Update on West Virginia v. EPA

Supreme Court Confines EPA Rulemaking on Climate Change, Recognizes Major Questions Doctrine Potentially Impacting Other Administrative Rulemaking – by Paul Sarahan, Bill Moore, and Rod Johnson

• United States Supreme Court found EPA’s Clean Power Plan unconstitutional because it exceeded the agency’s authority.
• The Court applied the “Major Question Doctrine” because of the political and economic significance of EPA’s rules.
• The Court determined that EPA’s approach attempted to extend its authority well beyond the scope of authority EPA had for years construed the statute to provide.
• Congress could not have meant for EPA to use that statutory provision to impose CO2 reduction rules of such consequence and magnitude, said the Court, unless Congress had enacted a clear statement of such authority.

On June 30, 2022, the United States Supreme Court concluded its most recent term with the issuance of its opinion in West Virginia v. EPA.  In this case, the Court considered whether the Environmental Protection Agency (EPA) acted within the power granted to it by Congress under the Clean Air Act when it promulgated rules regulating existing power plants to reduce carbon dioxide emissions in its effort to address climate change.  The challenged rules are commonly referred to as the Clean Power Plan, which sought to require three things: (1) “heat rate improvements” at coal-fired plants to burn coal more efficiently; (2) “generation shifting from higher-emitting to lower-emitting” producers of electricity; and (3) generation shifting from coal and gas-fired power plants to renewable energy generation alternatives, mainly wind and solar.[1]

The Court, in a 6-3 decision, held that the petitioners had standing to appeal even though EPA represented it does not intend to enforce the Clean Power Plan prior to promulgating and thus replacing the Clean Power Plan with a new rule.  The Court reasoned that “voluntary cessation does not moot a case unless it is absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.” Here, said the Court, the Government “nowhere suggests that if this litigation is resolved in its favor it will not” reimpose emissions limits predicated on generation shifting.

Substantively, the Court further held that Congress did not grant EPA in Section 111(d) of the Clean Air Act[2] the authority to devise emissions caps based on the generation shifting approach the EPA took in the Clean Power Plan.

The Court considered the substantive issue under the Major Questions Doctrine, a doctrine of recent vintage.  Stated succinctly, the Court found that it is not plausible that Congress meant Section 111(d) to give EPA authority to impose a carbon dioxide reduction mandate of “such magnitude and consequence,” especially since EPA had never before, in the long history of Section 111(d), asserted that the section confers upon the agency such authority.

The decision is interesting in large measure because of its application of, and Justice Gorsuch’s concurring opinion elucidating the Major Questions Doctrine.  That doctrine has served as a basis (although not always referenced as such) for the Court’s decisions in cases regarding the Food and Drug Administration’s authority to regulate or ban tobacco as a drug or device;[3] the Center for Disease Control’s authority to institute a nationwide eviction moratorium to address the COVID pandemic;[4] EPA’s authority to regulate greenhouse gases as “air pollutants” down to the level of private individuals and their homes;[5] the authority of the Attorney General of the United States to rescind the license of any physician who prescribed a controlled substance for assisted suicide;[6] and the Occupational Safety and Health Administration’s authority to mandate COVID vaccines or weekly medical testing in workplaces.[7]

In West Virginia, the Court explained its application of the doctrine to the EPA’s Clean Power Plan rules:

Under our precedents, this is a major questions case.  In arguing that Section 111(d) empowers it to substantially restructure the American energy market, EPA “claim[ed] to discover in a long-extant statute an unheralded power” representing a “transformative expansion in [its] regulatory authority.”  Utility Air, 573 U. S., at 324.  It located that newfound power in the vague language of an “ancillary provision[]” of the Act, Whitman, 531 U. S., at 468, one that was designed to function as a gap filler and had rarely been used in the preceding decades.  And the Agency’s discovery allowed it to adopt a regulatory program that Congress had conspicuously and repeatedly declined to enact itself.  Brown & Williamson, 529 U. S., at 159–160; Gonzales, 546 U.S., at 267–268; Alabama Assn., 594 U. S., at ___, ___ (slip op., at 2, 8). Given these circumstances, there is every reason to “hesitate before concluding that Congress” meant to confer on EPA the authority it claims under Section 111(d). Brown & Williamson, 529 U. S., at 159–160.”[8]

…

Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible “solution to the crisis of the day.”  New York v. United States, 505 U. S. 144, 187 (1992).  But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d).  A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.[9]

Justice Gorsuch, in his concurring opinion, provided more detail on the nature and framework of the Major Questions Doctrine.  He stated:

To resolve today’s case the Court invokes the major questions doctrine.  Under that doctrine’s terms, administrative agencies must be able to point to “‘clear congressional authorization’” when they claim the power to make decisions of vast “‘economic and political significance.’”[10]

…

One of the Judiciary’s most solemn duties is to ensure that acts of Congress are applied in accordance with the Constitution in the cases that come before us.  To help fulfill that duty, courts have developed certain “clear-statement” rules.  These rules assume that, absent a clear statement otherwise, Congress means for its laws to operate in congruence with the Constitution rather than test its bounds.  In this way, these clear-statement rules help courts “act as faithful agents of the Constitution.” A. Barrett, Substantive Canons and Faithful Agency, 90 B. U. L. Rev. 109, 169(2010) (Barrett).[11]

…

First, this Court has indicated that the doctrine applies when an agency claims the power to resolve a matter of great “political significance. … Second, this Court has said that an agency must point to clear congressional authorization when it seeks to regulate “‘a significant portion of the American economy,’” or require “billions of dollars in spending” by private persons or entities. … Third, this Court has said that the major questions doctrine may apply when an agency seeks to “intrud[e] into an area that is the particular domain of state law.”[12]

…

… [T]he question becomes what qualifies as a clear congressional statement authorizing an agency’s action. … First, courts must look to the legislative provisions on which the agency seeks to rely “‘with a view to their place in the overall statutory scheme.’” … Second, courts may examine the age and focus of the statute the agency invokes in relation to the problem the agency seeks to address. … Third, courts may examine the agency’s past interpretations of the relevant statute. … Fourth, skepticism may be merited when there is a mismatch between an agency’s challenged action and its congressionally assigned mission and expertise.[13]

This case is important, first in defining the scope of EPA’s authority to regulate power plants under Section 111(d) of the Clean Air Act.  The EPA, under both the Obama and Trump Administration, indicated that confining the regulation to “heat rate improvements” to burn coal more efficiently would result in only small reductions in carbon dioxide emissions,[14] reductions insufficient to address climate change.  As a consequence of West Virginia, if the federal government is to take effective steps to reign in carbon dioxide emissions, it now must be Congress who acts—EPA’s hands are now tied.

But perhaps most importantly, the case will be noted for its elucidation of the Major Questions Doctrine, most expressly set forth in Justice Gorsuch’s concurrence.  The doctrine is likely to be asserted in contesting federal agency rulemaking in a host of contexts, with challengers claiming that the rule or executive action has broad political or economic significance and the agency has exceeded the authority most plainly delegated to it by Congress.  Justice Gorsuch’s concurrence sets the stage and framework for these future cases, but they will be highly fact-specific, opening the door to the potential for outcome-oriented decision-making.

[1] See 80 Fed. Reg. 64662 (Oct. 23, 2015).

[2] See 42 U.S.C. § 7411(d).

[3] FDA v. Brown &Williamson Tobacco Corp., 529 U. S. 120, 159 (2000).

[4] Alabama Assn. of Realtors v. Department of Health and Human Servs., 594 U. S. ___, ___ (2021) (per curiam).

[5] Utility Air Regulatory Group v. EPA, 573 U. S. 302, 310 (2014).

[6] Gonzales v. Oregon, 546 U. S. 243, 267 (2006).

[7] National Federation of Independent Business v. Occupational Safety and Health Administration, 595 U. S. ___, ___ (2022) (per curiam).

[8] Opinion, at 20.

[9] Id., at 31.

[10] Concurrence, at 1, citing the Opinion, at 17, 19.

[11] Concurrence, at 2.

[12] Id., at 9-11, omitting citations.

[13] Id., at 13-15, omitting citations.

[14] Opinion, at 8, 12.