The Center for Energy Science & Policy (CESP)

Analysis of West Virginia v. Environmental Protection Agency

By: J. Hunter VanDoren, GMU Student Contributor

In West Virginia v. Environmental Protection Agency, the Supreme Court heard the case for whether the EPA had the authority to implement a policy of generation shifting that would force power companies to reduce their reliance on fossil fuels by either transitioning to renewable resources, or participating in a cap-and-trade system. In an unprecedented move, the Court chose not to address whether this was a permissible interpretation of the EPA’s authority under the Clean Air Act and instead struck down the proposal based on the “major questions doctrine.” This new doctrine requires regulatory agencies to point to clear instruction from Congress on any matter of significant economic or political import, which functionally cripples many regulatory laws and policies currently in place and undermines Congress’ power to delegate authority to experts for real-time regulation.


Background

The Clean Air Act (CAA) (42 U.S.C. §§ 7401 et seq., 1970) has been lauded as an “unqualified success” – a rare example of environmental regulation that has consistently and definitively achieved its intended goals (Percival et al., 2021). Initially established in 1963 and restructured to better address the growing problem of air pollution in 1970, the CAA has reduced the combined emissions of six criteria pollutants by 74% in spite of a 160% increase in GDP and a 150% increase in vehicle miles traveled over the last 50 years (Percival et al., 2021).

After being compelled by the Supreme Court to issue a finding on whether CO2 contributes to global warming (Massachusetts v. EPA, 549 U.S. 497, 2007) – and therefore endangers human health –the EPA made an endangerment finding in 2009 and CO2 was added to the list of pollutants regulated by the CAA (Percival et al., 2021). The EPA’s regulation of CO2 has been repeatedly challenged since then, but the courts have historically sided with the EPA (Coalition for Responsible Regulation v. EPA, 684 F.3d 102 D.C. Cir., 2012; Utility Air Regulatory Group v. EPA, 573 U.S. 302, 2014) or refused to review the cases (Percival et al., 2021).

In 2015, the EPA proposed a new rule for regulating existing power plants under Section 111(d) of the CAA. This new rule, which would come to be known as the Clean Power Plan (CPP) (80 Fed. Reg. 64703), would take a “broader, forward-thinking approach to the design” not previously employed under Section 111(d). In addition to more traditional regulation in the form of required heat rate improvements, the CPP would enforce generation shifting – that is, coal-burning plants would have to reduce their production and convert to burning gas, and then ultimately to renewables, or else offset their emissions through a cap-and-trade system. This method was contentious for two reasons. First, the CPP went beyond requiring that existing plants operate in a cleanlier manner; it instead required that they operate less, if at all. Second, the CPP allegedly expanded the EPA’s authority from regulating individual plants, to regulating the composition of the energy grid.

The CPP never went into effect, however. Numerous legal challenges were filed against the plan, which were consolidated into West Virginia v. Environmental Protection Agency (WV v. EPA) (Percival et al., 2021). Before the case could be decided, President Trump took office and issued Executive Order 13,783, which directed his newly-appointed head of the EPA to reconsider the CPP. The EPA requested, and was granted, an abeyance of the litigation, and in 2019 it replaced the CPP with the Affordable Clean Energy Rule (ACE) (84 Fed Reg. 32520). In defense of this reversal, the EPA pointed to the “major questions doctrine” – a line of argument that claimed legal precedent for the court to “hesitate before concluding that Congress intended to house such sweeping authority in an ambiguous statutory provision” in “extraordinary” circumstances (FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159-160.; Utility Air Regulatory Group v. EPA (UARG) 573 U.S. 302, 324, 2014). This reasoning did not hold up in court, however, and in 2021 the D.C. Circuit Court vacated ACE because it “rested critically on a mistaken reading of the Clean Air Act” (American Lung Ass’n v. Environmental Protection Agency, 985 F.3d 914, D.C. Cir., 2021). Since the repeal of the CPP was imbedded in ACE, the court’s repeal of ACE effectively put the CPP back into effect. The EPA indicated at that time that it had no intention of reinstating the CPP, but since it failed to unequivocally indicate that it would not implement a new plan using the same procedures, the Court held that petitioners still had standing to pursue the newly-revived case of WV v. EPA (142 S. Ct. 894, 2022).

Court’s Decision

Justice Roberts delivered the court’s opinion, joined by justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett joined. As noted above, the Court first found that the case was justiciable despite the EPA’s stated intent to replace the CPP. The EPA would not or could not affirm, in unequivocal terms, that the injured parties would not face similar regulations under whatever rule replaced the CPP.

Regarding the question of whether the EPA had the authority to implement generation shifting under Section 111(d), the court ruled that the “major questions doctrine” applied in this case; since it was not clear that Congress had intended for the EPA to regulate the energy grid by enforcing generation shifting, the EPA was found to be acting outside the powers delegated to it by Congress, and the CPP was therefore rescinded.

The court relied upon several cases for precedent, including: National Federation of Independent Business v. Occupational Safety and Health Administration (595 U. S. ___, ___, per curiam, 2022), where the Court concluded OSHA could not mandate vaccination for the American workforce; Alabama Assn. of Realtors v. Department of Health and Human Servs. (594 U. S. ___, ___, per curiam, 2021), where the Court concluded the Center for Disease Control couldn’t institute an eviction moratorium in response to the COVID-19 pandemic; Utility Air Regulatory Group v. EPA (573 U. S. 302, 2014), where the Court concluded that the EPA could not construe the text of the CAA to include regulating “millions of small” sources that had traditionally fallen outside the purview of the Act; and Gonzales v. Oregon (546 U. S. 243, 2006), where the Court concluded that the Attorney General could not rescind the licenses of everyone who prescribed substances for assisted suicide in states where it was legal.

The key case in for establishing precedent was FDA v. Brown & Williamson Tobacco Corp. (529 U. S. 120, 160 (2000)). In this case, the Court concluded that the Food and Drug Administration (FDA) did not have the authority to regulate the tobacco industry. The FDA had long asserted itself that it did not have such authority. Tobacco was in no sense a pharmaceutical like the rest of the products the FDA oversaw, and it could also never be considered “safe” in the sense that other drugs regulated by the FDA had to be. In order to regulate tobacco, the FDA would have either had to alter their definition of safe, or ban the product outright – both options that the court balked at. And, Congress had notably already developed a distinct regulatory scheme wholly separate from the FDA for managing tobacco products – a clear indication that Congress did not intend for the FDA to oversee their regulation.

Justice Gorsuch further outlined the court’s definition of the major questions doctrine in a concurring opinion joined by justice Alito. He traced its history, in concept, to the 1980 decision in Industrial Union Dept., AFL-CIO v. American Petroleum Institute (448 U. S. 607, 645), in which the plurality found it “unreasonable to assume” the Congress had delegated significant power in the “absence of a clear mandate.” He established triggers for “exceptional” cases in which the doctrine applied – namely, in cases where an agencies’ actions are of “political significance,” or affect “a significant portion of the American Economy,” or “intrude into an area that is the particular domain of State law.” These conditions, he argues, are the triggers of the major questions doctrine. And in the case of a major question, the regulating agency must point to “clear Congressional Authorization” to justify their position.

The Court did not address the question of whether the EPA could impose regulations that go beyond improvements to performance at individual plants, determining that it had no occasion to make a decision on the matter in light of its judgement concerning the major questions doctrine.

Dissent

Justice Kagan opened her dissent, in which justices Breyer and Sotomayor joined, by declaring that “Today, the Court strips the Environmental Protection Agency (EPA) of the power Congress gave it.” She contends that what the court has really issued is an advisory opinion, rather than a judicial interpretation of the EPA’s authority. The term “major questions doctrine,” she points out, comes from the ACE repeal of the CPP – not from any precedent set by the Court. In all of the cases referenced in the majority opinion, Kagan points out that there was no special trigger based on politics or economics. Instead, a plain-text reading of the statutes found in each case that the actions in question were unsupported by the structure and intent of the statutes from which the agencies drew their authority.

The “reason to hesitate” in the key case of FDA v. Brown & Williamson was not the political or economic implications, but the question of whether the FDA should be given Chevron deference regarding its decision to designate tobacco as a controlled substance under its regulatory authority. In that case, the Court declined to defer to the EPA because the statutes Congress had written clearly precluded the FDA from regulating in the manner it proposed. The court expressly disclaimed reliance on a lack of authority within on Congress’ delegation, instead basing its decision on the fact that Congress had enacted separate laws directly regulating tobacco – which the FDA would have been in conflict with (529 U. S. 120, 160 (2000)). Therefore, Congress had made clear its intent that the FDA should not regulate tobacco, even though the FDA’s interpretation of their authority may have otherwise been permissible.

This case, Kagan argues, is entirely different form FDA v. Brown & Williamson and the other supposed precedents. In proposing a regulation on CO2, EPA was entirely within its area of expertise and in no way overstepping the clear text of the statutes as-written. The EPA’s proposal was not in conflict with any existing laws, and it pertained directly to the EPA’s delegated role of regulating air pollution. Under normal circumstances, the Court would grant Chevron deference for a permissible interpretation. But here, citing the “major questions doctrine,” the court applies a new standard between the two steps of Chevron deference (Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 1984). that posits the question of whether congress would have intended the agency to act in such a politically and economically impactful way. Kagan asserts that Congress has always used vague language in places where they intend for decisions to be made by the experts they have delegated the decision making to, and that this new doctrine threatens to strip that capacity away.


Analysis

As a casual observer unversed in law and unfamiliar with the case studies presented, I initially perceived the issue at play here as being largely semantic. The dissent claims that there’s no precedent for invoking the major questions doctrine, the majority rebuts with a litany of case studies purporting to show that the doctrine has long existed in concept, the dissent counters by arguing that those cases were all decided by plain-text reading of the statutes. To my untrained eye, it was easy to get lost in the exchange and feel like they were talking past each other. There was no debate that the case law, and especially the case of Brown & Williamson v. FDA, had been decided correctly and was applicable to this case. It wasn’t until reading back over the case, and particularly Justice Kagan’s dissent, that I understood the subtle but profound difference in the where the decision point lies within the judicial framework.

The majority isn’t arguing, as I initially assumed, that the EPA should be denied second- step Chevron deference because CPP isn’t a permissible interpretation of the EPA’s CAA authority. Nor are they arguing that the CPP fails the first Chevron test due to a contradiction with the clear language Congress used in the CAA. Instead, they are arguing that a decision must be made between those two steps, based on political and economic significance.

Despite their best attempts at justification, it seems clear that the case law justices Roberts and Gorsuch cited do not support such an approach. They present the major questions doctrine as if they only give a name to an existing practice, but that could only have been conceivably true if they were applying their significance tests as a part of step two Chevron deference by arguing that the agency was clearly acting outside its purview. As they have implemented it here, the test is turned on its head; in addition to requiring that the agency demonstrate that it isn’t clearly acting outside its jurisdiction, it requires the agency to demonstrate that it is clearly acting within its jurisdiction.

As Kagan pointed out in her dissent, the Court has long acknowledged that when Congress uses broad rather than specific terminology to delegate power, it knowingly does so to enable its delegates to use their expertise to tailor their approach based on their expert assessment of the latest evidence. This decision dismisses this longstanding precedent, developing a new standard for cases with significant political or economic impact – which, it could certainly be argued, is any major federal policy.

The burden of proof this new requirement demands for demonstrating clear Congressional intent is so high as to potentially hamstring existing laws and policies across numerous regulatory agencies. For as long as this ruling stands, Congress may be forced to write highly explicit and unnecessarily prescriptive statutes to ensure that their delegates are able to perform their basic duties. Besides being a massive administrative burden for Congress, it eliminates the flexibility that regulatory agencies have long relied on to react to problems in real time as new data and novel circumstances arise.

Conclusion

It is difficult – impossible, in truth – for me to reconcile the courts affirmation of the major questions doctrine as any more than the Court intentionally obstructing the federal regulatory agencies. In light of this and other miscarriages of justice by this Court (e.g. Dobbs v. Jackson Women’s Health Organization, 19-1392, 597 U.S. ___, (2022)), I can only conclude that the current Court has been stacked with justices content to impose their own policy and agenda as the law of the land. It is sombering and frankly terrifying to see the judicial branch, which I had long held to be the least partisan branch of our government, fall so far so quickly. The implications of this case will have longstanding ramifications for not only our air quality and environment, but for our country’s regulatory system as a whole for many years to come.

References


Percival, R. V., Schroeder, C. H., Miller, A. S., & Leape, J. P. (2021). Environmental Regulation: Law, Science, and Policy [Connected EBook with Study Center]. Wolters Kluwer Law & Business.

Image: U.S. News & World Report