Don’t Let the Door Hit You On Your Way Out: Trump EPA Suffers One Final Judicial Defeat.

Yesterday was the last full day of President Trump’s term.  On environmental issues, it closed on a fitting note – another major judicial defeat.  The District of Columbia Court of Appeals vacated EPA’s Affordable Clean Energy Rule.  In doing so, the Court – thanks to what appears to have been a misguided strategic decision by EPA – confirmed EPA’s authority to use a range of tools to regulate greenhouse gases under the Clean Air Act.

The crux of the case and the regulatory decisions made by the Obama administration in promulgating the Clean Power Plan and the Trump administration in promulgating the ACE Rule has always been whether EPA has authority to regulate “outside the fence line.”  In other words, can EPA require GHG emissions from power plants that would require generation switching?

The strategic decision that the Trump EPA made was that, rather than relying on its discretion to choose not to regulate outside the fence line, it instead concluded that it had no discretion and that the CAA unambiguously precludes regulation outside the fence line.  The Court rejected EPA’s conclusion, for three reasons.

First, the plain language of Section 7411(a)(1), the root of the EPA’s authority to determine the best system, announces its own limitations. Those limitations simply do not include the source-specific caveat that the EPA now interposes and casts as unambiguous.

Second, there is no basis—grammatical, contextual, or otherwise—for the EPA’s assertion that the source-specific language of subsection (d)(1) must be read upstream into subsection (a)(1) to equate the EPA’s “application of the best system” with the controls States eventually will apply “at and to” an individual source.

Third, even if subsections (a)(1) and (d)(1) were read together in the way the EPA proposes, they would not confine the EPA to designating a best system consisting of at-the-source controls. The EPA’s entire theory hinges on the Agency’s unexplained replacement of the preposition “for” in “standards of performance for any existing source” with the prepositions “at” and “to.” Yet the statutory text calls for standards of performance “for” existing sources. Emission-reduction measures “for” sources may readily be understood to go beyond those that apply physically “at” and “to” the individual source. Emissions trading, for example, might be a way “for” a source to meet a standard of performance.

It is this last argument that I find most persuasive and is also, I think, the argument most likely to be persuasive to the conservative members of the Supreme Court, assuming that the Biden administration resurrects the Clean Power Plan or something like it.

And if that happens, the Biden administration may well thank the Trump administration for its hubris and for the judicial decision that was the consequence of that hubris.

And I hope that the Biden administration is not also infected by hubris; there’s still nothing close to a guarantee that SCOTUS will go along with this line of argument.  Legislation would still be preferable to reliance on a broad interpretation of section 111(d).

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