Supreme Court Strikes Down EPA's Mercury And Air Toxics Standard

Delivering a sharp blow to President Obama's efforts to regulate coal plants, the U.S. Supreme Court invalidated the Environmental Protection Agency's (EPA's) 2012 Mercury and Air Toxics Standards (MATS) rule, finding that the agency improperly failed to consider compliance costs in determining that the regulation of coal- and oil-fired power plants was “appropriate and necessary” under the Section 112 of the Clean Air Act, 42 U.S.C. § 7412(n)(1)(A).

In a 5-4 opinion by Justice Scalia, the Supreme Court held in Michigan v. EPA, No. 14-46 (June 29, 2015), that the EPA's decision not to consider costs when determining that regulation of power plants under the hazardous-air-pollutants program was “appropriate and necessary” was an unreasonable interpretation of those statutory terms. The court refused to grant Chevron deference to the EPA's interpretation, finding that the agency had strayed beyond the bounds of reasonable interpretation “when it read §7412(n)(1) to mean that it could ignore cost when deciding whether to regulate power plants.” Slip. op. at 6.

In refuting the EPA's position, the court distinguished this case from Whitman v. American Trucking Ass'n, 531 U.S. 457 (2001) by focusing on the differences in the statutory language at issue. American Trucking, explained the court, held that a requirement to consider cost cannot be implicitly read into a statute. Slip op. at 10.

That said, the court opined, the termappropriate and necessary is afar more comprehensive criterion than 'requisite to protect the public health'; read fairly and in context, as we have explained, the term plainly subsumes consideration of cost. Id. The court added that Congress's separate treatment of power plants in requiring EPA to conduct a study prior to regulation, as well as the explicit mention of costs in later subsections of the same section, indicated that a cost consideration was clearly...