Supreme Court justices appeared divided Wednesday in a major case challenging whether the Environmental Protection Agency “unreasonably” refused to consider the costs of new pollution rules that have driven up costs for power plants and consumers and threaten grid reliability.
A divided high court could make for a difficult decision in vanquishing the stringent environmental rules that critics say represent “overreach” by the EPA.
Justices Sonia Sotomayor and Elena Kagan took the lead in questioning the attorneys for the 21 states and industry groups who say the EPA was wrong by not looking at costs before choosing to regulate the industry.
The two liberal justices’ questioning refuted the states’ arguments that the EPA did not have the discretion under the Clean Air Act to not consider costs. But the more conservative justices, such as Anthony Kennedy, who is frequently the swing vote in divided cases, said the law provides room for interpretation.
“So if the [EPA] is directed only at public health hazards — it doesn’t talk at all about cost, just public health hazards — why in the world would one assume that Congress was thinking about cost?” Sotomayor asked Aaron Lindstrom, the solicitor general for Michigan and the lead state in the case.
The rules seek to regulate harmful air pollutants emitted from coal- and oil-fired power plants, such as mercury, and go into effect next month. The rules were made final a few years ago, but have been heavily contested in the courts ever since.
The D.C. Circuit Court of Appeals ruled in April 2014 that the EPA has the discretion to refuse to assess the costs of its regulations under the Clean air Act. But states and utilities have remained adamant that EPA’s interpretation of the law is wrong, and asked the Supreme Court last year to weigh in. The court agreed to hear the case in November.
Critics of the rule argue the unprecedented $9.6 billion annual cost to comply with the rule is too steep. The rule is forcing power plants that can’t comply to close, the critics say, calling the pollution regulation a prime example of federal “overreach.”
Environmental groups such as the Sierra Club support the rules as a way to wean the country off fossil fuels and support closing older, less-efficient plants.
Many coal-dependent states say once the pollution rules go into effect, expect rolling blackouts as plants begin to close over the next seven years, while the price of electricity rises.
Nevertheless, the EPA and its supporters say the rules are appropriate and will save taxpayers nearly $100 billion in health costs.
The justices were tasked with answering the question: “Did EPA unreasonably refuse to consider costs in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities (power plants)?” according to a notice posted by the court.
Lindstrom argued that the EPA does not have the right to refuse assessing the costs of such an unprecedented rule.
His arguments were followed by a barrage of questions by Sotomayor and Kagan, who remained the most vocal during the three-hour hearing. The two justices focused primarily on the solicitor’s reading of the Clean Air Act, the law Congress passed in the 1970s that gives EPA its authority to regulate.
The Clean Air Act directs the EPA to regulate if doing so is “appropriate and necessary,” but is “silent” on whether the finding permits it to consider cost, according to an official court summary.
Justice Anthony Kennedy pointed out the word “appropriate” under the law “is a capacious term,” with room for interpretation.
“It is a capacious term, but it, in fact, cuts against the government,” Lindstrom replied. It cuts against EPA because “one of the things that’s encompassed within the term ‘appropriate’ is that it looks at all of the circumstances,” including costs.
“So the very fact that it’s capacious cuts against them,” Lindstrom argued.
Sotomayor pressed Lindstrom if he believed the law’s use of the word “appropriate” is ambiguous, even when taken in context.
“I don’t think it’s ambiguous in context,” Lindstrom replied. He said the EPA’s argument that it can regulate “without considering cost” goes against the law.
Sotomayor continued to probe, saying the EPA decides to regulate by analyzing health impacts. But it does not have to study the costs of implementing its regulation, under the law.
The only thing that EPA is directed to do is to make a determination that the toxic pollutants they seek to regulate are a “public health hazard,” Sotomayor said.
