More than a dozen predominantly Republican-led states, coal companies and other industry groups today pressed federal judges to take the unusual step of blocking U.S. EPA from finalizing greenhouse gas standards for existing power plants.
The carbon limits, a critical component of President Obama's Clean Power Plan, would cut heat-trapping emissions by 30 percent from 2005 levels by 2030, shifting the country from coal-based power to renewables like wind and solar.
Challengers -- 15 states led by West Virginia and other potentially regulated parties led by Ohio-based Murray Energy Corp. -- are asking the U.S. Court of Appeals for the District of Columbia Circuit to issue an "extraordinary writ" to halt EPA in the rulemaking process.
In arguments that stretched beyond two hours in a packed courtroom, West Virginia Solicitor General Elbert Lin told the three-judge panel that EPA's public statements have made it clear the agency "has made up their mind" and will proceed with a final rule similar to the proposal, issued last summer.
Lin immediately ran into trouble with two members of the three-judge panel who aggressively pressed him on whether his lawsuit should be immediately dismissed because EPA has yet to finalize the rule.
Courts typically don't entertain challenges to rules before they are finished. Previous attempts to block EPA from finalizing greenhouse gas rules -- such as a 2012 bid to stop the agency from finalizing greenhouse gas rules for new power plants -- were quickly dismissed.
Judge Thomas Griffith, a Republican appointee, asked Lin whether there is "any case in which we have halted a proposed rulemaking."
"Why in the world would we resort to an extraordinary writ?" he asked, adding that the climate regulations seemed to be going through a "garden-variety rulemaking" process.
Judge Brett Kavanaugh, another Republican appointee, also seemed open to rejecting the case on those procedural grounds. He said the draft rule is "not that extraordinary" and that the final rule is typically "the dividing line between judicial review and waiting" for a court to act.
Lin countered that EPA has already directed states to start taking action in preparation for the rule.
Justice Department attorney Brian Lynk sought to drive home the judge's remarks, arguing that the challengers lack standing -- a legal procedural hurdle -- because they cannot show how a proposed regulation has injured them. Further, he said, they don't know how EPA may change the rule in response to millions of public comments submitted on the proposal.
"We don't know what a final rule will look like," he repeatedly said.
The third judge, Karen Henderson, another Republican appointee, seemed more open to the challengers on this point than her colleagues. She noted that one declaration provided in the case by a rural electricity provider said it would take up to four years just to prepare for the final rule.
"That's extraordinary," she said.
The arguments provided a preview of litigation to come if and when EPA finishes the rules this summer.
Focus on legislative 'glitch'
Primarily, the challengers argue that EPA lacks authority under the Clean Air Act to promulgate the rules.
The challengers' position boils down to a legislative "glitch" that occurred when Congress amended the Clean Air Act in 1990.
Technically, Congress passed -- and President George H.W. Bush signed -- two versions of the law's relevant section, 111(d). The challengers say the House version prohibits EPA from issuing regulations under that section for sources of pollution it has already regulated.
EPA issued air standards for mercury and other toxics spewed from power plant smokestacks in 2012, they contend, so the agency is prohibited from promulgating the greenhouse gas standards.
"The agency has simply taken this section," said Geoffrey Barnes of Squire Patton Boggs, representing Murray, "and attempted to create a scheme where Congress said it could not go."
EPA, with the backing of a dozen other states and environmental groups, offer several counterarguments. First, it noted that the other version of Section 111(d) -- the one that originated in the Senate -- says only that EPA cannot redundantly regulate a pollutant. That would allow its greenhouse gas proposal.
Most important, it emphasized that the two versions are ambiguous, and under the Supreme Court's landmark 1984 Chevron v. Natural Resources Defense Council, the agency deserves deference from the court in interpreting unclear statutory language.
It also contended that the challengers' reading of the House version is wrong because it would weaken EPA's authority under that section of the law when Congress' stated intent in the 1990 amendments was to strengthened EPA's regulatory authority.
The judges only need to decide this issue if they agree the challengers have cleared the initial threshold issue of challenging a proposed rule. But if they do reach the merits of the litigation, there was some indication that they were willing to defer to EPA.
The judges seemed intrigued today with "dueling amendments," with Griffith calling it a truly "unusual" situation.
Griffith pointed to the June 2014 Supreme Court decision in Scialabba v. Cuellar de Osorio, in which the court grappled with seemingly conflicting statutory language determining whether the children of immigrants seeking visas retain their spots assigned to them in the painfully long bureaucratic queue after they "age out" by turning 21.
One clause of that law seemed to clearly grant that benefit to all children of applicants, while the following clause seemed to significantly restrict it.
The court held that in such a situation, the agency should be afforded the deference established by Chevron (Greenwire, July 24, 2014).
Griffith said the Supreme Court's holding in Scialabba was applicable to the two versions of Section 111(d).
Referring to the Supreme Court, Griffith said, "They say this is a Chevron case."
DOJ attorney Amanda Shafer Berman agreed with that assessment. Primarily, she argued, the lawsuit is premature because EPA has not been given a chance to explain its legal rationale in the final rule.
If there is a "scintilla of a thread" of ambiguity, she said, EPA deserves the opportunity to interpret the statute.
"There's an inconsistency here," she said. "We have to look at both."
Is comment period a 'sham'?
EPA also faced some tough questioning that seemed to have been forecast by Harvard Law School professor Laurence Tribe, a former mentor to Obama who is representing coal giant Peabody Energy Corp. in the case (Greenwire, April 6).
Tribe said EPA's legal underpinnings for the rule -- its interpretation of Section 111(d) -- appears set.
The agency "is premising its actions on a view of the law that is not going to change," Tribe said. "One needn't wait to see whether the guillotine is going to drop."
Griffith picked up that idea and pressed EPA's attorneys about EPA Administrator Gina McCarthy's recent statements that the agency is moving forward with the proposal.
"What are we to do with statements that there will be no change?" Griffith asked, adding that such remarks could be turning the public comment period into a "sham."
Tribe also weighed in on the substantive issue regarding the dueling amendments. Under his reading, he said, there was no ambiguity between the two amendments, saying that there is "no incompatibility here," and EPA is prohibited from using the law as it is.
DOJ's Berman, however, called Tribe's assertions "flat-out wrong."
"If this isn't an ambiguity," she said, "I really think it begs the question, 'What is?'"
The states challenging the proposed standards are: Alabama, Alaska, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, West Virginia, Wyoming and Wisconsin. Several industry groups such as the Utility Air Regulatory Group also support blocking EPA from finalizing the rules.
EPA is backed by California, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington, as well as environmental groups like the Sierra Club.
Rulings in Murray Energy Corp. v. EPA and West Virginia v. EPA are expected later this year.
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