In this episode, two Clean Air Act experts — Jack Lienke, regulatory policy director at the Institute for Policy Integrity, and Kirti Datla, director of strategic legal advocacy at Earthjustice — discuss the recent Supreme Court decision in the case of West Virginia v. EPA, which would dramatically curtail EPA's powers based on legal justifications that are, charitably, underbaked.
Full transcript of Volts podcast featuring Jack Lienke and Kirti Datla, March 11, 2022
David Roberts:
Last week, the US Supreme Court heard opening arguments in West Virginia v. EPA. Red states and coal companies are suing EPA, claiming that it overstepped its authority in creating the Clean Power Plan, an Obama-era policy meant to reduce carbon emissions at existing power plants. One interesting and relevant feature of the CPP is that it was never actually implemented and is not in effect.
If it seems odd to you that petitioners are claiming to be harmed by a rule that does not exist, you are not alone. The fact that the court took this case at all seems to indicate that it is eager to have a say about EPA’s authority over greenhouse gases in advance of the Biden administration writing a new rule. Climate advocates are bracing for the worst.
There are several legal questions at stake in the case, ranging from narrow issues regarding the exact interpretation of statutory text to broad issues that relate to the ability of Congress to delegate rule-making authority to administrative agencies at all.
To help me dig into the details of the case and explore its possible outcomes, I called up two experts on the subject. Jack Lienke is regulatory policy director at the Institute for Policy Integrity and an adjunct professor at the New York University School of Law, where he teaches about regulatory policy. He is a longtime expert on the Clean Air Act and co-author of a book on the subject called Struggling For Air.
Kirti Datla is the director of strategic legal advocacy at Earthjustice. Before that she was a lawyer who briefed cases before federal courts and the Supreme Court, an attorney-advisor in the Department of Justice, and a clerk for Supreme Court Associate Justice Sonia Sotomayor. She studies broader legal doctrines like jurisdiction and the scope of federal power.
Lienke, Datla, and I discuss the history of the case, whether SCOTUS should have taken it at all, the legal issues involved, and the possible rulings we might expect from the court, ranging from bad to terrible. Despite the absurdity of the situation, the conversation was a ton of fun and extremely educational.
Jack Lienke, Kirti Datla, welcome to Volts.
Kirti Datla:
Happy to be here.
Jack Lienke:
Thanks so much.
David Roberts:
Let's start with a little background. In 2015, Obama's EPA issued the Clean Power Plan, which would try to reduce greenhouse gas emissions at existing power plants. It faced a billion lawsuits; in 2016, the Supreme Court took the extremely unusual step of staying the rule. Then, of course, Trump was elected, and Trump's EPA issued a rule that would at once get rid of the Clean Power Plan and implement the American Clean Energy (ACE) rule. In 2021, a US district court threw out ACE because it was hot garbage, and thereby also threw out the throwing out of the Clean Power Plan.
So we’re in chaos. Everything's up in the air. And now the Supreme Court is taking this case that is about the mechanisms that the Clean Power Plan used, even though there is no Clean Power Plan in existence.
Jack, tell us who's on which side this time around, because it's a little bit different than it was back in the 2016 lawsuits.
Jack Lienke:
Some red state attorneys general and some coal companies petitioned for Supreme Court review. Notably, no power companies petitioned for review, even though the entities regulated by the Clean Power Plan and the Affordable Clean Energy rule were power plants.
David Roberts:
There are none. Zero. It's only red state attorneys general and coal companies.
Jack Lienke:
As far as who's actually filed briefs in the case, there are some rural electricity cooperatives.
Kirti Datla:
And the National Mining Association. But basically, yeah, it's the red states and the coal companies.
David Roberts:
Last time the Clean Power Plan was being sued, it was the regulated power companies that were suing. The people seeking redress here are not even the regulated entities, which is one striking aspect of this case.
Let's talk about the standing to sue, because that's an issue in this case. This case is notably weird in that the lawsuit has to do with a rule that does not exist and was never implemented. Is there any precedent for that?
Kirti Datla:
You're right to be confused about what's happening here, because the current Supreme Court is one that cares deeply about standing. Last term there were six or seven decisions that touched on standing, and they have a very restrictive view of it.
When anyone goes to the Supreme Court, they have to explain why the decision below – in this case the DC Circuit's decision vacating the ACE rule – hurt them and why it benefits them to have that decision overturned. In this case, how does it hurt the red states and the coal companies to have no rule on the books? Isn't that group of folks better off with no regulation in place? We can get into what their possible answers are, but as a very basic intuitive matter, you can see why there's at least a serious question about what's going on here.
For the most part, the Supreme Court doesn’t have to take cases; they get to pick their cases, and they don't take that many. This was a choice on their part. They wanted to take this case, despite this serious question about whether anyone has standing and whether there's any need for them to step in. This is what they're choosing to spend their quite precious limited time on.
David Roberts:
In the first day of arguments, this was the solicitor general's basic approach. She didn't even get into the substance of the case; she was just arguing “you shouldn't take this case.” Will the justices at some point have to address standing and answer that question?
Kirti Datla:
Yes, they have to address it. Jurisdiction, standing – these are questions about the court’s authority to hear a case at all. Given how much it's come up and all the arguments, they're going to have to say something about it.
There are two theories about why there’s standing here, and I know Jack has views on one of them, which is whether the Clean Power Plan is currently injuring anybody.
Jack Lienke:
One of the arguments that's been made is “the Clean Power Plan could spring back into existence at any time. The Biden administration has said that it's not bringing it back, but we can't count on that.”
It's literally not possible for the Clean Power Plan to spring back into existence. All the Clean Power Plan was was a set of guidelines for states to develop plans. The Clean Power Plan said “here's the average emission rate that your fossil fuel-fired power plants should achieve. States, go back to your corners and come up with a plan for how you're going to achieve that average rate, whether it's through trading or some other means.”
The courts stayed application of the rule back in February 2016, so those plans were never developed. The deadline for submitting them to EPA has long since passed. So even if the Clean Power Plan were to take legal effect again, there would necessarily need to be another rulemaking to set new deadlines.
Also, on a nationwide basis we've already achieved the emission goals set by the Clean Power Plan. So what would you really be required to do?
David Roberts:
The targets that were never implemented, that now petitioners claim to be being harmed by, have already been exceeded by the market itself. It's not just that there's no harm because there's no rule – even if there were a rule there's no harm, because the targets of the rule have already been met.
Jack Lienke:
Right. Renewables ended up being cheaper than expected, gas ended up being cheaper than expected, renewable tax credits that EPA didn't expect to be renewed back in 2015 were renewed. We did better than EPA projected, through market forces and state policies.
David Roberts:
When the court rules about how an agency can implement a law before the agency has actually done it, that's called an advisory opinion, right? And the Supreme Court is just not allowed to do that.
Kirti Datla:
That's totally right. The literal Constitution says that the federal courts can only address cases or controversies. That's been interpreted to mean a real dispute between real parties facing real consequences.
There's no rule on the books. It's not clear how the Clean Power Plan springing back into existence hurts anybody. It's not clear how not having the ACE rule on the books hurts anybody who is asking the court to hear this case. So it has exactly the flavor of an advisory opinion, which in any other case – certainly one an environmental group tried to bring – would be a problem.
David Roberts:
That's level one of ridiculousness here, that this case exists at all. The fact that the Supreme Court took this case is already a big red flag.
Moving beyond that, there are three substantive legal issues involved. Going from narrowest to most broad, they are the fence-line question, the major questions issue, and the nondelegation doctrine.
Let's start with the narrow one. The Clean Power Plan told states “here's what you’re targeting for the average carbon intensity of your power sector; it's up to you how you reach that. You can put pollution controls on power plants, build more clean power, implement some energy efficiency, fund electric vehicles; it's very flexible.”
That rule can be construed as requiring changes “outside the fence line” of the power plant – changes that are outside of the regulated entity. The petitioners here are saying that that is beyond the authority that the Clean Air Act grants EPA.
Is there anything in statute that would restrict EPA’s range of motion here, any objective measure of how much authority EPA has? Or is this just “it feels like they're going beyond their authority?”
Jack Lienke:
The fight here is about three words, essentially, in Section 111 of the Clean Air Act.
In crafting these emission guidelines for the states, EPA is supposed to identify the “best system of emission reduction” for the affected source category. That's how it figures out how to set the target for the states. It's saying “we've identified what we think is the best system of emission reduction; we model how much emission reduction you would get if you used that system; you don't have to use that system, but you have to get to at least the same level as you would if you used this system that we've identified.”
In the Clean Power Plan, EPA said the best system of emission reduction for existing power plants is three building blocks.
First, improve the heat rate of your coal plants (the efficiency with which your coal plants turn coal into electricity). That doesn't get you very much.
Second, we have excess capacity at existing natural gas plants. We're using them at 60 percent of their annual capacity, but we could reasonably expect them to run at 70 percent of their annual capacity. If we assumed that you shifted generation in that way, how much would that reduce average emissions?
Third, what could we reasonably expect you to develop in terms of new renewables in the relevant grid region? If you developed that much and we shifted generation there, how much could we reduce emissions on average?
Putting those blocks together, EPA came up with a target rate for each state.
The argument here is that the only one of those that was okay was the heat rate improvements at coal plants, because you are limited to things that can happen “within the fence line” of an individual facility. Those other things aren't “systems of emission reduction.” Even though “systems of emission reduction” is a really broad term, the challengers here are saying that that can't possibly be what Congress meant.
David Roberts:
If it were true that you're restricted only to changes that you can make at your actual coal plant, you aren’t going to be reducing greenhouse gas emissions by any substantial amount. Increasing the heat rate of your coal plant is a very tiny change in emissions. Or you're going to be installing carbon capture and sequestration, which is probably going to be ruled too speculative, too expensive, and too technologically in the future to count as the best system.
Jack Lienke:
To clarify, there's a wide range of things you could do inside the fence line.
It's true that the inside-the-fence-line component of the Clean Power Plan, the heat rate improvements, was very modest. The Trump administration's ACE rule was just those heat rate improvements, and was expected to result in at best modest reductions and actually could have increased emissions. (We do economic dispatch in the electricity system, so if you make coal plants more efficient, maybe they'll get run more often and actually aggregate emissions will go up, even if the emission rate goes down.)
But there are other things you could do: co-firing with natural gas at coal plants, CCS. This came up at oral argument: it's not necessarily the case that outside-the-fence-line approaches are more stringent than inside-the-fence-line changes. You could do something really stringent inside the fence line.
David Roberts:
So the red states and the coal companies are saying that the latter two categories you were discussing exceed the authority granted by the words “best system of emission reduction.” If I'm a judge, I want to know: “Why? Says who? Based on what?” Is there an argument, textual evidence, anything beyond the bare assertion “well, that's too far?”
Kirti Datla:
There are arguments that are just about the text. I don't find them that persuasive.
As Jack mentioned, EPA sets the standard, and then the states enforce that standard and decide how to do it on the ground under the statute. So, for example, the states point to the fact that the part of the statute that talks about the states implementing these standards on the ground refers to source singular, rather than sources plural – like that is somehow an indication that it's supposed to be focused on specific sources and not considering anything beyond that.
They have other arguments that get into rules of grammar. The statute that we're talking about here, Section 111 of the Clean Air Act, has a definition section and then operative provisions. They copy and paste the definitions into the operative section and say “if you read it with all the definitions copied and pasted in, it looks like a statute that's focused on individual sources.”
I don't think they have a great answer to the idea that “system” is a really broad word. There are other parts of this same provision that expressly do require an “at the source” technological solution, so Congress could have used those words – and it didn’t.
David Roberts:
That's worth emphasizing. If it were the intention to restrict action to inside the fence line, it's easy to make that clear, right? It's been made clear in other places.
Kirti Datla:
That's right. The Clean Air Act is filled with all of these different choices of words to describe the standards or the technology to use, and it's so hard to read the statute as a whole and not realize that Congress was trying different things in different parts of the statute and that what it was trying here is broader than what it was trying in other places.
Jack Lienke:
For decades, EPA, under administrations of both parties, has been using these flexible emission reduction techniques, like trading, under a variety of Clean Air Act provisions that don't expressly authorize that sort of thing. We've done trading for vehicle fuels, auto emission standards, stationary combustion turbines, emergency generators – and courts have repeatedly said, as long as there's not an express prohibition on doing that, we're going to let you read this vague language to allow this very sensible, cost-reducing thing. Traditionally, Republican administrations were very fond of this. They love market mechanisms.
David Roberts:
Allegedly, conservatives love flexibility, and the whole reason the Clean Power Plan was as complex as it was is that the administration bent over backward to maximize flexibility at every stage. You would think it would be exactly what Republicans want.
Kirti Datla:
One odd part of the West Virginia-led coalition's argument is that because the same words “standard of performance” and “best systems of emission production” are used all over this statutory provision, not only does EPA have to focus on rigid, at the source, command and control-type technologies, but the states don't have any flexibility when they're implementing those regulations.
That's why at argument you saw the coal companies disagree with West Virginia about that weird consequence of the arguments in this case. They were like, “no, states still have flexibility, because you can interpret other words to allow it.”
Which is a real indication that as a policy matter, this is such an inefficient, cost-ineffective way of doing this statute.
David Roberts:
If the petitioners succeed here, the effect will be to make regulation narrower, less flexible, more expensive, and less efficacious, which is yet another irony.
Jack Lienke:
One possibility is that the Supreme Court could still decide ”oops, don't want to decide this case.” They could dismiss it as improvidently granted: “yes, we agreed to hear the case, but now we realize this is definitely an advisory opinion and we don't do that. There's no rule in place, so we're just going to wait for the Biden administration to actually develop its replacement for ACE, and then inevitably someone will sue and say it's illegal, and then we'll weigh in, because that's how we do things at the court.”
David Roberts:
If they decide after all not to take the case, the practical effect will be the Biden administration will come up with some new EPA scheme, and then they'll sue again, and eventually we'll be back to the Supreme Court years in the future.
Jack Lienke:
But at that point, the court would have the benefit of knowing what EPA actually chose to do, so we wouldn't be speculating – is CCS okay, is co-firing okay, is the trading okay if it's just between fossil fuel plants and doesn't involve renewables? The agency would have done something and the court could then say thumbs up or thumbs down.
David Roberts:
Conservative judicial philosophy would say you don't want judges telling EPA how to interpret rules. By and large, the whole point is restraint – that we're not going to step in unless somebody crosses some crazy line. This is really close to just inserting themselves into EPA’s rulemaking.
Jack Lienke:
I was looking today at a letter that the first chief justice of the Supreme Court, John Jay, wrote to George Washington in 1793. The Washington administration asked for some advice on how to interpret a treaty and John Jay said “oh, sorry, we don't do that. That's not a thing.” This is a well-established principle. So dismissal is a result that could still happen here, and would not be unprecedented by any means.
David Roberts:
Another possible outcome is that the court doesn't move on to the two more broad questions that we're going to discuss, and they just rule narrowly to affirm West Virginia's view of the fence-line question: “all we're going to say about this case is it's got to stay within the fence line when EPA makes a new rule” and nothing else.
Jack Lienke:
That could happen. The Trump rule said “we have to repeal the Clean Power Plan because the Clean Power Plan was illegal. Turns out ‘system of emission reduction’ unambiguously does not include outside-the-fence-line stuff, so we have no choice but to repeal this rule.”
They could have done something different. They could have said, “this is ambiguous, and we as an agency are generally given discretion to interpret ambiguous statutory provisions.” When a statute is ambiguous, courts will defer to the agency’s choice so long as it's reasonable.
But that would have allowed a subsequent administration to adopt a different interpretation. What they wanted to do was forever shut that down and say “no, we're going nuclear here. We're saying this statute unambiguously precludes what the Clean Power Plan did.” And the decision below, what the DC Circuit said, was “that’s not right.”
So the Supreme Court now could say “no, actually, that was right. We're basing that on the text of the statute. All we're doing is using traditional tools of statutory interpretation, and we're not talking about the major questions doctrine, and we're saying the Trump administration was right, ‘best system of emission reduction’ doesn't mean outside-the-fence-line techniques.”
David Roberts:
Let's move on past the fence line to the bigger questions involved. The second is called the major questions doctrine. This is the idea that if Congress wants something big and significant done, it needs to say so. It's not permissible for an agency to interpret a statute so broadly that the agency ends up making the decision to do something big and consequential. The agencies cannot address major questions themselves, they need to wait for guidance from the legislature.
First off, can you point me to the location in the Constitution where it says “agencies may do minor or medium things but not major things?” Is there constitutional text to support this doctrine at all?
Kirti Datla:
No.
David Roberts:
So major questions is not meant to be a constitutional question.
Kirti Datla:
No. Well, who knows what major questions is – and I say that not that flippantly.
First, it's worth mentioning that the phrase “major questions doctrine” is some good PR, because “doctrine” implies ”this is so well-entrenched, we've been doing this for ages, everybody knows this to be so” – and that's just not the case.
If you look at the set of cases that are being cited in the briefs, it’s really only a couple of lines in these cases, so we're already kind of grasping. Like Jack mentioned, the normal rule is: you take the statute, you read it, you try and figure out what it means, and if it's unclear at the end of the day, courts generally will defer to the administrative agency’s view about what the statute means. Because they do this all the time, it's their day job, Congress probably wanted it to be that way – there are all sorts of reasons.
The major questions line of cases started when some people on the court were uncomfortable with that idea of deferring to the agency. There were a couple of cases where the court basically said “this is too big to defer.”
One of those cases is a statute about companies having to file their rates with an administrative agency that then they couldn't exceed. The agency said “my ability to modify that requirement counts as the ability to exempt somebody from that requirement,” and the court said “that doesn't make any sense as a matter of statutory text, and also, it's a really big interpretation that would change the meaning of the statute, so we're not going to defer to you.” Then it just interpreted the statute and said, no dice.
That's what all those cases have the flavor of. But that's just, instead of the agency interpreting the statute, the court’s interpreting the statute. The phrase “who decides” comes up in a lot of these cases. That literally was a “who decides” issue.
As it's being offered in this case, it's a rule that if the court thinks that the agency is addressing a problem of economic and political significance, then Congress has to have written the statute super clearly to reassure the court that it really meant for the agency to do that. And that's just not how these sentences in the cases have been doing this. It wasn't until the eviction moratorium case and the vaccine cases on the court’s shadow docket that it was used in this way, in any clear, obvious sense.
It's a pretty big sea change. One reason this is so odd is, it's this new rule, and it's telling Congress how to write statutes. But we have all these statutes on the books that Congress has already written, unaware of this rule that was going to be developed in 2022. So it's an odd duck.
David Roberts:
Also, the Clean Air Act legendarily is written in a way that grants wide latitude to the agencies. The structure of the law is basically: Americans deserve clean air, EPA should identify anything that makes it dirty and get rid of it. That is, by nature, expansive. So even if Congress had this rule in mind, how can you write a rule saying “we want clean air for now and forever, even though science will continue to develop and find new dangers and technology will continue to develop?” How could they have possibly written the rule to anticipate anything that would count as major? I don't even know how Congress would do that if it was aware of the rule.
Kirti Datla:
As you're pointing out, this is a fiction about the theory of how this would all shake out in practice. In the Clean Air Act, in the Clean Water Act, these big environmental statutes, Congress wrote forward-looking, capacious, technology-forcing statutes that were designed to be adaptive, because command and control is inefficient and doesn't work.
It’s really an impossible fit between statutes that give agencies and the EPA that kind of authority, and this view that ”I don't know, the briefs don't say what Congress should have done here.”
I think they want Congress to have said “EPA can use generation shifting when setting standards of performance.” As you just said, David, that's not how Congress writes statutes. Nor is there any good reason for why Congress should have to write statutes that way.
David Roberts:
The whole point of expert agencies is that they're experts on questions like this in a way that Congress isn't. These rules from the 60s and 70s – the Clean Air Act, the Clean Water Act, the Endangered Species Act – are written to be adaptable to circumstances and to grow and evolve to achieve their goals.
Conservatives have always hated them for exactly that reason. They've never been able to get democratic support for overturning or changing the rules, so they've been searching for decades for some way to go after and thwart these rules. It doesn't seem like a big secret what's going on here.
Jack Lienke:
Well, they haven't always hated these laws. The Clean Air Act was passed by a nearly unanimous Congress in 1970, the Clean Air Act amendments of 1977 were passed by a huge bipartisan majority, and the Clean Air Act amendments of 1990 were pushed by George H.W. Bush and, again, passed by a huge bipartisan congressional majority. So actually, these hugely ambitious statutes were the product of both parties’ interest in intentionally granting pretty sweeping powers to EPA to address new threats, and use new technology and new systems to do it.
Absolutely, the politics of environmental protection have only gotten more partisan over time – but these aren't Democrat statutes. The Clean Air Act was literally almost unanimous, I think there was one abstention. And the provision that we're talking about was part of that 1970 act.
David Roberts:
A conservative might say “yes, I supported those laws and the updates to those laws, because they are addressing criteria pollutants. But once you move to greenhouse gases, you're moving to something that's ubiquitous in society, that involves the entire economy, not just power generation or transportation.” Do you buy the argument that going from criteria pollutants to greenhouse gases crosses over into a major question? Does that seem plausible to you?
Kirti Datla:
One reason the answer might be no is that the Supreme Court said the answer is no. In Massachusetts v. EPA, the George W. Bush administration said “we can't regulate greenhouse gases under the Clean Air Act, because unlike all those other pollutants, this would be a change in the statute and it would have tons of effects.” And the Supreme Court, in a 5-4 case, said “no, the fact that Congress used the broad term ‘air pollutant’ doesn't mean anything other than it used a broad term and it wrote a broad statute.”
All the same cases that are being cited now are cited in that case, and the court basically brushed it aside. Frankly, the only thing that's changed since that decision is that the court has changed a lot.
David Roberts:
Would a possible outcome here be the court reversing the ruling in Massachusetts v. EPA? Or are they going to try to craft something that can at least facially be seen as commensurate with that ruling?
Kirti Datla:
Nobody's asking them to do that in this case, thankfully, and I don't think they need to. Because in other cases since Massachusetts v. EPA, like one called Utility Air, the court has basically said that even if you accept that EPA has the authority to regulate greenhouse gases under the Clean Air Act, the way it can do that under different provisions might be different than the way it regulates other air pollutants. In the Utility Air case it restricted the scope of EPA’s authority compared to its authority over other pollutants. This case is potentially another iteration of that, where there are greenhouse gas-specific ways that the Clean Air Act works.
David Roberts:
So what would a ruling based on the major questions “doctrine” look like?
Kirti Datla:
The justices were asking exactly that question. Different justices, including Justice Thomas, including Justice Kagan, were asking, how does this actually work? Because the litigants are just throwing a bunch of factors at the court and hoping that somebody agrees with them that this is a major question.
Question number one is, what question are we considering whether or not it's major? I don't think that is clear. West Virginia says the question is inside-the-fence-line or outside-the-fence-line – but then all the factors are about the amount of money involved, whether it's “transformative” (I don't know what “transformative” means), whether it’s a new claim of authority, whether there are new entities covered, whether this is outside EPA’s lane, the amount of public attention.
All of those are super malleable and in the eye of the beholder. You can write an opinion that says it's “major” based on any of that, but you could just as easily write an opinion the other way.
When the EPA issued the Clean Power Plan, there was an assessment of how much it would cost and how much change it would have – but as Jack pointed out, in the end, it wouldn't have cost all that and wouldn't have had such effects, because that's what happened anyway without the rule. There are so many reasons why it's odd for the Supreme Court, or any court, to be considering how expensive something is when it's interpreting a statute, but one of them is, that's probably not easy to get right at the outset, and the court doesn't have economists on staff.
It's so antithetical to everything that I was taught about how to interpret statutes.
David Roberts:
If the court had ruled back in 2016 that this was a major question, they would have been very clearly and brutally rendered wrong by subsequent events. It's completely unambiguous at this point that it was not major – it turned out to be super cheap and to happen anyway, without any rule.
You would think the court might look at that and think “well, maybe when it comes to complex economic issues around pollution, we don't know whether it's major or not, and we're not equipped to figure that out.” You might think judicial restraint would suggest that they shouldn't be guessing about what is and isn't major.
Jack Lienke:
This is also true for a lot of the other factors that the petitioners push here. They imply that the agency's power to do something can shift over time. It's like this year it’s legal, next year it’s not legal – because this year it’s expensive, next year it’s not.
They also cite things like the controversy around the Clean Power Plan. So if you did it and it wasn't controversial, it would be okay, but if someone does a big PR campaign to gin up controversy around it now it's not okay.
And number of comments filed; what the president said about it in press conferences; even the idea that you can't do something that's too novel. It implies that when a statute is first passed, the agency’s lane is really broad, it can do a lot of things – but then, as it makes some choices, the lane narrows and it loses the ability to do those other things. Well, when does it lose it? Is it after the first administration that got to implement the Clean Air Act, or the second? It’s just completely unworkable.
David Roberts:
There's no settled doctrine here about what is and isn't major, and there are a million practical difficulties in a set of judges deciding what is and isn't major. Tell me if you think this is too cynical, but the whole major questions ”doctrine” looks to me like a court that has a conservative majority, that they know is going to be a conservative majority for decades, saying “we delegate to ourselves the power to strike down laws we don't like and rules that disagree with our political preferences.” It’s just a carte blanche for them to impose political preferences, is it not?
Kirti Datla:
I don't want to attribute intentionality to any part of this. But it is a true fact that the chief justice, in a famous dissent in a case called City of Arlington, and Justice Gorsuch, in his Gundy dissent, have basically said that as a matter of policy, it's anti-democratic when agencies have too much authority.
It's also a true fact that the major questions doctrine is inherently deregulatory, because when the agency tries to do something new, or big, the court assumes that it can't do that – but it doesn't work the other way around. If the agency says “I can't do something big, so I'm not going to regulate,” there's no major questions attack on that.
Those two things are true. Anybody can draw whatever conclusions from that. But I do think all of this is working in the same direction.
Jack Lienke:
Regardless of whether this case is ultimately decided and whether the major questions doctrine plays a role in this decision, you can count on this kind of argument coming up over and over in lower courts in every challenge to everything the Biden administration tries to do.
A district court in Louisiana recently enjoined the entire federal government from using the social cost of carbon metric. Major questions came up in that decision, the idea being that departing from the discount rate traditionally used in agency cost-benefit analyses – usually you use 3 and 7 percent rates; the social cost of carbon uses 2, 3, and 5 percent – implicated the major questions doctrine. It is a big deal to use a different discount rate in your cost-benefit analysis.
Kirti Datla:
It's also come up in the Federal Energy Regulatory Commission issuing guidance on how it's going to consider greenhouse gases in its work. Part of me wonders if this is just a climate change rule. Maybe that's the limit on the major questions doctrine – it applies to Covid cases and climate change cases. You know, tiny problems.
David Roberts:
Explain to me what nondelegation means and how it relates to major questions. My understanding is that if the Supreme Court wanted to go truly nuclear in this case, nondelegation is where they would focus. Tell us what that means and what's at stake there.
Kirti Datla:
As you hinted at, there are two justifications for the major questions doctrine. One is “as an empirical matter this is true that Congress doesn't intend to give agencies this kind of authority, so we're just going to assume that's not what it did.”
The second version of it is like an avoidance canon of interpretation, or a rule that says “we have to read the statute this way to avoid a nondelegation problem.” There are different versions and different justifications for the nondelegation doctrine, but it basically says “because Article One of the Constitution says that the legislative power is vested in Congress, Congress can't give that power away to anybody else.” It was used twice in 1935 to strike down parts of New Deal legislation, and hasn't really come up since.
David Roberts:
It was also a hyper-conservative court that did that, right?
Kirti Datla:
Similar in the sense that it was skeptical of the project of expansive agency authority to address pressing problems.
It really hasn't been a thing, probably precisely because, like the major questions doctrine that we've been discussing, it's so hard to say – what is giving away too much power? What's the line? How do we enforce it?
One reason the courts haven't enforced it is because it's too hard to find any sort of justifiable line. It's worth pointing out that the court has rejected a nondelegation challenge to the Clean Air Act itself, in an opinion by Justice Scalia. Whitman v. American Trucking challenged the NAAQS, the national ambient air quality standards provision of the Clean Air Act, which basically tells EPA to regulate pollutants that it decides are harmful. The court considered a nondelegation challenge to that statute and said there isn't one, because there's sufficient guidance in it to what the agency is supposed to do.
The statute here tells the EPA: consider the costs, consider the effects on energy consumption, consider the effects on the environment, consider what's been achieved. There are all sorts of guardrails here. It's hard for me to see how it would be compatible applying the major questions doctrine, or going even further and applying the nondelegation doctrine (which I think is not really on the table), and saying “this statute goes too far” when there's Supreme Court precedent saying a very similar statute that is arguably broader does not go too far.
Jack Lienke:
In terms of the constraints that are built into this statute on the agency's discretion, this came up at oral argument. The West Virginia solicitor general was arguing that if you let EPA do this generation shifting, there's no limit to it – it could completely ban coal, it could completely ban fossil fuels. Some of the justices pushed back and said “there are these other factors in the statute: EPA has to consider cost in picking the best system, it has to consider energy requirements.” And the West Virginia SG said “but with a problem as big as climate change, the obligation to consider cost isn't really a constraint, because anything could be justified,” which I think is a hilarious concession.
Then Justice Alito picked it back up and made a similar point later in argument: if climate change really is an existential threat, are these really constraints? Couldn't you justify doing anything?
The implication there is that it's not just that agencies can’t do big things, but that agencies can't do small things to tackle big problems – because if we let them do even small things, they might get ideas about doing bigger things.
That is terrifying to me. We can't use any authorities to address climate change, because climate change is such a big problem that if we really wanted to do something about it, we could justify a whole lot. So we can't try at all, it's illegal.
Kirti Datla:
This is going back to major questions a little bit, but Justice Alito asked “do I just look at the regulation before me (in this case the Clean Power Plan) or do I hypothesize anything the agency could do under this interpretation, and decide whether any of that is major?”
You could probably spin out any hypothetical you wanted if you're going through some doomsday scenario. It ignores, as Jack mentioned, all these guardrails in the statute. It ignores that there's this whole process in place for when agencies act. They have to propose a rule, they have to get comment on it, they have to explain themselves, it gets challenged, etc.
David Roberts:
They keep saying it’s not democratic, but in fact, the whole process is ridden with opportunities for public feedback. It's very democratic.
Jack Lienke:
And for feedback from the courts. If the agency did one of those wild things, the court could then step in and say “no, that's too far.” It doesn't have to anticipate it years in advance.
David Roberts:
Also, anticipating it years in advance seems very explicitly advisory. “Here is how you have to interpret something” is very obviously anticipating; there's no way to interpret that except as advisory.
Did we learn anything from oral arguments? Everybody's obliged to say the caveat: oral arguments might not reveal anything, they might be misleading, we can't figure anything out from them. But did you see any flags in oral arguments that might suggest where this is headed?
Kirti Datla:
I was somewhat heartened by the fact that Justice Thomas, in particular, was asking real questions about, aren't there major questions on all sides of this? Wouldn't something like carbon capture be really expensive but inside the fence line, vs. something that can be done outside the fence line that wouldn't be as major?
I wonder if maybe this isn't the case where it really makes sense to lay this down, because it's so difficult to explain why it applies here. But I might be being incredibly naive.
David Roberts:
When did Thomas start talking in oral arguments?
Kirti Datla:
He has said publicly that the fray of oral argument in person is not pleasant and not that productive, so that's his reason for not asking questions. But he's been asking questions since the court moved to recorded arguments, because the format changed. Now everybody gets a chance, basically, so he's not interrupting anyone or being interrupted. It's more civilized.
Jack Lienke:
Kirti, I agree with your assessment of oral argument. I went in expecting the worst, so was pleasantly surprised that there was skepticism expressed by some of the conservative justices about applying the major questions doctrine here.
David Roberts:
Then we're back to why they took the case. What explains that disjunct? It’s such an obviously goofy case, why did they take it?
Kirti Datla:
They have been interested in this regulation since 2016, when they stayed the Clean Power Plan in a first-of-its-kind decision. One answer is, they never got their shot to fully address the Clean Power Plan, and this is that.
The other answer is there are a lot of justices who have expressed interest in this major questions doctrine, and they haven't yet put it into a place, in a full opinion, where there was a full briefing and argument. This was teed up for them as a chance to do that, so this is their chance. They know that EPA is writing rules, so maybe some of the justices feel like it is important to step in and make sure EPA doesn't go too far.
There are all sorts of explanations that aren't necessarily based in doctrine that you can spin out for why they took the case.
Jack Lienke:
And you only need four votes to grant cert. It could be that only four of them wanted to take the case.
Kirti Datla:
Usually, the justices will get a petition for certiorari, they'll consider it, they might hold it over one time to just make sure there aren't any problems with the case, and then they'll grant it. In this case, they held it over three times, which indicates that either they couldn't get enough votes the first time around, or they really were asking some questions about these jurisdictional issues.
David Roberts:
Roberts legendarily wants to preserve the court’s reputation, doesn't want to do anything too radical, doesn't want to risk court reform, etc. But he's not in control anymore; they can get a conservative majority without him. I wonder how much that has to do with things?
Kirti Datla:
And the court has so many other big cases on its docket this term. We obviously think this case is important, but you could see a decision in this case getting drowned out a bit by guns or abortion or voting rights or anything else that the court’s talking about.
David Roberts:
Let’s review the possible outcomes here, from narrowest to broadest. The first thing they could do, obviously, is just dismiss the case, let the DC Circuit court's ruling stand based on standing. Assuming they don't do that, what's the narrowest ruling you could see here? Would the fence line be the most targeted ruling and therefore, best case scenario?
Jack Lienke:
They could rule on the fence-line issue in a variety of ways. It depends on how they write it, so even with that there's a spectrum. Like, is the problem just that there are renewables in the mix? Or is it the fact that there's any kind of generation shifting?
But I think something related to just, what counts as a system of emission reduction? “We're not looking to major questions, we're just saying, if we look at the text of Section 111 of the Clean Air Act and use our usual tools, it doesn't mean what EPA did in the Clean Power Plan. The Trump administration was right about that, ACE was legal (at least, that aspect of it), that justification for it was correct, the DC Circuit was wrong.”
That would be the narrowest version if they actually decide the case.
David Roberts:
What would a step beyond that be? What would it look like for them to make a ruling based on major questions?
Kirti Datla:
In the vaccine case, for example, they basically said “we expect Congress to speak clearly when an agency is exercising broad powers.” So it might just say “EPA is trying to exercise a broad power, it'll have to give reasons for that.”
As Jack said about the statute, there are broader and narrower ways to describe the reason why something's major. Then it can say “we're looking to see if Congress clearly authorized that, and any ambiguity in the statute means that Congress didn't authorize it.” It can stop there and not get into the rest of the endeavor of interpreting the statute.
It's worth emphasizing what Jack said earlier: this is already out there. This District Court in Louisiana, FERC – the major questions doctrine is coming up in cases, and it's going to keep coming up, frankly, regardless of what the court says in this case.
David Roberts:
If the court refrains from saying it's a major question in this case, does that settle its major question status, or does that leave open the possibility that some future lawsuit could bring the major questions question up again? Is there such a thing as precedent on what is and isn't a major question?
Kirti Datla:
I don’t want to hypothesize too much, but my guess is if they just ruled on the statute, they’d say “we don't have any need to get into major questions” and that would leave open whether or not they could bring it up in the future.
Jack Lienke:
It could come up in the context of other Clean Air Act provisions, but probably not with respect to what “system of emission reduction” under Section 111 means again.
David Roberts:
Kirti, you said they're probably not going to go all the way to some sort of nondelegation thing, at least in this case, but just for funsies, let's catastrophize. What would a nondelegation doctrine ruling look like? Would it be a specific ruling about whether this particular power can be delegated to EPA? What specific power are we even talking about? Is such a ruling possible in this case?
Kirti Datla:
Anything's possible. The reason I don't think it's going to happen is because it's in the background of this case. West Virginia does say if you interpret the statute broadly it raises a nondelegation problem, but it's not really briefed in any serious way – because, frankly, you can get very close to the same place by using the major questions doctrine. Justice Barrett asked the question “what's the space between the major questions doctrine and the nondelegation doctrine?” The answer is probably “some” but not “miles.”
There are two reasons the nondelegation doctrine is more problematic than the major questions doctrine. First, what counts as too much delegation is not a clear line, so some judges are going to see a problem more than others.
Second, the result of applying the major questions doctrine is you strike down an agency's regulation and constrain it a little bit in the future. Total hypothetical, but if there was a nondelegation problem with Section 111, the whole statute goes away. You can’t pick and choose what's acceptable; there's no as-applied version of the nondelegation doctrine. If there is a nondelegation problem under the statute, EPA can't do anything – even regulate totally uncontroversial pollutants in totally uncontroversial ways. It's a blunter tool.
David Roberts:
Major questions allows you to go after agency interpretations and agency rules, but nondelegation allows you to go after statutes, the laws themselves, right? Then you're really explicitly in a world where judges are legislating.
Jack Lienke:
It's difficult to overstate the collateral damage of invalidating Section 11 of the Clean Air Act, which is used to regulate many different source categories for many different types of very harmful pollution. And we've been doing it since the 70s, so it shouldn't be controversial.
David Roberts:
Kirti, you say that's unlikely in this case because it's not a good fit. Do you think that the court has it in the back of its head to go after nondelegation somewhere else at some point while it has this giant majority?
Kirti Datla:
We know that five of the nine justices are interested in it. Justice Gorsuch wrote a dissent in a case called Gundy where he laid out a robust version of the nondelegation doctrine that would really be “transformative,” to borrow a word from West Virginia. Justice Kavanaugh later said “yeah, it's worth thinking about whether that's correct.” That's five. There are some questions about what Justice Barrett thinks, but you have enough justices saying they're interested in this already to get to a majority opinion in some case.
One question is, if they entrench the major questions doctrine, do they even need to go all the way? There might be people who are more purists about the way they articulate their legal thinking. Justice Gorsuch will say “yes we do, because that's the right answer.” There might be people who are more pragmatist, who say “why bother when we'll get some blowback, and we can just achieve the same result?”
So there's articulated interest by five of the justices, and it's just a question of whether they'll feel the need to go there.
David Roberts:
Blowing up the majority of the modern administrative state seems like, even for a super right-wing nutball, pragmatically courting bad consequences – America is not just going to sit back and let that happen. Whereas, as you say, the major questions doctrine allows you to surgically go in and reject any rule you don't like. You get all your political preferences the same way.
Jack Lienke:
So many statutory provisions are written in much vaguer language than Section 111 of the Clean Air Act. If saying “choose the best system and consider these factors; weigh them as you see fit, but consider them” is not okay, then so many other agencies’ core mandates would also necessarily not be okay. As you say, that would destroy many of the agencies that provide vital protections in the US.
David Roberts:
If that did come to pass, the worst case scenario, would we then be going through a process where one by one statutes are brought before the Supreme Court and the Supreme Court says “nope, that's delegation, throw that out, too?” Are they going to have to eliminate the pieces of the administrative state one by one, or could they nuke it all at once? This is all quite speculative, obviously, but how would it even work if they did go nondelegation?
Jack Lienke:
I don't think you could nuke it all at once, at least under our traditional understanding of how courts work. That's not what they do.
Kirti Datla:
Even if nondelegation somehow makes its way into a majority opinion, the realpolitik of it all is that it'll only be used in cases that seem like true outliers. Because, as we talked about at the very beginning, I don't think industry wants that world. The consequence of the federal government not regulating things is often that 50 different states regulate things. There are all these knock-on effects that I'm not sure anybody wants. You could see it becoming a more robust doctrine that's used more often, but still not being used all that often.
David Roberts:
Say they leave aside nondelegation, they leave aside major questions, they just rule on the fence-line question, and they say “this is an impermissible interpretation of Section 111.” What are EPA’s options, then, for seriously tackling greenhouse gases at power plants?
Jack Lienke:
Under Section 111, you'd look to some of the things that we mentioned earlier inside the fence line. Maybe we can require coal plants to co-fire with natural gas. Maybe we can require at least some coal plants to use partial CCS, which would vary based on access to adequate storage, but there are things that could be tried. Of course, it would have to do the traditional assessment, weighing those factors that we keep coming back to – how much it costs, whether it can show that it's adequately demonstrated.
To be clear, “adequately demonstrated” doesn't mean something that plants are doing right now. It can be technology forcing; the Clean Air Act was designed to be technology forcing. It can't be entirely speculative. You can't just be crossing your fingers and hoping it's possible; you have to make the case for why it's possible.
David Roberts:
One little irony to insert here is that if Congress does get its act together and get the climate provisions of the Build Back Better Act passed, as they currently exist, one of the things in there is an enormous amount of money for tax credits for CCS projects. You can see all that money being dumped on CCS, and CCS ramping up, and then being much more demonstrated and much more plausible as the best system of emission reduction for coal plants.
Jack Lienke:
Hilariously, back in the 2005 Energy Policy Act there was some funding for CCS, and Congress attached language to that funding that said “any CCS projects that are funded with this money cannot be cited as proof that CCS is adequately demonstrated under Section 111.”
Because partial CCS is required for new coal plants, that's never happened, because no one is interested in building new coal plants. But that is on the books under 111(b), the sister provision of the one that we're talking about, which is about existing sources. Under the rule that's in effect for new sources, if someone wants to construct a new coal plant, you have to be equipped with partial CCS.
David Roberts:
It would be a delicious irony if the Supreme Court tried to restrict EPA’s range of movement on this and EPA responded “all right, well, you have to use CCS inside the fence line then.”
Jack Lienke:
That's getting us back to the point that EPA was trying to be nice in this rule! EPA went on this multi-year listening tour; there was so much stakeholder engagement. The Clean Power Plan was so many years in the making, and EPA bent over backwards to be responsive to stakeholder concerns and to design this flexible rule that reflected what the utility industry actually did in practice to reduce emissions.
They could go and do something a lot more impractical, so long as they can back it up with the analysis required by the statute. That doesn't mean that the plants would then respond by actually using that system. They might instead decide to retire or to do something else.
The only other important thing I would say about power plants is they emit a lot of other types of pollution too, and no one disputes EPA’s authority to regulate those other types of pollution. Coal plants are emitting particulate matter that kills thousands of people every year. They are emitting mercury, they are emitting other air toxics. EPA has other authorities to address those pollutants, even if the court were to constrain its authority to address greenhouse gases, and there's absolutely nothing illegitimate about addressing those other pollutants.
David Roberts:
If the Supreme Court rejects this case, decides that it was a mistake to take it in the first place and they don't want to look like clowns by making some sweeping judgment on the basis of it, that will leave the question basically undecided. If that happens, do you think Biden's EPA will design a rule that relies on outside-the-fence-line changes and just take its chances on winding up back in the Supreme Court eventually? Or will they try to act defensively, knowing that Trump might be taking over the EPA in 2024, to do something that they know will stick and that they know can get implemented? Again, you're speculating wildly here, but how do you think EPA will react if it's not restricted by this ruling?
Kirti Datla:
You don't actually have to speculate, because when EPA was telling the Supreme Court not to take this case because it didn't need to yet, it said “we're working on a new rule and we're going to take into account the fact that the Supreme Court stayed the Clean Power Plan in 2016.” Which is basically saying, we understand that this is the Supreme Court we have and that they didn't like the Clean Power Plan, and we're not going to ignore that.
I don't know the details of how that shakes out, but they've already said “we recognize that five justices of this court thought the Clean Power Plan went too far.” It's already having a deterrent effect.
David Roberts:
So we anticipate EPA issuing a rule that will not get entangled in this same fight again, no matter what the Supreme Court does.
Jack Lienke:
It’ll get entangled in a slightly different fight.
David Roberts:
Jack, based on your expertise on the Clean Air Act, do you think EPA is going to be able to create a rule that will create commensurate emission reductions as an outside-the-fence-line rule? In other words, do you think this fence-line thing is going to practically restrict what EPA can accomplish, or are there enough ways to work around it that you can end up with an equally stringent system at the end of it?
Jack Lienke:
That's an empirical modeling question. Like, if you put in co-firing for some plants and CCS for others, how much does that get you? I don’t know. You can absolutely get way more meaningful levels of reduction than the Trump administration got with its sad little heat rate improvements rule. But I'm not sure what the comparison would be between the replacement for the Clean Power Plan that the Biden administration would design if it felt like it had unfettered ability to use flexible reduction techniques like generation shifting vs. the rule that it will design knowing that the court seems skeptical of that approach.
Then there's going to be this question of, even if you stay inside the fence line for purposes of establishing the best system of emission reduction and setting the targets, do you let states use flexible things like trading and shifting for compliance? That's that tension that Kirti mentioned earlier, where the coal companies are saying “we want to be able to reallocate generation among plants, we want to be able to take advantage of emission trading – we just want EPA to pretend like we can't do that when it sets the targets.”
David Roberts:
Is it even on the table for Congress to miraculously get its act together before it loses its extremely slim majority and write a rule clarifying this such as to moot future lawsuits? Are they talking in Congress about ways to tweak the Clean Air Act to settle these questions?
Jack Lienke:
Historically when Congress has considered passing new climate legislation, like Waxman-Markey, there were demands from the right for EPA to give up some of its Clean Air Act authority in exchange – “if we're going to give you this new nationwide trading system, you have to give up your ability to regulate greenhouse gases under the Clean Air Act.” Democrats were historically not willing to make that trade. I’m not following current debates; I don't know if those sorts of discussions are happening now with respect to Build Back Better.
Kirti Datla:
I'm also not an expert on the current status of legislation. One irony of all this is that Congress could, as other folks have pointed out, legislate the major questions doctrine, but it could also go the other way. In any future statute, maybe it should be saying that the major questions doctrine does not apply.
David Roberts:
It does seem like it would be straightforward for Congress to just pass a law saying “yes, Section 111 applies to greenhouse gases, and allows for broad interpretation, and can go outside the fence line, period.” You could pass a paragraph-long statute and moot all this. I wonder why that's not a bigger part of Build Back Better or why that hasn't been a bigger part of their deliberations. I wonder if Joe Manchin doesn't want EPA to have that power.
Even if this case doesn't end up straying into major questions territory, or worse yet nondelegation territory, do you feel like this Supreme Court is eventually going to go there, regardless of whether it's this case or not?
Kirti Datla:
It already has, like we've been talking about. It's already gone there in the vaccine case. The next step is for it to say a little bit more about what it means and maybe put some guardrails on it. The fact that it has already gone there means that litigants are already using it to bring challenges based on it. Judges are already using it.
This is a huge case. It really matters what the court says about the major questions doctrine, but at a very practical level, some of the damage has already been done.
David Roberts:
Another irony here is that you constantly hear conservatives saying they want regulatory predictability and stability and they don't like frivolous lawsuits, and yet almost every aspect of this seems designed to create ambiguity and uncertainty about the future of regulation and to inspire all kinds of ridiculous lawsuits.
Thank you so much for coming on today and walking through this. Maybe after there's a ruling we can reconvene and discuss the wreckage.
Jack Lienke:
That would be great. Although I hope there's no wreckage.
David Roberts:
Thanks, Jack. Thanks, Kirti.
Kirti Datla:
Thanks for having us.
Jack Lienke:
Thanks, David.
Volts podcast: Jack Lienke & Kirti Datla on the ridiculous (but extremely important) EPA case before the Supreme Court