Big Win at U.S. Supreme Court

The attorneys at Kazmarek Mowrey Cloud Laseter were part of a team that recently obtained a significant victory at the U.S. Supreme Court. The case involved EPA’s greenhouse gas program, under which EPA claimed the authority to regulate sources under the Clean Air Act’s “Prevention of Significant Deterioration” and Title V permitting programs solely because of those sources’ emissions of GHGs. Numerous industry groups, represented by most of the major law firms in the United States, challenged EPA’s rule. KMCL, working for the Southeastern Legal Foundation and its clients, was privileged to be a part of that team.

The industry challenge asserted that EPA’s GHG regulatory scheme was plainly inconsistent with the Clean Air Act’s PSD and Title V provisions, a fact that EPA impliedly admitted when EPA acknowledged that it had to “tailor” numerous provisions of the statute. Within that broad scope of attack, each of the various industry petitioner groups had its own focus, with SLF’s emphasis, consistent with its mission, being on the constitutional and “rule of law” issues implicated by EPA’s program.

The Supreme Court agreed with essentially all of the industry arguments. Rejecting EPA’s excuse that “Massachusetts made me do it,” the Court held, “Massachusetts does not strip EPA of authority to exclude greenhouse gases from the class of regulable air pollutants under other parts of the Act where their inclusion would be inconsistent with the statutory scheme.” Apparently irked at the government position, the Court said, “It takes some cheek for EPA to insist that it cannot possibly give ‘air pollutant’ a reasonable, context-appropriate meaning in the PSD and Title V contexts when it has been doing precisely that for decades.” Indeed, not only was EPA’s vast GHG program not compelled by precedent, the Court held, it was not even permissible under ordinary principles of statutory construction. “Since, as we hold above, the statute does not compel EPA’s interpretation, it would be patently unreasonable—not to say outrageous—for EPA to insist on seizing expansive power that it admits the statute is not designed to grant.”

On the constitutional issue, we argued that EPA’s launch of a program that would be admittedly “unrecognizable to Congress” went far beyond a simple error of statutory interpretation. Such an action raised profound constitutional issues, infringing both the constitutional grant of legislative authority solely to Congress and the constitutional duty that the Executive Branch faithfully execute the law. The Court agreed on both counts. In fact, the Court essentially adopted the SLF position verbatim: “Were we to recognize the authority claimed by EPA in the Tailoring Rule, we would deal a severe blow to the Constitution’s separation of powers. Under our system of government, Congress makes laws and the President, acting at times through agencies like EPA, ‘faithfully execute[s]’ them.”

The Court did allow EPA to regulate GHG emissions from sources already subject to regulation, a point industry reluctantly acknowledged was a permissible interpretation. In terms of the volume of GHG emissions, that concession gave EPA authority over some major GHG sources, although the exact extent of that authority remains to be determined. But in terms of the sheer number of sources otherwise subject to EPA’s regulatory grasp, the vast majority of those sources are now free from the burdens of the PSD and Title V programs.

If you would like further information on the decision or how it may affect other challenges to government regulatory programs, please feel free to contact us.