Much news has been written about the U.S. Supreme Court’s (SCOTUS) June 2022 decision in West Virginia v. EPA. There have been dire headlines and equally dark predictions about what limited regulatory authority lies ahead for the EPA.
In reality, the ruling has little to no impact on current EPA regulations. However, careful analysis of the decision reveals reverberations that many analysts predict will shake up administrative law for the foreseeable future.
The case was a bit messy and complicated to begin with, and it had heavy political influences, both historically and in the present.
Authority to establish power plant greenhouse gas emissions limits was provided by the Obama administration’s Clean Power Plan (CPP), which set “flexible and achievable standards to reduce carbon dioxide emissions” that included “carbon pollution reduction goals for power plants and [enabled] states to develop tailored implementation plans to meet those goals. …”
“Soon after, 18 of the 50 US [states] joined a legal challenge against the emissions limits,” says Power Technology. “Led by West Virginia politicians, the legal case said that the Plan gave the EPA massive power to reshape the US economy. Opposers often say that state governments should decide emissions limits, not federal agencies. … Under former President Donald Trump, these legal challenges paused enforcement of the [CPP]. Trump then ordered a review of the Plan, removed funding for it, and later passed legislation undermining it. His Affordable Clean Energy [ACE] rule gave priority to low-cost power generation, with significantly less emissions regulation.”
However, in January 2021, a divided D.C. Circuit Court of Appeals sent the Trump administration rule back to the EPA’s drawing board, stating the rule was devised through a “tortured series of misreadings” of the Clean Air Act (CAA), according to Grist. This left the path open for the Biden administration to create a new rule.
In review, SCOTUS had already stopped the CPP from going into effect in 2016, and the Trump administration later repealed it. And the Trump administration’s replacement plan was also legally rejected. The Biden administration never said it wanted to revive the CPP rule. In fact, this administration has stated openly it is developing its own replacement regulatory plan.
Why would SCOTUS hear the case?
West Virginia v. EPA was already dead in the water. The regulations under legal attack no longer existed. Additionally, the energy industry has completely transformed since the case began. In her dissent filed in the case, Justice Elena Kagan noted that “market forces alone caused the power industry to meet [the regulations’] nationwide emissions target.” The regulations have become, “as a practical matter, obsolete.”
The court’s decision, spanning 89 pages, included Kagan’s dissent, a concurring opinion written by Justice Neil Gorsuch, and the majority opinion penned by Chief Justice John Roberts, who took several pages to justify SCOTUS’s decision to hear the case.
In determining whether the petitioners in the case had Article III standing, which requires that an “actual controversy persist through all stages of litigation,” Roberts based his argument on the legal term of “injury.” He wrote that “there can be ‘little question’ that the rule does injure the States, since they are ‘the object of’ its requirement that they more stringently regulate power plant emissions within their borders.”
He went on to write that it was the legal term of “mootness” rather than “standing” that was at stake in this case.
“And, under a mootness inquiry, the government bears a ‘heavy’ burden to prove that a once-live case is no longer so. The Court held that ‘voluntary cessation does not moot a case’ unless it is absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur. Since the government failed to promise that it would not reimpose emission limits predicated on generation shifting, the case was not moot,” says a Stanford Law School blog by David Freeman Engstrom and John E. Priddy. “Nothing in this part of the decision appears to hold significant longer-term doctrinal implications. It’s at best a clarification of the mootness rule. But the Court’s willingness to take the case at all—and the majority’s fancy footwork in the first part of its opinion to keep hold of it—was a clear signal that the Court’s ascendant conservative majority would use the case as a vehicle to make a broader statement.”
Roberts’s argument basically boils down to a precautionary tale in that the Biden administration could change its mind and revive the CPP.
Kagan strongly disagreed with Roberts’s reasoning.
“Kagan accused the majority of issuing an advisory opinion, that is, opining abstractly about the law as opposed to deciding an actual case. The Constitution prohibits the court from doing so,” according to syndicated columnist Joel Jacobsen in the Albuquerque Journal. “But if the administration tried to bring the old regulations back from the dead, courts could rule on their validity then. So, Roberts’ labored explanation doesn’t really tell us why the justices reached out to decide the case now.
“I think the justices chose a hot-button issue because they anticipated the news coverage would focus on that issue, with all its culture war salience, distracting attention from the court’s assertion of a new power to control the executive branch,” Jacobsen wrote.
FindLaw defines administrative law as “the body of law created by the agencies and departments of the government, which carry out the laws passed by Congress or a state legislature. When Congress passes a law on a complicated issue, Congress often needs help determining all of the details of how the law will be enforced and implemented. Administrative agencies and government departments fill in those gaps for Congress and pass additional rules and regulations to achieve Congress’s goals.”
Roberts’s opinion establishes two tiers for determining the validity of regulations issued by all federal agencies, Jacobsen pointed out.
“In ordinary cases, courts will continue to employ the ordinary canons of statutory construction to determine if the agency complied with Congress’s mandate,” he said. “But in ‘extraordinary cases,’ different legal rules apply. A case is extraordinary if it has ‘economic and political significance.’ Once a judge declares a case ‘extraordinary,’ all challenged regulations are presumed invalid, shifting the burden of persuasion to the agency. ‘The agency … must point to clear congressional authorization’ for the power it claims.”
In addition to the standard of a regulation having significant economic and political significance, Roberts also provided additional guidance for lower courts to determine “extraordinary” regulatory cases, including:
- Rules based on an expansive interpretation of ambiguous statutory text
- Rules whereby an agency is taking an unprecedented action
- Rules whereby agencies attempt to do something Congress failed to do
- Rules whereby agencies operate outside their area of expertise
- When the nature of the regulation does not conform to the agency’s claim to power
The problem is that SCOTUS failed to define “extraordinary,” “clear,” and “significant.” This leaves a great deal of uncertainty for industry impacted by federal government regulations.
“Given the extreme vagueness of the new standard, it’s difficult to predict exactly how this drastic change in the law will play out,” Jacobsen wrote. “It’s even possible that some judges might allow their personal political views to color their evaluation of the ‘political significance’ of a challenged regulation.”
Roberts said, “[O]ur precedent teaches that there are extraordinary cases … in which the history and the breadth of authority that the agency has asserted, and the economic and political significance of that assertion provide a reason to hesitate before concluding that Congress meant to confer such authority.”
This invokes the “major question doctrine,” which requires agencies to point to “clear congressional authority” for any authority they claim. The idea of the “major questions” legal doctrine is not new. In a 2001 environmental law case, Justice Antonin Scalia wrote that “the degree of agency discretion that is acceptable varies according to the scope of the power congressionally conferred.” Another SCOTUS decision determining the authority the Food and Drug Administration (FDA) had to regulate tobacco stated that “the court must be guided to a degree by common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency.”
These historical mentions clearly reveal that the major questions doctrine has been developing for some time.
This decision marks the first time the doctrine has been utilized in a majority opinion, meaning the concept now “squarely endorses the idea that the power and discretion of agencies becomes more suspect as the significance of the agency’s action increases,” adds the Stanford Law blog post. “[T]he Court’s decision plainly weakens a longstanding, even bedrock, principle of administrative law. That longstanding principle is that courts are to grant agencies deference—known as [the] Chevron deference—when the agency interprets its own statutes. To be sure, the Roberts Court has been chipping away at that deference rule for years. Among other things, it has narrowed the types of agency actions that are entitled to Chevron deference. And, increasingly, the Court doesn’t mention Chevron at all even in cases where it would seem to apply. What makes the Court’s decision so important is that, in contrast to these earlier efforts to nibble around Chevron’s edges, the ‘major questions’ doctrine mounts something closer to a full-scale frontal assault.”
Future legal implications
SCOTUS’s decision in this case definitely narrows instances in which the Chevron defense can be utilized. It also could be a jumping-off point to develop a stronger nondelegation rule, which is the rule “derived from the Constitution’s vesting of ‘legislative powers’ in Congress, that says, at least in its current formulation, that Congress can’t delegate policymaking authority without an ‘intelligible principle’ to guide the agency,” the Stanford legal blog analysis continues.
It also clearly shifts the power to make complex regulatory policies away from federal agencies, providing courts, and, at least in theory, Congress, with this power, the blog adds.
Jacobsen predicts some chaos ahead for administrative law.
“A good guess is that, over the course of the coming years, the various federal courts of appeals will adopt inconsistent guidelines for determining when a case qualifies as extraordinary. Eventually, the Supreme Court will tell us which, if any, guessed correctly, and a new cycle of litigation will commence,” Jacobsen wrote. “In the meantime, for lawyers representing companies with business before federal regulatory agencies, a West Virginia v. EPA analysis should become routine. An entire new field of litigation has suddenly opened up.”
Some analysts believe all the discussion about the SCOTUS decision gutting administrative law is much ado about nothing.
“Anyone who claims this decision would undermine the administrative state simply doesn’t know what they’re talking about,” stated William Yeatman, a research fellow in the Cato Institute’s Robert A. Levy Center for Constitutional Studies, in an article published on the Cato Institute’s website. “The practical problem with the executive branch interpreting vague old laws to make ‘major’ policy is that there’s no permanency. What any one presidential administration can do, the next can undo. … Chief Justice Roberts just put a stop to the chaos engendered by the worst excesses of executive lawmaking.
“Unlike regulations, laws endure. If Congress directs an agency to take on a major question, then the agency will perform that role, regardless of the president’s political orientation. From now on, when it comes to ‘major’ policymaking, the ball is in Congress’s court, as the Constitution intended.”