U.S. SC sides with states, says EPA was ‘unreasonable’ to not consider cost

By Jessica Karmasek | Jun 29, 2015

The U.S. Supreme Court building in Washington, D.C.  

WASHINGTON (Legal Newsline) - The U.S. Supreme Court ruled Monday the Environmental Protection Agency “unreasonably” interpreted federal law when it deemed cost irrelevant to the decision to regulate power plants.

The Clean Air Act directs the EPA to regulate emissions of hazardous air pollutants from power plants if the agency finds regulation “appropriate and necessary.”

In Michigan v. EPA, the agency found power-plant regulation “appropriate” because the plants’ emissions pose risks to public health and the environment, and because controls capable of reducing these emissions were available.

The EPA found regulation “necessary” because the imposition of other CAA requirements did not eliminate those risks.

However, the agency refused to consider cost when making its decision -- even though it estimated that the cost of its regulations to power plants would be $9.6 billion a year.

The petitioners in the case, including 23 states, sought review of the EPA’s rule in the U.S. Court of Appeals for the D.C. Circuit. The D.C. Circuit upheld the agency’s decision not to consider cost.

The Supreme Court, in its 5-4 ruling, sided with the petitioners. Justice Antonin Scalia authored the court’s opinion. Chief Justice John Roberts and justices Anthony Kennedy, Clarence Thomas and Samuel Alito joined. Justice Elena Kagan filed a dissent, in which justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined.

“The agency must consider cost -- including, most importantly, cost of compliance -- before deciding whether regulation is appropriate and necessary,” Scalia wrote in the 15-page decision. “We need not and do not hold that the law unambiguously required the agency, when making this preliminary estimate, to conduct a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value.

“It will be up to the agency to decide (as always, within the limits of reasonable interpretation) how to account for cost.”

Thomas, who filed a separate concurring opinion, went even further.

“Although we hold today that EPA exceeded even the extremely permissive limits on agency power set by our precedents, we should be alarmed that it felt sufficiently emboldened by those precedents to make the bid for deference that it did here,” he wrote in his five-page opinion.

“As in other areas of our jurisprudence concerning administrative agencies, we seem to be straying further and further from the Constitution without so much as pausing to ask why. We should stop to consider that document before blithely giving the force of law to any other agency ‘interpretations’ of federal statutes.”

West Virginia Attorney General Patrick Morrisey, who was part of the bipartisan coalition of states, led by Michigan, said the ruling should serve as a “clear warning” to the EPA to stop violating the law.

“I am thrilled that, for the second year in a row, the Supreme Court agreed with my office’s argument that the EPA violated the Clean Air Act in imposing a costly regulation on the American people,” Morrisey said in a statement. “The Supreme Court’s ruling today that the EPA has no authority to ignore the costs of its regulation will have far-reaching consequences for the agency’s many other overly expensive rules, including those it plans to enact as part of its effort to cripple West Virginia coal.”

The attorney general said he hopes the agency finally heeds the warning.

He noted that just last month, the EPA put forward a rule that imposes federal control on local waters and farmlands, in clear violation of the Clean Water Act. And in the coming months it is slated to finalize its so-called Clean Power Plan, which will seek to impose requirements on states and coal-fired power plants.

“These rules will have devastating effects on coal miners, farmers, businesses and homeowners of West Virginia,” Morrisey said.

“If the EPA ignores the Supreme Court’s clear warning today and continues to press forward with these illegal, costly rules, my office will challenge those rules in court, and we intend to win -- again.”

West Virginia and the other states argued the agency improperly confined its focus to health and environmental risks, and ignored what it would cost the industry to comply with such a broad, new regulatory regime.

West Virginia’s governor, Earl Ray Tomblin, said he, too, is pleased with the high court’s ruling.

“As we have maintained for years, the Environmental Protection Agency far too often fails to consider the impact its mandates have on jobs and the economies of both our state and our nation,” he said, adding that he hopes it encourages those making these “unreasonable” decisions to reconsider their plans.

West Virginia’s Congressional delegation also came out in support of the court’s decision.

U.S. Sen. Shelley Moore Capito, a Republican, said the ruling confirms what they have long known in the state, but it may be too late for some.

“While today’s ruling is encouraging, many West Virginians have already suffered the effects of EPA’s misguided (Mercury and Air Toxics Standards) rule with job layoffs, numerous mine closures and electricity rate increases occurring throughout the state,” she said. “Going forward, states should not be forced to bear the brunt of other costly EPA regulations before legal challenges are complete.

“I will continue to work with my colleagues to advance policies that protect reliable and affordable energy, put jobs and our economy first and curb federal overreach.”

U.S. Rep. David McKinley, R-W.Va., called the court’s ruling an “important step” in protecting the economy. But, like Capito, he fears the decision came too late.

“This decision is a strong rebuke of the EPA’s overreach and will force the Obama Administration to consider the true costs to businesses and families of complying with these burdensome regulations,” he said.

“Unfortunately, the ruling is too late to stop the damage from this regulation and save the coal-fired power plants that have already been shut down.”

States and utilities considering complying with the agency’s other “economically destructive” regulations should take notice of the decision, McKinley said.

“The EPA should go back to the drawing board on ALL their costly regulations and ensure hardworking families are put ahead of their radical agenda,” he said.

Bill Raney, president of the West Virginia Coal Association, called the decision a “major win” for not only the coal industry, but also consumers.

“The West Virginia coal industry, its employees and the entire state of West Virginia have been particularly hard-hit by the impacts of EPA’s regulation which have spurred a massive closure of coal-fired power plants across the country,” he said. “Today’s decision is an important first step in reining in a clearly out of control bureaucratic agency that intends to implement its vision for America’s future regardless of Congressional intent, cost to the consumer, risk to electricity reliability and impacts to the nation’s coal mining regions.

“We are still reviewing the decision and its implications, but I think it’s fair to say that the Supreme Court handed down a decision for common sense and affordable energy today.”

The West Virginia Republican Party even chimed, calling the ruling a “counter-punch for common sense and the common man.”

“An unelected executive agency should not be able to destroy our industries by fiat,” Chairman Conrad Lucas said in a statement. “Today, thanks to courageous conservatives like our attorney general, Patrick Morrisey, we know that we can fight back against Obama and those who collaborated to elect him.

“The fight to save our coal jobs and get this state working again is a difficult one, and today is a battlefield win in a challenging war.”

Carrie Severino, chief counsel and policy director to the Judicial Crisis Network and former clerk to Justice Thomas, said it is never “appropriate” for a government agency to ignore the burdens that it creates on American businesses.

“This Administration will do anything to avoid considering the costs that its policies force upon the American economy,” she said.

“Today, the Court rejected the EPA’s attempts to superimpose its radical environmentalist agenda on the law.”

She pointed to Thomas’ opinion, saying the justice raises “important questions” about whether it is constitutionally appropriate to ever defer to an administrative agency under the separation of powers.

However, there are some who argue the court’s ruling is putting Americans’ lives at risk.

“The rule overturned by the majority today would have prevented 11,000 premature deaths every year,” Alliance for Justice President Nan Aron said in a statement. “Dirty air causes more hospitalizations and disease, and the EPA’s efforts to curb pollution have been scuttled by a conservative agenda that favors polluters over people.

“Once again, the Roberts Court majority has overreached, using a tortured interpretation of the law to put the interests of big business ahead of common sense and public health.”

To read the justices’ opinions, click here.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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