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High Court Rules That EPA Has Authority To Regulate CO2 Emissions From Cars, Must Provide Explanation For Deciding Not To Regulate



April 18, 2007

Addressing for the first time the politically charged subject of global climate change, the Supreme Court ruled, on April 2, that the Environmental Protection Agency (EPA) has authority under the Clean Air Act to regulate emissions of carbon dioxide from new motor vehicles. The Court went on to hold that if EPA chooses not to exercise that authority, it must explain that decision in a way that conforms to the words of the statute. Along the way, the Court significantly liberalized the requirements that States must satisfy to show they have constitutional standing to bring lawsuits challenging federal regulatory action – or inaction. The decision, captioned Massachusetts v. Environmental Protection Agency, 549 U.S. — (2007), is available at http://www.supremecourtus.gov/opinions/06pdf/05-1120.pdf.

The dispute began in 1999, when a coalition of environmental groups filed a rulemaking petition that asked EPA to regulate emissions of carbon dioxide and other greenhouse gases from new motor vehicles under Section 202 of the statute. That section provides that the Administrator of EPA “shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from [new motor vehicles] which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” 42 U.S.C. §7521(a)(1). After EPA denied the petition in 2003, the environmental groups, now joined by a number of States and local governments who intervened, challenged EPA’s decision in the D.C. Circuit Court of Appeals. The three-judge appellate panel produced three separate opinions, but two of the judges agreed that EPA had properly exercised its discretion in denying the rulemaking petition. The Supreme Court granted certiorari last year.

Before it could reach the merits of the petitioners’ challenge, the Court had to determine whether any of them had standing to bring the litigation under Article III of the Constitution, which limits the jurisdiction of federal courts to justiciable “Cases” and “Controversies.” Supreme Court precedent requires that at least one of the petitioners plaintiffs show a “concrete” and “particularized” injury that is either actual or imminent; that the injury is “fairly traceable” to the defendant; and that a favorable decision from the court will redress the injury. On this crucial threshold issue, Justice Stevens, writing for a slim 5-4 majority that included Justices Breyer, Ginsburg, Souter, and Kennedy, focused on the “special position and interest” of one of the petitioners – Massachusetts. Reaching back a full century to a case that had not been cited by any of the litigants or by the court below, Justice Stevens emphasized Massachusetts’s status as a “quasi-sovereign” within our federal system, which distinguished it from private individuals (such as the environmental groups that filed the rulemaking petition). That special status, coupled with the procedural right created by Congress to challenge EPA’s rejection of the rulemaking petition, entitled Massachusetts to “special solicitude” in the Court’s standing analysis.

Under this relaxed version of the standing requirements, the majority had no trouble finding that EPA’s denial of the rulemaking petition presented a risk of harm to Massachusetts – loss of coastal land resulting from sea-level rise – that was both actual and imminent, and that a favorable court decision could well prompt EPA to take steps that would reduce that risk. In dissent, Chief Justice Roberts, joined by Justices Scalia, Thomas, and Alito, sharply criticized the majority’s standing analysis, arguing that the relaxation of Article III requirements for a State had “no basis in our jurisprudence,” and that the declarations submitted by the petitioners failed to show that the injury claimed by Massachusetts was either particularized or imminent. Moreover, the dissent continued, the small contribution of new vehicle emissions to the total climate change problem, and the even smaller difference that could be made by EPA regulation of those emissions, made it impossible for the petitioners to satisfy the causation-based “traceability” and “redressability” prongs of the Court’s standing test.

On the merits, the majority rejected both EPA’s contention that it did not have statutory authority to regulate carbon dioxide as an “air pollutant” under the statute, and its conclusion that even if the statute gave it such authority, it could decline to exercise it based on policy considerations and a judgment because of substantial scientific uncertainty surrounding climate change it would be better not to regulate. On the issue of statutory authority, the Court noted the extremely broad statutory definition of “air pollutant,” and dismissed EPA’s argument that subsequent congressional decisions to promote inter-agency collaboration and research on global warming, and not to enact binding emissions limitations for greenhouse gases, meant that Congress could not have intended to grant EPA authority to regulate carbon dioxide as it had for conventional air pollutants.

Finally, the majority ruled, if EPA decides not to exercise its statutory authority, it must provide “reasons [that] conform to the authorizing statute.” In rejecting the rulemaking petition, EPA had cited various policy considerations, such as the likely effectiveness of other executive branch programs in addressing global warming and the chance that regulation of new vehicle emissions under Section 202 will impair the President’s ability to negotiate emissions reductions with developing nations such as China and India. The agency had also determined that scientific uncertainty about many aspects of global warming made it better not to regulate at this time. Justice Stevens firmly rejected these reasons as beyond the limits defined by the statute. Instead, once it decides to respond to a rulemaking petition such as the one at issue, “EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.” In a separate dissent on the merits, Justice Scalia, joined by Justices Thomas and Alito, argued that the Clean Air Act contains no requirement that the Administrator make any judgment at all as to whether a given substance will “cause, or contribute to, air pollution” whenever a rulemaking petition is filed, and that EPA offered valid reasons for deferring a judgment on that question. Moreover, Justice Scalia continued, even on the majority’s own terms, EPA acted within the law. Noting the majority’s holding that “[i]f the scientific uncertainty is so profound that it precludes EPA from making a reasoned judgment as to whether greenhouse gases contribute to global warming, EPA must say so,” Justice Scalia contended that “EPA has said precisely that – and at great length,” referring to a 2001 report by the National Research Council. He also disagreed with the majority’s conclusion on statutory authority, arguing that carbon dioxide did not unambiguously fall with the statutory definition of an “air pollutant,” and that EPA’s determination that it was not an “air pollutant” within the meaning of the statute was reasonable and entitled to deference.

The Court’s decision will have effects that go well beyond EPA’s ultimate decision on remand as to whether, and how stringently, it should regulate emissions of carbon dioxide and other greenhouse gases from new motor vehicles. It will certainly affect pending challenges in the D.C. Circuit to EPA’s failure to regulate emissions of greenhouse gases from power plants and industrial boilers, as well as other cases involving attempts by States to control such emissions via statute or using the common law. And its holding on standing, especially as it appears to lower the bar for States that seek to challenge federal agency decisions in court, may reshape many other areas of environmental law.