Supreme Court’s Unusual Decision to Hear a Coal Case Could Deal President Biden’s Climate Plans Another Setback

Just as it became clear that President Joe Biden could not get Congress to agree to a Clean Electricity Payment Program, the Supreme Court announced it would hear a case that could prove just as big a setback in his plans for climate action.

The case brought by the coal industry and a coalition of red states resurrects an argument they have been making for years: that the U.S. Environmental Protection Agency can’t impose major changes on the nation’s energy system without explicit authority from Congress. The foes of climate policy now will have their chance to make their case before a high court majority that is deeply skeptical of the authority of federal regulatory agencies.

With Congress so far unwilling to act on Biden’s $150 billion plan to rein in the greenhouse gas emissions from electricity, especially from coal, with incentives for utilities that switch to wind and solar power, the president now faces the prospect of new Supreme Court-imposed limitations on the EPA’s ability to act under current law.

“This is a one-two punch,” said Richard Lazarus, a professor at Harvard University who has argued numerous environmental law cases before the Supreme Court. “The timing was not good—to have the budgetary stuff not happen in Congress, and then for the court to basically say, ‘By the way, we may be willing now to slam the door on anything else you’re thinking about doing.’”

And it all happened just as Biden was heading to Glasgow, where he hoped to show those gathered for United Nations climate talks that the United States was serious about action.

Experts believe Biden still has options for tackling greenhouse gas emissions from the power sector; indeed, Lazarus believes that the EPA—which is still working on new rules to cut carbon emissions from electricity—likely had already factored in the probability that the Supreme Court would be hostile to anything resembling the approach President Barack Obama took in his signature climate policy, the Clean Power Plan. 

Still, it is more evidence that even though surveys show that more than two-thirds of Americans favor strict limits on carbon dioxide pollution from power plants, Biden is in a fight with a political system geared to favor the fossil fuel status quo.

Another High Court Climate Surprise

The Supreme Court’s move last Friday to take the climate case was surprising, since the suit led by Westmoreland Mining, North American Coal and the states of West Virginia and North Dakota involved a defunct Trump administration regulation. 

The so-called Affordable Clean Energy Rule, purportedly designed to control greenhouse gas pollution from the power sector, would have reduced emissions less than 1 percent and was struck down by the U.S. Court of Appeals for the D.C. Circuit the day before Biden’s inauguration. Biden’s EPA has made clear to the court it has no intention of reviving the ACE rule or the Obama Clean Power Plan, but instead will pursue a different approach with new regulations.

“We all expected the Supreme Court wouldn’t jump in until those regulations were final, so they could react to something concrete,” said Michael Gerrard, founding director of the Sabin Center for Climate Change Law at Columbia University.

Jeff Holmstead, an energy industry lawyer with the firm of Bracewell and a former top official in President George W. Bush’s EPA, told POLITICO he thinks it is the first time that the Supreme Court has taken a case in which a lower court has struck down an EPA rule that the EPA itself, under a new administration, is not seeking to defend.

But it is the second surprising Supreme Court move regarding a climate action plan for the power sector. In February 2016, the Supreme Court in a 5-4 vote issued an unprecedented stay of Obama’s Clean Power Plan while it was still being reviewed by a lower court.

Now, by taking up the questions raised by the coal industry and red states before new regulations are finalized, the Supreme Court is in the position of potentially issuing what amounts to “an advisory opinion” for the Biden administration. The Supreme Court has long held that the Constitution bars federal courts from issuing advisory opinions.

That may be why the Supreme Court discussed the climate case at four separate meetings this fall before deciding to hear the case, according to the court docket. Court-watchers think it signals at least some hesitation over taking the case, even in the Republican-appointed majority of the court.

“They obviously had trouble getting four votes,” the number necessary to grant a petition to hear the case, said Lazarus. “Somebody had to be convinced.”

A Court Majority Skeptical of Agency Actions

That may be the only good news for Biden, because at least three members of the court have made quite clear that they are sympathetic to the arguments of the coal industry and its allies that federal agency actions on issues of “vast ‘economic and political significance’” should be subject to heightened scrutiny from the courts. This so-called “major questions” doctrine was articulated by the Supreme Court in a 2000 case striking down the Food and Drug Administration’s authority to regulate the tobacco industry.

In a paper earlier this year for the American Constitution Society, Gerrard argued that the “major questions” doctrine is inherently conservative, favoring the status quo. “If the courts say that agencies may not act on a big problem without specific congressional authorization, and Congress is paralyzed (as it has been with climate change for decades), everything is frozen,” Gerrard wrote.

Before Justice Brett Kavanaugh rose to the Supreme Court, he had an opportunity to speak at length on the major questions doctrine—as a judge on the D.C. Circuit Court of Appeals during the October 2016 oral arguments on Obama’s Clean Power Plan.

“When an agency claims to discover in a long extant statute an unheralded power to regulate a significant portion of the American economy, we typically greet its announcement with a measure of skepticism,” Kavanaugh said during the arguments. “We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast economic and political significance.”

Kavanaugh never had a chance to deliver his opinion in that case, since it was rendered moot when Trump took office and repealed the Obama regulation. In the new Supreme Court case he faces essentially the same question. “My guess is that he already has a draft opinion,” Lazarus said.

Justice Neil Gorsuch is best known for his opposition to a doctrine that has long guided federal jurisprudence on agencies. It holds that judges should defer to agencies’ interpretations of federal law in cases where the law is “ambiguous” and the agency’s position seems “reasonable.” Gorsuch has called this approach an “abdication of judicial duty,” and has said judges should declare agency actions invalid if they are inconsistent with the judge’s interpretation of the law. Gorsuch has said his views on decision-making in the nation’s capital were shaped by witnessing the struggles of his mother, Anne Gorsuch, who as President Ronald Reagan’s first EPA administrator was forced to resign amid multiple scandals.

Justices Clarence Thomas and Samuel Alito have been consistently skeptical of agency authority. But it is less clear where Justice Amy Coney Barrett and Chief Justice John Roberts would come down. Roberts clearly agrees with the “major questions” doctrine—he applied it in the 2015 majority opinion he wrote on Obama’s Affordable Care Act. However, he used it to uphold the provisions of the law that were at issue in that case; even though he concluded the language was “ambiguous,” he found Congress’ intent was clear in the structure of the law.

Narrow Argument Doesn’t Affect Other Authority, Options

The coal case now before the Supreme Court does not challenge the EPA’s authority to regulate greenhouse gases as a pollutant under the Clean Air Act, which the Supreme Court established in the 2007 case Massachusetts v. EPA and reaffirmed in subsequent cases. 

Therefore, the case does not put Biden’s plans for tougher car and truck greenhouse gas standards in danger, since the Clean Air Act addresses pollution from vehicles explicitly. Biden’s new proposal for sweeping methane regulations for the oil and gas industry, announced earlier this week in Glasgow, likewise would not be affected by the Supreme Court’s decision. The methane rules clearly would be “performance standards” under the plain meaning of the law. But without new law from Congress, carbon emissions from the power sector have been a unique problem for the EPA, because the solution involves not getting coal plants to perform better, but getting the entire electricity sector to use less coal.

Holmstead, the energy industry lawyer, has said the Supreme Court’s decision to take the case will make it difficult for the Biden administration to move forward with new power sector regulations before the court has ruled.

But others point out that the case centers on only one section of the Clean Air Act—performance standards for stationary sources of pollution. There are other approaches that the EPA could take to regulate coal plants, including the stricter standards on ozone pollution that the Biden administration last week told a federal court it was pursuing, which would have the indirect effect of curbing carbon dioxide. EPA also regulates the waste of coal combustion—coal ash—one of the nation’s largest waste streams, which environmental advocates have long urged the EPA to control more aggressively because it contains arsenic, mercury and other toxic substances.

“If you declare coal ash a hazardous waste… you change the economics of coal,” said Lazarus, the Harvard professor. “Those coal-fired power plants may find out they need another fuel source.”

Oral arguments have not yet been set for the climate case.

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