September 27, 2016

Update on Clean Power Plan oral argument

By Jonathan Wood Attorney

The full D.C. Circuit is halfway through what is turning into a marathon argument on the legality of EPA’s “Clean Power Plan”–which has also been characterized as the Costly Power Plan. For those that aren’t familiar, the plan was adopted after Congress rejected legislation, supported by the Obama administration, to regulate greenhouse gases. The President famously refused to accept Congress’ decision, vowing that if it wouldn’t go along with his vision he’d circumvent Congress by enacting it through administrative agencies.

So far, the focus in the argument has been whether EPA has the authority to adopt the plan. Under the Clean Air Act, EPA may impose emissions limits on pollution sources, based on the feasible and cost-effective control technologies available.

The Clean Power Plan goes much further. Instead of setting the limit for coal fired power plants based on the technologies that they could implement, the plan sets emissions that these plants can’t possibly achieve. Instead, EPA set the limits so that states and power companies would have no choice but to start phasing out coal power and replace it with solar and wind.

The states and companies argue that EPA cannot boot strap its limited authority over pollution sources to regulate far beyond them to remake the nation’s energy sector. Traditionally, this power has been understood as limited within the “fence line” of the source.

The judges seemed somewhat divided in that issue. However, the challengers got more traction with another argument, which could have repercussions far beyond this plan.

In several recent cases, the Supreme Court has said that agencies should not be assumed to have power to decide questions of “vast economic and political significance” unless Congress clearly says so. In such cases, agencies receive no deference.

Several of the judges, including those who expressed support for the plan’s underlying policy, noted that if any case raises such questions this is it. The so called “major questions” exception to the deference agencies usually receive is an important, but under utilized bulwark against agency overreach.

Judge Griffith noted that it’s needed to prevent agencies from seizing power when Congress declines to delegate it, which is precisely what happened here. Congress considered and declined to pass legislation similar to the plan.

Judge Brown followed up, noting that the major questions exception safeguards the separation of powers. Our elected representatives, not unelected, unaccountable bureaucrats, are supposed to decide the big questions that could affect our lives in incomprehensible complicated ways.

Judge Kavanaugh added that’s a major concern here. EPA’s plan will destroy jobs and significantly depress the economies in communities involved in coal production, not to mention raising electricity costs for the rest of us. Congress, sensitive to these consequences, might want to take a more moderate approach or provide an additional safety net for affected communities. But EPA doesn’t account for these consequences in the same way.

If the Court takes this approach, the Plan could be on shaky grounds. It could only be upheld if the Court thought Congress had clearly given this power. But Congress limited EPA’s power to regulating sources. It’s doubtful that the Court will think that includes regulation of everything in the energy sector, including beyond the fence line of sources.

Having got the crucial administrative law issues out of the way, the Court will proceed to considering whether the Plan is unconstitutional after lunch. I’ll add an update on those issues later in the day.

Update: The court heard an additional 3+ hours of oral argument after the lunch break, once again highlighting the unique nature of this case. The focus of the constitutional discussion was whether the Clean Power Plan “commandeers” state governments and officials. Since states are responsible for constructing and maintaining the electric grid, they argue, the Plan is conscripting them into the implementation of the plan.

Unfortunately, it appeared that argument wasn’t faring well with the judges. The judges pushed back. They asked what the consequences would be if the commandeering doctrine was extended beyond cases where the federal government was directly forcing states to do something. Several judges noted that there are a lot of federal statutes that impose requirements on private parties who, in order to comply, must get permits or approvals from state officials.

The full court will now consider the case and issue its decision. Either way, it seems likely that this important case is destined for Supreme Court review.

What to read next