By John Walke
Clean Air Director, Natural Resources Defense Council

• Read more about the Supreme Court case on the cross-state air pollution rule – and hear excerpts from the oral arguments at our AFJ Audio Analysis page.

Two of the most important health standards ever adopted by the Environmental Protection Agency to reduce harmful air pollution from power plants had their day in court last week.  Actually two courts:  the Supreme Court heard arguments on EPA’s Cross-State Air Pollution Rule (CSAPR), which targets smog and soot pollution emitted from power plants in upwind states that travels across state boundaries to foul the air in downwind states.  Down the street in the U.S. Court of Appeals for the D.C. Circuit, a three-judge panel heard challenges from industry, conservative states and some environmental groups to EPA’s Mercury and Air Toxic Standards (MATS) for coal- and oil-burning power plants.

Court-watchers observed that both EPA standards appeared to fare well with the jurists.  This is a good sign not just for lawyers and regulators, but for the well-being of the American people.  EPA has projected that together these two rules will prevent up to 45,000 premature deaths, 20,000 nonfatal heart attacks, and more than a half million asthma attacks every year once the standards are implemented.

Legal Issues & Oral Argument in the Cross-State Air Pollution Rule Case

The Supreme Court granted certiorari on three issues, but spent time in oral argument mostly discussing only one:  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 emission reductions it can make to improve air quality in polluted downwind areas.

EPA and just the industry challengers (importantly, see below) disagree over whether EPA may consider the cost and cost-effectiveness of pollution reductions in determining each upwind state’s contribution to transboundary pollution problems.  During oral argument, the industry challengers argued that EPA could not consider costs, and must instead apportion responsibility based solely on each upwind State’s physically proportionate responsibility for each downwind air quality problem.  EPA and all the parties supporting the agency in the Supreme Court view this to be overly simplistic, less effective, and perhaps even impossible to administer.  Instead, EPA argues that it may consider the costs of effectively controlling upwind air pollution contributions in conjunction with air quality factors.

With the exception of Justice Scalia, who spoke out forcefully against EPA’s position, most of the remaining Justices who did speak appeared receptive to siding with EPA. Justice Kennedy, for example, remarked that “the word ‘significantly’ does import a judgmental component” granting EPA some degree of latitude and could mean more than merely physical “amounts” of pollution, as the industry parties argued.  Comments from other justices―including a series of increasingly entertaining hypotheticals involving sheep and basketball and knives―suggested the understanding that the realities of air pollution are more complex than the simplistic “proportionality” approach adopted in the lower court ruling.

Mercury and Air Toxics Standard Case

It’s not possible to succinctly describe the range of complex legal and technical issues in the D.C. Circuit lawsuits that consumed nearly 4 hours of argument time.  The industry and state challengers to MATS mounted a series of somewhat audacious frontal assaults against EPA’s very ability to reduce mercury and nearly seven dozen other highly toxic air pollutants from power plants using the law’s most effective tools.

There is no dispute that Congress intended these tools for every other industry in the country, nor that power plants are far and away the largest industrial emitters of toxic air pollution in America.  (In 2011, EPA estimated that the following portions of all air pollution in the United States came from power plants: 50% of mercury emissions, 62% of arsenic, 77% of acid gases and 60% of sulfur dioxide comprising deadly particulate matter pollution.)

So there was an especially perverse audacity to the industry arguments that power plants did deserve to be treated differently―vastly more leniently―than any other industry.  The attorney representing the hostile utility companies actually began his presentation by arguing that power plants “are factually different from” other industrial sources; that “trace amounts” of hazardous elements “occur naturally in coal”; and that Congress understood that hazardous air pollutants from power plants pose “insignificant health risks.”

Fortunately, these arguments and related attacks on EPA’s core regulatory authority did not appear to gain much traction with the judges.  If the court upholds EPA’s authority and the standards as a whole, then the rule’s emission standards for acid gases and particulate matter will continue to drive the real-world pollution control, retirement and repowering decisions by companies.

Industry’s Campaign for Creative Destruction…

Aside from the critical environmental policies at stake, what unites these two cases is the creative—and sometimes shamelessly self-contradictory—positions taken by industry lawyers in defense of polluters.

The industry and state challengers to CSAPR had not argued during the rulemaking or in their briefs to the D.C. Circuit below that EPA was prohibited from considering cost in interpreting the term “significantly” and implementing the statutory transboundary air pollution program (also known as the “Good Neighbor” provision).  Judge Kavanaugh did not argue in his opinion below that EPA was barred from considering cost.

Only in the briefs to the Supreme Court did some industry challengers argue for the first time that the Clean Air Act barred EPA from considering cost in carrying out the Good Neighbor program.  Indeed, in a remarkable display of chutzpah, these challengers accused EPA in the Supreme Court of “largely ignoring” a Supreme Court cost precedent (American Trucking v. Whitman) that these challengers themselves had never cited. Further reflecting the switcheroo, scattershot nature of their Supreme Court arguments, industry had told the lower court that they were “not advocating” the implementation approach that they then turned around and argued to the Supreme Court that the statute mandated.

The attorney arguing on behalf of EPA from the Solicitor General’s office nicely captured the paradox―one might say, hypocrisy―at the heart of the utility challengers’ legal stance that EPA is barred from considering cost under the relevant statutory provision:

I mean, one of the ironic things about this case is that the only ill consequence of overcontrol is cost.  That is, this is not a situation in which there is some . . . distinct public health problem. . . that is caused if power plants are emitting too little NOx or SO2.  The only reason that people worry about overcontrol, about reducing emissions more than they need to be, is that it costs money.  And if that’s the problem to be avoided, it seems strange that EPA can’t take account of costs in theorizing a solution.

This explanation pointedly highlights that the industry challengers are not in fact seeking sensible cost solutions to the dilemma of transboundary air pollution; they are seeking annihilation of EPA’s standards and extended delay until EPA has the chance to reissue standards (for the third time) still required by law, at which point industry litigants will again mount new attacks in service of creative destruction and delay.

During the Supreme Court oral argument, in one of the more noteworthy exchanges, the Texas solicitor general admitted that the state challengers did not share the view of their industry co-challengers that EPA was prohibited from considering cost.  This division between the state and industry challengers, and even within the group of industry challengers, cannot help the most strident industry challengers’ cause arguing that the statute plainly bars consideration of cost.

The industry and state challengers to MATS in the D.C. Circuit presented more of the same, but with an even more startling twist:  there the challengers argued that a similarly ambiguous statutory term (“appropriate” v. “significantly”) actually required EPA to consider cost.  For all you lawyers out there, these challengers had argued in their briefs that the “plain meaning” of the statutory term “appropriate” required this result under step one of the famous case of Chevron v. NRDC.  When asked during oral argument whether it would be a “reasonable reading” under that case not to require EPA to consider cost, the Michigan attorney responded, “Yes.”  Judge Kavanaugh remarked that this response was decidedly not what the industry-state challengers’ brief said.

So what was the aim of the industry and state challengers in arguing that the Clean Air Act requires consideration of cost?  The same as the industry-state challengers’ objective in the CSAPR case, actually:  blowing up EPA’s regulation altogether.  The challengers’ D.C. Circuit brief says with ruthless efficiency:  “EPA’s failure to take costs into account, as Congress intended, requires vacatur of the MATS rule.”  It is a campaign to destroy the entire governmental effort to reduce hazardous air pollution from power plants.

EPA’s legal position in both cases is consistent regarding its authority to consider cost―or not―in the statutes the agency administers:  faced with ambiguous statutory language, EPA believes it has the legal discretion to consider or not consider cost, so long as cost is not a clearly prohibited consideration based on statutory indices (as it is in Clean Air Act section 109; see American Trucking v. Whitman); so long as EPA’s statutory construction is a permissible one; and so long as EPA provides rational grounds for when and whether it decides to consider cost based on the facts and statutory context.

…With No Coherent Alternative Regulatory Scheme

One final observation worth making about the industry stances in both cases:  it is striking how much the industry challengers have failed to advance any coherent alternative regulatory scheme that would give meaning to carrying out the Clean Air Act’s health objectives.  That is not their concern.  Escaping effective regulation is.

The industry challengers have not yet provided a sensible explanation for how to carry out the Good Neighbor program in a way that would protect downwind communities and take into account the complex, multi-pathway nature of transboundary air pollution. Justice Kagan rightly suggested that the mathematical “proportionality” dictate in the lower court ruling is “simplistic.”  Chief Justice Roberts repeated EPA’s description of transboundary air pollution pathways as a “spaghetti matrix.”  This figure shows how right he is:

NRDC blog graphic

 

In the MATS case, the industry challengers’ concern for a coherent regulatory solution is similarly absent.  Despite over 13 years fighting EPA’s efforts to effectively reduce all hazardous air pollutants from power plants, utility industry attorneys have yet to describe in any meaningful way what regulations they do believe the law allows and why that approach would be effective.  Counsel for the public health and environmental parties memorably described industry’s vague alternative as a “wide-open, utilitarian balancing test.”  Again, effective regulation is not the industry challengers’ concern.

In both cases, the result of the industry challengers’ conflicting legal interpretations regarding the permissibility of EPA taking cost into consideration would be to invalidate EPA’s clean air standards.  After thousands of pages of comments and legal filings, all the rhetoric about states’ rights and economic calamity and a war on coal, the industry lawsuits come down to one common enterprise:  blowing up EPA’s health standards that safeguard the air we breathe, and delaying replacement standards as long as possible while power plants keep on polluting.

The EPA clean air standards appear to have faced an overall favorable reception in court, and one hopes industry’s campaign of destruction will fail.  It seemed like clean air had a pretty good day in court.  Let’s hope the courts will uphold these standards to deliver healthier air and better days for all Americans.