A federal court should take into account a case involving U.S. EPA's retroactive veto of a water permit for a mining project as it considers the legality of the Clean Power Plan, an opponent to the rule argued yesterday.
The Competitive Enterprise Institute told the U.S. Court of Appeals for the District of Columbia Circuit that the dissent in the water permit case "strongly supports" its arguments that EPA failed to adequately consider the costs and benefits of its power plant rule.
In a filing, CEI asked that the D.C. Circuit allow time for cost-benefit issues at upcoming oral arguments on the Clean Power Plan in September.
In the mining case, Arch Coal Inc. and its subsidiary, Mingo Logan Coal Co., had sought to overturn EPA's 2011 veto of the water permit for the controversial Spruce No. 1 mine in Logan County, W.Va.
Last week, the D.C. Circuit upheld the agency's withdrawal of the permit, finding that the agency adequately explained its decision and that the action fell under the "broad veto power" provided under the Clean Water Act (Greenwire, July 19).
While the D.C. Circuit sided with the Obama administration in the case, the Competitive Enterprise Institute yesterday argued that "the only judge to reach the cost-benefit issue" found that the permit should have been vacated.
Judge Brett Kavanaugh, an appointee of President George W. Bush, wrote in his dissent that EPA "must go back to the drawing board" on the water permit because its cost analysis was "one-sided."
"The bottom line is that EPA considered the benefits to animals of revoking the permit," Kavanaugh said, "but EPA never considered the costs to humans -- coal miners, Mingo Logan's shareholders, local businesses, and the like -- of revoking the permit."
In the majority opinion, Judge Karen LeCraft Henderson, appointed by President George H. W. Bush, found that Arch Coal forfeited its claims about costs, though, because the company had failed to raise the issue to either EPA or to a lower court.
But Henderson wrote that she agreed with Kavanaugh's conclusion that "reasoned decisionmaking requires assessing whether a proposed action would do more good than harm."
"Indeed, we do not quibble with his general premise -- and that of the many legal luminaries he cites -- that an agency should generally weigh the costs of its action against its benefits," Henderson wrote.
Unlike in the Mingo Logan case, CEI said, challengers to the Clean Power Plan haven't forfeited cost as an issue because they've raised concerns throughout the rule process.
"Petitioners have explicitly argued that EPA's cost-benefit analysis is invalid, identified specific costs that the Agency overlooked, and demonstrated quantitatively that the rule's domestic costs outweigh its domestic benefits," the filing says. "Mingo Logan strongly supports those arguments."
Some legal experts have also mined the Mingo Logan decision for clues as to how easy it would be for a Republican administration to overturn the Clean Power Plan if the program is eventually upheld by the courts.
In the case of Mingo Logan, the Obama administration reversed a decision made by the George W. Bush administration. Henderson found that EPA "plainly relied" on information about water-quality changes that became available after the permit was issued.
Brian Potts, a partner at Perkins Coie, said that the decision to uphold EPA's veto of the permit builds on prior court decisions that policies can be changed from one administration to the next, adding that it takes "some amount of work because you have to justify it."
"If you're going to change it for policy reasons, you're going to have to include some factual findings," Potts said. "This case does seem to pretty clearly say you can do it -- you just have to justify it, and the court's going to defer to your justification if there's a rational connection."
In her opinion, Henderson cited a 2009 decision on the Federal Communications Commission's policies on expletive language that found reversing a prior policy doesn't trigger a tougher standard of view.
Daniel Farber, a professor of law at the University of California, Berkeley, said that while he supports the Clean Power Plan, he believes a future EPA could meet the required standard to overturn the program issued under Section 111(d) of the Clean Air Act.
"Since the record includes the fact that the previous regulation was in effect and also evidence about the effect of that rule in the meantime," Farber said, "EPA would have to provide a reasoned explanation of its determination that Section 111(d) does not apply or does not allow regulations of the type chosen by EPA or that those regulations are otherwise inappropriate."
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