'Utility Regulatory Group v. EPA': U.S. Supreme Court Stops EPA's Rewrite Of The Clean Air Act

In its third encounter with greenhouse gas emissions in the context of the Clean Air Act, the United States Supreme Court, in Utility Air Regulatory Group v. EPA, No. 12-1146, 573 U.S. ____ (June 23, 2014) ("UARG"), reinforced bedrock separation of powers principles—not to mention conventional canons and settled principles of administrative law—by emphatically rejecting the claim of authority of the Environmental Protection Agency ("EPA" or "Agency") to rewrite indisputably unambiguous statutory language that not only disregarded the text and context of the statute, but that could have transformative, economic, social, and systemic impacts (if unchecked). Despite EPA's early and predictable declaration of victory for the decision, the Court's opinions suggest that the cascade of further greenhouse gas regulations triggered by the Court's earlier decision in Massachusetts v. EPA are likely to be vulnerable to legal challenge if they are incompatible with the Clean Air Act text or regulatory scheme. Indeed, UARG could be read as suggesting that nothing in Massachusetts v. EPA imposed a generalized and uncabined statutory obligation to regulate GHGs—potentially leaving room for a future presidential administration to move in a different direction than the current one.

Following the Supreme Court's decision in Massachusetts v. EPA, EPA promulgated regulations setting standards for emissions of greenhouse gases from new motor vehicles. EPA then took the position that these motor vehicle regulations automatically triggered Prevention of Significant Deterioration ("PSD") and Title V permitting requirements for stationary sources that emit greenhouse gases (the "Triggering Rule"). However, because regulating all sources with greenhouse gas emissions above statutory thresholds would make the mostly state-run programs unadministrable, EPA promulgated regulations "tailoring" the permitting requirements, such that, among other things, only sources with the potential to emit more than 100,000 tons per year would be subject to the greenhouse gas regulations (the "Tailoring Rule"). The United States Court of Appeals for the District of Columbia denied numerous challenges to EPA's actions. The D.C. Circuit held that EPA's interpretation of the PSD permitting program was compelled by statute and that the parties were without standing to challenge EPA's Tailoring Rule and Triggering Rule. The D.C. Circuit denied rehearing en banc.

The Decision

The Supreme Court granted six petitions for...