Observers: Without Scalia, Clean Power Plan's Odds Boosted

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By Anthony Adragna

Feb. 16 — The death of Supreme Court Justice Antonin Scalia immediately increases the odds the Environmental Protection Agency's Clean Power Plan survives judicial review, attorneys and other observers told Bloomberg BNA Feb. 16.

Having just eight justices on the high court will further raise the stakes for the regulation in the federal appeals court, because a 4-4 ideological split at the Supreme Court would result in the lower court's decision being upheld, multiple attorneys said. The rule's fate may also depend on whether a Democratic or Republican president subsequently selects Scalia's replacement.

But Scalia's death immediately removes one of the most skeptical justices of federal agency regulations and an expected vote against the EPA's rule. It also comes just days after the Supreme Court's five conservative justices, including Scalia, granted an unprecedented stay of the Clean Power Plan (West Virginia v. EPA, U.S., No. 15A773, order issued 2/9/16).

“It’s an amazing sequence of events,” Jody Freeman, a professor at Harvard Law School, told Bloomberg BNA. “The Clean Power Plan proponents got the news of the stay and then suddenly Justice Scalia died and everything turned upside down.”

Greater Stakes at D.C. Circuit

The high court vacancy will not have an immediate impact on the unfolding fight over the Clean Power Plan at the U.S. Court of Appeals for the District of Columbia Circuit, Thomas Lorenzen, a partner at Crowell & Moring LLP who represents the National Rural Electric Cooperative Association in the litigation, told Bloomberg BNA.

The Supreme Court's Feb. 9 surprise stay of the regulation will remain in effect. Oral arguments in the D.C. Circuit are slated June 2 before a panel of two Democratic appointees—Judges Judith Rogers and Sri Srinivasan—and Republican appointee Judge Karen LeCraft Henderson .

“Given that the D.C. Circuit panel has two Democratic appointees and the entire [D.C. Circuit] court, if it decides to hear the case, is very liberal leaning, EPA is poised for a win in the lower court,” Brian Potts, a partner at Foley & Lardner LLP who is not involved with the litigation, told Bloomberg BNA.

Most observers believe the panel favors EPA, but that whoever loses in the D.C. Circuit will ask the Supreme Court to review the EPA's regulation (RIN 2060-AR33) curbing carbon dioxide emissions from existing power plants (West Virginia v. EPA, D.D.C., No. 15-1363, order issued 1/21/16).

“After that, things get very interesting,” Lorenzen said. “We’re in really uncharted territory here. No one knows how this will play out.”

Many Scenarios Possible

One factor that could impact the case is whether Senate Republicans follow through on their threat not to consider anyone President Barack Obama nominates to the Supreme Court during the remainder of his presidency. Such a result might leave the high court without a ninth justice well into 2017, when the Clean Power Plan would be ready for consideration.

Were the regulation to survive scrutiny at the D.C. Circuit—and assuming an eight-justice Supreme Court then agreed to hear an appeal—a 4-4 split Supreme Court would leave it in place. If the federal appeals court instead struck it down, a divided high court would leave the regulation overturned.

“Before Justice Scalia's death, it was hard to see how it mattered very much what the D.C. Circuit decided about the Clean Power Plan,” Philip Wallach, a senior fellow at the Brookings Institution, said in an e-mail. “Now there is at least an outside possibility that an eight-member Supreme Court could split on the law's legality, leaving the D.C. Circuit's opinion as the effective judgment. That means the proceedings in the D.C. Circuit later this year will take on a much greater importance.”

If an Obama or a nominee appointed by a future Democratic president made it onto the court, that justice could provide a crucial fifth vote to uphold the regulation, attorneys said. A Republican appointee might keep the current court balance that was seen as likely to overturn the regulation.

“I think people took the signal from the stay that was issued by the Supreme Court that at least five on the court were inclined to be skeptical of the agency’s legal basis for the rule,” Jonathan Cannon, law professor at the University of Virginia and former EPA general counsel, told Bloomberg BNA. “Since Justice Scalia was one of the five, his absence from the court will throw the issue into greater uncertainty until we have an appointee.”

Political Vulnerability Seen for Republicans

Beyond the impact to ongoing litigation, Scalia's death and the apparent unwillingness from Senate Republicans to consider a replacement will likely help a elect a Democratic president willing to appoint a justice favorable to the Clean Power Plan, Paul Bledsoe, a former White House energy aide under Democrat Bill Clinton, said.

“I believe that the Democratic nominee should press climate change as a profound electoral vulnerability for Republicans in the general election, including the near certitude a Republican president would undermine the Obama regulatory actions to curb emissions,” Bledsoe, now an independent energy consultant, told Bloomberg BNA. “The chances that the Clean Power Plan will be upheld were just greatly increased for both technical legal reasons and the changed political dynamic.”

Speculation was already rampant within legal circles about whom Obama might pick to the fill the vacancy. One intriguing option is Srinivasan, who sits on the D.C. Circuit panel slated to consider the Clean Power Plan and cleared the Senate in May 2013 on a 97-0 vote.

Attorneys doubted whether any Obama nominee could make it through the confirmation process in 2016, but Lorenzen called Srinivasan a “brilliant and capable judge.” Bledsoe said Srinivasan's qualifications and broad support would make him an excellent choice by the White House.

“I think it makes sense for the president to pick someone who under any normal circumstances who would be easily confirmed,” Bledsoe said. “That would put maximum pressure on Republicans and highlight their stonewalling.”

Industry Remains Confident

Industry groups and attorneys opposing the regulation said the rule remained in trouble due to significant legal vulnerabilities and urged states to stop efforts to comply with it pending the completion of all legal challenges.

“Despite the tragic passing of Justice Scalia, this unlawful regulation remains very much in jeopardy,” Chris Warren, a spokesman for the American Energy Alliance, told Bloomberg BNA. “The fact remains that the best way for state leaders to protect citizens from this rule and higher electricity rates is by immediately stopping all work on compliance plans, at least until the legal challenges are resolved.”

Two states—Michigan and Wisconsin—did just that by announcing they would suspend compliance efforts pending the resolution of legal challenges. Gov. Scott Walker (R-Wis.) issued a Feb. 15 executive order suspending planning activities, while Michigan did so in a Feb. 16 press release. Alabama has previously announced it would halt its compliance efforts as states processed the implications of the Supreme Court's stay order.

With assistance from Rebecca Wilhelm in Washington

To contact the reporter on this story: Anthony Adragna in Washington at aadragna@bna.com

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