Ramifications of West Virginia v. EPA

January 18, 2023
Alice F. Douglas, Esq.
MGKF Special Alert - Federal Forecast 2023

In June of last year, the U.S. Supreme Court’s issued its decision in West Virginia v. EPA, 142 S.Ct. 2587 (2022). In overly simple terms, this case was the effective tiebreaker in a years-long battle between the Obama and Trump administrations’ respective plans for reducing greenhouse gas (GHG) emissions from electric generating facilities. Obama’s Clean Power Plan (CPP) sought to reduce GHG emissions by requiring actions not only at affected facilities but also more broadly across the power sector, by forcing a generation shift away from coal-fired plants. The latter category of reductions is commonly referred to as "beyond the fence line." Trump's Affordable Clean Energy (ACE) rule, by comparison, who have stopped short of requiring any emissions reductions that could not be achieved at the facility level.

Both regulations got held up in litigation and, remarkably, neither one ever took effect. Biden’s EPA also stated that it had no plans to revive the CPP. Some were surprised, therefore, that the court agreed to hear West Virginia at all, with Justice Elena Kagan herself observing in her dissent that the court’s “docket is discretionary, and because no one is now subject to the [CPP’s] terms, there was no reason to reach out to decide this case.”

Even more surprising, however, was the legal theory the court relied upon in reaching its decision: that is, the major questions doctrine.  Essentially, this doctrine stands for the proposition that agency discretion must be curtailed when an agency has stretched the boundaries of statutory interpretation to claim new authority to address important problems of the day that were not within the agency’s jurisdiction previously according to the express language of the statute. While this sounds logical enough, if we look at how the major questions doctrine could take shape in the framework of environmental law, the doctrine seems poised to encroach upon territory that was previously accepted as belonging to the EPA for two main reasons.

First, the major environmental statutes are old and have not been amended in several years.  Although it has generally been understood that Congress purposefully drafted these statutes broadly so the EPA would have the discretion to address the environmental problems of tomorrow, West Virginia could signal the majority of the court’s desire for a paradigmatic shift.

Second, the types of problems that EPA seeks to address fall directly under the major questions doctrine umbrella – they are issues of vast economic and political significance that involve complex and difficult-to-foresee policy implications.  While it has also been generally understood that the EPA, rather than Congress, had the technical expertise necessary to address these significant environmental policy issues, the majority’s reasoning in West Virginia could cut against that premise.

Notably, the West Virginia court did not completely ban the EPA from pursuing the energy-shifting approach described in the CPP as a means of climate regulation. Instead, it said that for the EPA to do so, Congress would need to amend the Clean Air Act to expressly grant the EPA the requisite authority. However, Congress has not amended the Clean Air Act in more than 30 years. We will therefore need to watch how the court’s West Virginia decision impacts the Biden administration’s climate regulatory agenda more broadly, particularly given the EPA’s ambitious goals to reduce GHG emissions from current levels.