Environmental Protection Agency v. EME Homer City Generation

PETITIONER: Environmental Protection Agency, et al.
RESPONDENT: EME Homer City Generation, L.P., et al.
LOCATION: United States District Court, Massachusetts

DOCKET NO.: 12-1182
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT:

CITATION: 572 US (2014)
GRANTED: Jun 24, 2013
ARGUED: Dec 10, 2013
DECIDED: Apr 29, 2014

ADVOCATES:
Jonathan F. Mitchell - Texas Solicitor General, for the state and local respondents
Malcolm L. Stewart - Deputy Solicitor General, Department of Justice, for the United States
Peter Keisler - for the industry and labor respondents

Facts of the case

The Clean Air Act creates a federal-state partnership that aims to control air pollution in the United States. The Act requires the Environmental Protection Agency (EPA) to both establish air quality standards and gives the states significant freedom to implement plans in order to meet those standards. Among the problems the Act sought to prevent was the possible spread of air pollution from "upwind" states to "downwind" states.

In 2011, the EPA created the Transport Rule, a rule which sets emission reduction standards for 28 "upwind" states based on the air quality standards in "downwind" states. Various states, local governments, industry groups, and labor organizations brought suit in the U.S. Court of Appeals for the District of Columbia Circuit and argued that the Transport Rule created federal standards with no deference to the states, which violated federal law. The court held that the Transport Rule violated federal law because the Clean Air Act allows states to implement their own plans to curb air pollution.

Question

1. Did the U.S. Court of Appeals for the District of Columbia Circuit have jurisdiction to hear this case?

2. Did the Court of Appeals correctly interpret the statutory language in the Clean Air Act when it reviewed the EPA's actions?

3. Is an upwind state free from any obligations under the Transport Rule until the EPA has quantified that state's contribution to downwind states' air pollution?

Media for Environmental Protection Agency v. EME Homer City Generation

Audio Transcription for Opinion Announcement - April 29, 2014 (Part 2) in Environmental Protection Agency v. EME Homer City Generation
Audio Transcription for Oral Argument - December 10, 2013 in Environmental Protection Agency v. EME Homer City Generation

Audio Transcription for Opinion Announcement - April 29, 2014 (Part 1) in Environmental Protection Agency v. EME Homer City Generation

Justice Ginsburg has her opinion this morning in Case 12-1182 EPA versus EME Homer City Generation and the consolidated case.

Ruth Bader Ginsburg:

These cases concern the efforts of Congress and the Environmental Protection Agency to cope with a dauntingly complex problem, air pollution emitted in one State, but causing harm in other States.

Left unregulated, the emitting upwind State will reap the benefits of the economic activity causing the pollution without bearing the full costs of emissions generated from that State.

Conversely, downwind States to which the pollution travels are unable to achieve clean air because of the influx of out-of-state pollution they lack authority to control.

To tackle the problem, Congress included a Good Neighbor Provision in the Clean Air Act.

In its current phrasing, that provision instructs States to stop in-state sources from emitting any air pollutant in amounts which will either contribute significantly to downwind States nonattainment of any EPA-promulgated national air quality standard or hinder maintenance of such a standard.

Interpreting the Good Neighbor Provision, EPA adopted the Cross-State Air Pollution Rule commonly called the Transport Rule.

The rule requires consideration of costs, among other factors in setting the emission reductions an upwind State must make to improve air quality in polluted downwind areas.

A group of States and local governments joined by industry and labor groups petition for review of the Transport Rule in the U.S. Court of Appeals for the D.C. Circuit.

The Court of Appeals vacated the rule in its entirety.

It held, 2 to 1, that the rule exceeded the Agency's statutory authority in two respects.

First, the D.C. Circuit held EPA had not given upwind States a reasonable opportunity to allocate emission reductions among their pollution sources before the Agency stepped in and did the job itself.

Second, the Court of Appeals maintain the Good Neighbor Provision does not permit consideration of cost but instead demands that EPA focus exclusively on each upwind State's proportionate responsibility for each downwind State's air quality problem.

Because EPA's cost conscious approach required some upwind State to decrease emissions by more than those State's ratable share of downwind State pollution.

The rule in the Appeals Court view was fatally flawed.

We reverse the Court of Appeal's judgment.

We held first, that the Clean Air Act text does not direct EPA to defer state of an implementation of the Good Neighbor Provision pending EPA's guidance.

The act sets a series of precise deadlines to which the States and EPA must adhere once EPA issues a new air quality standard, a State within three years must adopt the State Implementation Plan or SIP adequate to comply with that national standard.

Those SIPs must include among many things, provision sufficient to satisfy the Good Neighbor Provision.

If EPA determines that the SIP is inadequate, the Act demands EPA to promulgate a substitute Federal Implementation Plan or FIP within two years of the Agency's SIP disapproval.

To this strict time schedule, the D.C. Circuit found an unwritten exception, one that would require EPA to give guidance to upwind States before substituting a FIP for a SIP, but no provision of the act directs EPA to furnish upwind States with information of any kind about their Good Neighbor obligations before issuing a FIP.

In contrast, other provisions of the Clean Air Act explicitly make EPA input a prerequisite to State action by imposing such a preliminary requirement without statutory direction to do to so.

We conclude the D.C. Circuit impermissibly amended the schedule Congress set.

We further conclude that in rejecting EPA's reading of the substance of the Good Neighbor Provision, the D.C.Circuit failed to give the Agency's interpretation due respect.

We held in a pathmarking Chevron decision and repeat today, Courts should accord dispositive effect to an Agency's reasonable interpretation of the ambiguous statutory language.

The Good Neighbor Provision in our view entrust interpretative authority to EPA at least as certainly as did the Clean Air Act Provision involved in Chevron.

In relevant part, the statute requires States to eliminate those amounts of pollution that contribute significantly to nonattainment in downwind States.

All agree this is no easy test for nonattainment in downwind States was that from the collective and interwoven contributions of multiple upwind States.

As expressed in the Holy book, “The wind bloweth where it listeth, thou hearest the sound thereof, but cannot not tell whence it cometh, and whither it goeth.”

The statute therefore calls upon the Agency to address an intricate causation problem.