In response to an EPA petition, the U.S. Supreme Court agreed to rule on the legality of the Agency’s July 2011 Cross State Air Pollution Rule (CSAPR).  Specifically, the justices will review an August 2012 opinion in which a panel of the U.S. Court of Appeals for the D.C. Circuit voted 2-1 to vacate the CSAPR for the two reasons described below. 

The CSAPR was written by the Obama EPA to replace a G.W. Bush action, the Clean Air Interstate Rule (CAIR).  Both actions were intended to address air pollution from upwind states that travels into downwind states, making it virtually impossible for some downwind areas to meet their air quality obligations under the Clean Air Act (CAA).

2-1 opinion

The CSAPR was challenged by an assortment of power companies, coal companies, labor unions, trade associations, and local governments.  In the majority opinion (EME Homer City Generation v. EPA), the D.C. Circuit panel said it found the following flaws with the Obama EPA’s approach to controlling interstate air pollution. 

First, the court said the EPA exceeded the CAA’s direction that only “significant contributions” from upwind states may be subject to federal regulation.  The court agreed with petitioners who stated that the CSAPR does address those significant contributions, but then the CSAPR goes on to require that upwind states control nonsignificant pollution.  The EPA had argued that it was merely requiring that states compel major sources of air pollution to install air pollution controls that are cost effective.  But the petitioners said that this was EPA’s backdoor attempt to force control of pollution that would never reach downwind states.  The D.C. Circuit was persuaded by this argument.

Second, the petitioners claimed that the EPA violated the CAA by not providing the states with the first opportunity to address interstate air pollution through the state implementation plan (SIP) process.  Instead, the EPA promulgated a federal implementation plan (FIP) simultaneously with the CSAPR.  The FIP required power plants in covered upwind states to make the SO2 and NOx reductions needed to satisfy each state’s emissions budget, as defined by the EPA.  The FIP also created an interstate emissions allowance trading program.  Much of EPA’s argument was based in the contention that upwind states have historically delayed undertaking actions to control transported air pollution, and this delay necessitated the development of an FIP.  But the majority insisted that the FIP unlawfully displaced the rights of states to develop individual approaches to meeting emissions standards. 

The D.C. Circuit directed the EPA to continue to implement the CAIR until a suitable replacement was developed.  The dissenting judge in the case mounted a long and vigorous defense of the CSAPR, which the EPA relied on extensively in writing its petition for a writ of certiorari.

Three questions

The EPA asked the high court to consider three questions:

• Whether the court of appeals lacked jurisdiction to consider the challenges on which it granted relief.  (The issue here concerns EPA’s claim that the D.C. Circuit majority should not have considered arguments raised by the petitioners more than 60 days after the CSAPR was published in the Federal Register.) 
• Whether states are excused from adopting SIPs prohibiting emissions that “contribute significantly” to air pollution problems in other states until after the EPA has adopted a rule quantifying each state’s interstate pollution obligations.
• Whether the EPA permissibly interpreted the statutory term “contribute significantly” so as to define each upwind state’s “significant” interstate air pollution contributions in light of the cost-effective emissions reductions it can make to improve air quality in polluted downwind areas or whether the Act instead unambiguously requires the EPA to consider only each upwind state’s physically proportionate responsibility for each downwind air quality problem.

Model for enforcement

In its petition, the EPA made the point that in addition to being an environmental regulation of major importance by itself, the CSAPR is a lynchpin in a larger regulatory structure.  The Agency states:

“If not corrected, the decision below will have serious adverse consequences.  Its imposition of non-textual barriers to implementation of the good neighbor provision could delay by years the ability of downwind states to comply with the NAAQS, and could in some cases make it impossible for those states to meet statutory deadlines for doing so.  Because the EPA has planned to use the transport rule as a model for enforcement of additional NAAQS, the court’s decision also creates serious uncertainty about implementation of other CAA requirements.  Most fundamentally, the court of appeals’ errors will seriously impede the EPA’s ability to deal with a grave public health problem.”

Click here for EPA’s brief to the Supreme Court.