The Supreme Court Suspends Obama’s Clean Power Plan: Changing the Law on Staying Put

By Tracy Hester, Professor of Environmental Law and Emerging Technology

In a surprising move, the U.S. Supreme Court has stayed implementation of the Environmental Protection Agency’s Clean Power Plan rules. These rules – the centerpiece of the Obama Administration’s climate change agenda – limit emissions of carbon dioxide and other greenhouse gases (GHGs) from large existing coal-fired or natural gas power plants.     With the aftershocks of Justice Antonin’s Scalia’s unexpected death on Feb. 13 still reverberating, the issuance of the stay as one of the last Court rulings with Scalia’s participation throws the Clean Power Plan’s future and legality into doubt and confusion.

In particular, the Clean Power Plan would require states to reduce overall GHGs from electricity generators by 33 % (below 2005 emission levels) by the year 2030, and almost all states must submit a proposed plan on how they will achieve those reductions. If a state fails to provide its proposal or request an extension, the federal government will draft its own plan for the state and EPA will directly impose it.  As a result, the Clean Power Plan is one of the most ambitious, sweeping and important environmental regulations EPA has ever promulgated.

If, that is, the courts ever allow the Plan to take effect.

The challenges to the Clean Power Plan before the Supreme Court are deeply unsurprising in one sense.  When EPA published its final rules on October 23, a firestorm of lawsuits and adminis­trative challenges immediately broke out. To date, 27 states, the U.S. Chamber of Commerce, numerous coal and electric companies and other groups have joined the lawsuit to halt the rules, while 18 states have jumped in to defend them. Given their importance, these rules are already probably the most aggressively contested environmental rules in U.S. history.  The fact that they would arrive before the Supreme Court was, in one sense, a foregone conclusion.

It is the way they arrived at the court that astonishes. In the long run, the vehicle that carried these rules to the court may overshadow the actual substance of its final decision about the Plan.

Why?  Usually, when a federal court hears a challenge to an administrative regulation, the judge allows the agency to move ahead with the rule during the court proceeding. This standard approach makes sense if environmental, health and safety rules would protect the public during a long court case, and industry would not sufferable irreparable harm or ruinous costs in the meantime. The status quo’s tilt towards implementation would therefore shield the public from harm if litigants tie up rules for years in protracted litigation.

As a result, courts have usually not stayed federal regulations except in extremely rare circumstances, and they usually require challengers to show both a high chance they will succeed on the merits as well as suffer irreparable and serious harm if the rules rolled ahead in the meantime.

The Court’s unexpected stay of the Plan may augur a change in the federal courts’ willingness to halt other environmental rules during litigation. If true, EPA may have helped bring this fate upon itself.  When the Supreme Court wrapped up a long and fractious lawsuit in 2015 by striking down EPA’s limits on mercury emissions from utility power plants, EPA publicly shrugged and declared victory anyway.  According to the agency, the vast majority of power plants installed mercury controls during the litigation rather than face prolonged regulatory uncertainty or postpone other capital investments. EPA’s statements, as you might expect, immediately became the centerpiece in arguments that EPA was again using delay tactics and protracted litigation to force another environ­men­tal fait accompli with the Clean Power Plan.

Not only did the Supreme Court grant a stay here, it issued one with a ferocious bite. Remember that the case hasn’t actually gotten to the Supreme Court yet. Instead, the D.C. Circuit Court of Appeals still must make its own decision on whether to uphold the Clean Power Plan. In fact, the D.C. court had already denied the states’ and industry’s request for a stay – which means the Supreme Court’s decision to issue one anyway is literally the first time that it has reached down to impose a stay while the underlying case was still before a lower court. In addition, the Supreme Court’s stay won’t lift even if the D.C. Circuit upholds the Clean Power Plan. The clamp on the Plan’s implementation remains in place until the Supreme Court decides whether it will hear an appeal – and, if it does, the Court will almost certainly extend the stay until it ultimately makes its own ruling.

What does all of this courtroom maneuvering mean? Most importantly, it’s clear that the Clean Power Plan won’t take effect for quite a while. Even though the D.C. Circuit has put the case on an aggressive timeline, it won’t hear oral arguments until June 2016 and likely won’t reach a decision until summer 2016, at the earliest.  If it upholds the rule and the parties appeal successfully to the Supreme Court, the justices likely won’t issue a decision until 2017 – again, at the earliest.  The complicated and potent political skirmishing over Justice Scalia’s replacement will only add to this uncertainty.  As a result, the stay stays until then.

But this startling outcome doesn’t spell doom for the Clean Power Plan itself. First, states must still decide whether they’ll prepare to implement the rules during the court proceedings and while the stay remains in effect. Awaiting the court’s final ruling might risk a decision upholding the Plan (especially with the loss of Justice Scalia’s likely vote against the Plan), and EPA could then require states to cobble together their proposed plans under accelerated timeframes with less flexibility.  Second, the timing of the Supreme Court’s decision means that the ultimate fate of the Clean Power Plan may rest in the hands of the next presidential administration – be it Republican or Democratic. And last, despite the unprecedented nature of this particular stay, federal courts have previously stayed important EPA Clean Air Act rules during litigation – but then upheld the regulations anyway when the judges made their final decision.

For Texas, the ball is back in the state’s hands. Will it undertake any effort – even contingency planning – to prepare for a possible revival of the Clean Power Plan’s implementation? The state’s recent bitter experience over its fight against greenhouse gas permits under EPA’s Prevention of Significant Deterioration program might argue for some quiet back-up planning. Key officials at the Texas Attorney General’s office and the Texas Commission on Environmental Quality, however, are publicly stressing their unified opposition to the Plan as an unprecedented overreach by the federal government, which doesn’t bode well for attempts behind closed doors to quietly map out possible Texas compliance strategies if the Clean Power Plan, finally, escapes the stay.

Tracy Hester teaches environmental law and emerging technology at the University of Houston Law Center. His research focuses on the application of environmental laws to emerging technologies and risks, such as climate engineering, nanotechnologies, genetic modification, wind and other renewable power projects, and on novel compliance and liability issues.

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