Supreme Court Halts Clean Power Plan in Blow to Obama

Energy and Climate Report provides current, thorough coverage of clean energy, efficiency, and climate change legislation, regulation, policy, legal developments, and trends in the U.S. and...

By Andrew Childers and Anthony Adragna

The U.S. Supreme Court Feb. 9 took the unusual step of blocking the Environmental Protection Agency's Clean Power Plan even before the rule has been argued before an appellate court, casting doubt on the viability of the carbon dioxide standards for power plants.

The court ordered that the Clean Power Plan, President Barack Obama's signature domestic action on climate change, be halted until the case can be heard by the U.S. Court of Appeals for the District of Columbia Circuit and through any subsequent Supreme Court consideration.

The D.C. Circuit has scheduled argument in lawsuits brought by 27 states and several utility industry groups opposed to the rule for June 2, with the possibility for additional argument June 3 (West Virginia v. EPA, D.C., No. 15-1363, order issued 1/21/16).

The Supreme Court's five Republican appointees all voted in favor of the stay, while the justices appointed by Democratic presidents opposed the petitions.

“We are thrilled that the Supreme Court realized the rule's immediate impact and froze its implementation, protecting workers and saving countless dollars as our fight against its legality continues,” West Virginia Attorney General Patrick Morrisey, who has led the states fighting the rule, said in a Feb. 9 statement.

EPA officials could not be reached for comment.

Rule at Risk, Observers Say

Attorneys said the Supreme Court's unusual decision indicates the EPA's rule could be in jeopardy as it heads to the courts.

Brain Potts, a partner at Foley & Lardner LLP, who is not involved in the litigation, said he was “shocked” that the court granted the stay.

“The fact that [Justice Anthony] Kennedy and [Chief Justice John] Roberts agreed to stay the rule is a huge signal that the court might ultimately overturn it,” he told Bloomberg BNA in an e-mail.

Scott Segal, a partner in Bracewell LLP's Policy Resolution Group, also said the court's decision indicates the rule may not survive judicial scrutiny.

“Should the D.C. Circuit uphold the rule, I think the stay is indicative that the court is likely to want to hear this case,” he told Bloomberg BNA. “Even the most ardent supporters would have to concede that this does not bode well for the current rule.”

Among the court's criteria for granting the stay are demonstrating that allowing the rule to go into effect during litigation would impose immediate and irreparable harms and that petitioners are likely to prevail on the merits of their arguments. States and utilities had argued that even though the carbon dioxide reductions do not take effect until 2022, they must begin expending resources and begin making business decisions now in order for states to submit their initial compliance plans to the EPA by Sept. 6.

Supreme Court Briefs

In briefs to the Supreme Court last week, states had argued that the EPA's rule flew in the face of recent decisions by the high court on the limits of its Clean Air Act authority.

They had argued that the Clean Power Plan litigation could mirror legal battles over the EPA's Mercury and Air Toxics Standards for power plants where the Supreme Court found the agency had erred when it failed to consider compliance costs for utilities when determining whether it was appropriate and necessary to regulate toxic pollutants from power plants.

Though the rule was ultimately remanded to the EPA for an updated cost and benefit analysis, utilities had already made the investments necessary to either install new pollution controls or close aging coal-fired power plants

Richard Revesz, director of the Institute of Policy Integrity at New York University School of Law, which had supported the EPA's efforts, told Bloomberg BNA Feb. 9 the court's decision should not be read as an indication of how it might decide the case on the merits later on.

“They [the justices] think that this is a serious case and there is a sufficient probability of harm for the parties seeking the stay to merit doing this,” Revesz said. “But it doesn't mean the five justices have decided to strike down the rule—it doesn't mean that at all.”

“This was always going to be a difficult case—that's why it's being litigated vigorously,” he said.

Environmental Groups Argue Rule Still Viable

Despite the Supreme Court's highly unusual intervention in the litigation, environmental advocates continued to argue that the Clean Power Plan is firmly grounded in the EPA's existing Clean Air Act authority and would ultimately be upheld.

“The Clean Power Plan has a firm anchor in our nation's clean air laws and a strong scientific record, and we look forward to presenting our case on the merits in the courts,” Vickie Patton, general counsel for the Environmental Defense Fund, which has joined the EPA in defense of the rule, said in a Feb. 9 statement.

David Doniger, director of the climate and clean air program at the Natural Resources Defense Council, said the court's stay should not stop states from working toward compliance with the rule.

“Smart industry, financial and governmental leaders will not count the Clean Power Plan out and will keep moving to incorporate strategies and public policies leading toward a clean energy economy,” he said in a Feb. 9 statement.

Opponents of the Clean Power Plan had sought a stay from the Supreme Court after the D.C. Circuit rejected a similar request. Rather than halt the rule, the appellate court had agreed to expedited briefing format that would see the case argued by this summer with a decision possible before the Sept. 6 deadline for states to submit their initial compliance plans.

That deadline is now effectively moot with the Supreme Court halting the Clean Power Plan until all litigation can be resolved.

To contact the reporter on this story: Andrew Childers in Washington at achilders@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com