prioritizing the sovereignty of state governments.

"The issue of EPA moving forward with a federal implementation plan if the states don’t submit a state implementation plan in September may well have been the catalyst," Tezak said.

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