Review of Supreme Court Docket
Like A Good Neighbor? Supreme Court Will Hear Argument on Cross-State Pollution Plan
On December 20, 2023, the United States Supreme Court consolidated and scheduled oral argument on several emergency applications seeking a stay of the EPA’s “Good Neighbor Rule,” which requires more than 20 states to reduce air pollution that impacts downwind states who must meet certain health-based air quality standards for ground-level ozone. And the Court will go to the heart of the matter, requesting that the parties “be prepared to address . . . issues related to the challenge based on [State Implementation Plan] disapprovals [and] whether the emissions controls imposed by the Rule are reasonable regardless of the number of States subject to the Rule.”
Under the Clean Air Act, states must submit State Implementation Plans (SIPs), to be approved by EPA, setting forth how the state intends to meet national air quality standards for air pollutants. EPA further requires upwind states to address in their SIPs emissions that cause downwind states to exceed the air quality standards through no “fault” of their own. In 2021, the EPA rejected SIPs from 21 states because they did not adequately control for ozone emissions in downwind states. This then triggered EPA’s obligation to create a national plan for the states whose SIPs were not approved and in March of 2023, EPA issued the Good Neighbor Rule for those states.
Petitions for Review were filed in the D.C. Circuit by a number of states whose SIPs were disapproved, as well as industry groups and companies particularly affected by the emissions limitations. Among other things, the state petitioners claim that the Rule violates the Clean Air Act’s provisions directing each state to be responsible for controlling emissions within their state. Certain industry players also sought relief, contending that the Rule’s standards are vague, irrational and cannot be met without significantly overburdening businesses. On the other hand, several states subject to the Rule, including Pennsylvania, New Jersey, New York and Delaware, have sided with EPA along with a number of public interest entities. Interestingly, the Justices did not stay the rule pending oral argument, nor did they treat the applications for stay as petitions for review. As a result, the current proceedings in the D.C. Circuit will continue, at least until the Court rules on the stay applications.
Chevron Deference Reaches the High Court, For Real This Time
Chevron Deference is the principle by which courts will generally defer to an agency’s interpretation of an ambiguous statute and is so named because of its first articulation in the case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). However, in recent years, its potency has been slowly eroding with the apparent encouragement of the Supreme Court. Most recently, in West Virginia v. EPA, 597 U.S. ___ (2022), the Supreme Court struck down EPA rulemaking under the Clean Air Act on the ground that it was a “major question” of economic and political significance. In doing so, the Supreme Court essentially ran an end run around Chevron without addressing it head on.
This year, however, the Supreme Court will be taking on two cases, Relentless v. Department of Commerce, No. 22-1219, and Loper Bright Enterprises v. Raimondo, No. 22-451, to directly confront the continued viability of Chevron. Scheduled for argument in January, the issue before the Court is whether Chevron should be overruled or “clarified” such that ambiguity is unlikely to be found. Under the current make-up of the Court, it seems unlikely that Chevron will survive in its current form. Justices Thomas, Kavanaugh, Gorsuch and Alito have all, in various ways, signaled their disapproval of the doctrine. The potential impact of overturning Chevron is vast, as it could significantly undermine the ability of federal agencies to issue and enforce regulations to effectuate the laws the Congress enacts. And in few areas of the law is an agency’s expertise as fundamental to rulemaking as in the field of environmental law.
When Is a Fee an Unconstitutional Taking?
Also in January, the Court will hear oral argument on Sheetz v. County of El Dorado, California, No. 22-1074.
As a condition to receiving a building permit for a new home, the County of El Dorado imposed a “traffic impact mitigation fee” on landowner George Sheetz. Sheetz challenged the fee, arguing that, among other things, it violated the Takings Clause because there was no nexus or “rough proportionality” between the fee and the impact that would result from the building of his home. The California trial and appellate court rejected the argument, but the Supreme Court seems poised to disagree. If it does, the Court’s decision is likely to have a significant impact on municipalities’ abilities to charge environmental mitigation fees.
When Does a Rule Challenge Accrue?
Another case this term that could have significance for environmental law is Corner Post v. Bd. of Governors of the Fed. Reserve Sys., No. 22-1088. Under the Administrative Procedure Act (APA), the statute of limitations to challenge an agency rule is six years. But … six years from when? In this case, the Supreme Court will decide whether a claim under the APA “first accrues” when an agency issues a rule, even if in the abstract there is no injury to the plaintiff, or when the rule first causes harm to the plaintiff.
In the case at bar, in 2011, the Federal Reserve set the fee for bank processing of debit card transactions at 21 cents per transaction, even though the actual cost is much less. In 2018, Corner Post, a convenience store, opened for business and in 2021, filed a challenge to the fee as unreasonable and not proportional to the actual transaction costs. Both the district court and the Eighth Circuit held that Corner Post’s claim was barred by the six-year limitations period, which ran in 2017. But of course, Corner Post could not have challenged the rule then because it wasn’t even in business at the time. In September, the Supreme Court agreed to hear the case during the current term and its decision could open up a floodgate of challenges to long-established administrative rules, including those issued by the EPA.