Judges Greet Early Challenge to EPA Rule With Skepticism

Appeals panel appears unlikely to block the Clean Power Plan before it is final, as sought by industry and several states.

EPA Administrator Gina McCarthy speaks about the agency's carbon pollution rules at Georgetown University in October 2014. At an appeals hearing on April 16, 2105, federal judges sounded unlikely to accept early challenges from the industry to EPA's Clean Power Plan. Credit: EPA

Three federal appeals court judges sounded unlikely to accept early challenges to the Environmental Protection Agency's forthcoming Clean Power Plan, at least until the regulation is published in final form this summer.

At least two of the three judges, all from the more conservative side of the United States Court of Appeals for the District of Columbia Circuit, seemed hesitant during a public hearing on Thursday to take the unprecedented step of allowing a lawsuit to go forward at this stage of the regulatory process.

But as the morning wore on, all three judges appeared to relish a chance eventually to review the rules, which are at the heart of the Obama administration's climate change policies.

So they engaged in a lively two hours of oral arguments on the merits of the challenges, brought by the coal industry and coal-friendly states. It may be only a dress rehearsal, but the swordplay was impressive, not just on the question of timing, but on the underlying questions of law.

Those include whether the EPA has misconstrued the Clean Air Act to allow something that it actually prohibits, and whether the agency is engaging in an unconstitutional power grab, as claimed by the industry's most noted lawyer, Laurence Tribe of Harvard.

The first lawyer to argue for the petitioners, West Virginia's Solicitor General Elbert Lin, got less than a minute into his presentation when he was interrupted by a stern question from the bench that made clear the difficulty of persuading the court to stop this proposed rule in its tracks.

To issue a writ against a draft rule would be an extraordinary precedent, one that administrative law experts say would gravely damage the EPA, ripple through the regulatory system, and threaten gridlock at this powerful appeals court, where many such cases are first heard.

"Do you know of any case in which we have halted a proposed rulemaking?" asked Judge Thomas Griffith. It was a rhetorical question to which Lin could only say no.

"In a rulemaking there is a provision for judicial review, right?" Griffith went on. "When the rule comes out, it will be challenged, and we will get to it."

Judge Brent Kavanaugh seemed similarly skeptical.

Legal scholars said they were paying close attention to Kavanaugh's attitude, since he is an influential jurist with a reputation for reining in the EPA. If he wanted to deal the agency a setback he might consider a claim that companies and states are already suffering under the mere draft of the EPA's proposal. But judging by his questions, he seemed to be leaning the other way on the timing.

The third judge, Karen LeCraft Henderson, seemed most open to the suggestion that despite the formalities, the EPA's mind is essentially made up on the legal theory—if not all the particulars—of  a proposal that offers a complex system of allocating pollution limits state by state, and a menu of ways they might comply.

But that all depends on the agency's conclusion that the air law's Section 111(d) may be used to control carbon dioxide from existing sources, even if different pollutants from the same sources are controlled by Section 112.

"I see a closed mind," she said of the EPA and its administrator, Gina McCarthy. While McCarthy has been an ardent defender of the agency's legal strategy, she is also viewed as a seasoned, pragmatic and flexible bureaucrat.

Henderson seemed unswayed by the logic of Sean Donahue, a lawyer for environmental groups, who said that the agency not only hadn't completed all the elements of the final rule, but that it was likely to revise the section of its proposal that spelled out in full detail its own legal justification for its approach.

Some of the changes in EPA's legal rationale, Donahue suggested, would respond to comments the industry had submitted to the agency, such as those Tribe filed late last year on behalf of his client, Peabody Coal.

"They have already stated their position on the legality of it, and that is not going to change with comments," Henderson said. "The only thing that is going to change is a court's telling them, no, you are wrong on the law."

Ultimately, most observers expect the Supreme Court to decide whether the Clean Power regulation survives, just as it has in so many other air pollution cases.

Much of the complexity centers on how to construe arcane language in the Clean Air Act that the EPA contends opens the door for it to control carbon dioxide from power plants, but that petitioners claim expressly closes the door.

The lawyers hopped across the technicalities like frogs on so many lily pads, from potentially conflicting amendments that first slipped into the law when it was amended in 1990, to a footnote to the Supreme Court's 2011 decision in another climate case, American Electric Power v. Connecticut.

In that case, the Supreme Court ruled that companies may not be forced by the states under common law to stop dumping harmful carbon dioxide into the atmosphere. The reason, the court said, was simple: Congress, by passing the Clean Air Act, made controlling carbon dioxide a job for the EPA. Existing power plants, it said, would be governed by the law's Section 111(d).

That is a strong argument for the EPA's side, but one weakened by a footnote mentioning the Section 112 exception that the industry is now claiming. And this is a case where no print is so fine that it escapes attention.

If the appeals court does not let this case proceed, it might be just a few months before a new challenge comes. EPA had been aiming at a June deadline for a final rule, although the administration now says it will be sometime this summer.

Even a brief delay might be legally significant, because the Supreme Court has until June to issue its ruling on another major EPA regulation. Industry has asked it to overturn the very regulation that, under Section 112, puts controls on mercury and other toxic pollution from power plants..

If the Supreme Court sends EPA back to the drawing board on Section 112, that might eliminate the conflict with Section 111 that the coal industry is seeking to exploit.

And what if the appeals court hears all these arguments again? According to legal scholars, a new case could include new plaintiffs making new arguments against the final rule, and it would be heard by a new panel, probably made up of different judges.

So it's hard to make much of a prediction on the long-term outlook for one of the biggest climate cases of the era.

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