West Virginia v. EPA: Will the Supreme Court Defer to Chevron?

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I.     Background 

In 1970, with the establishment of the Environmental Protection Agency (“EPA”), Congress enacted the Clean Air Act (“CAA”), which marked the first step towards federal regulation of air pollution. Section 111(d) of the CAA authorized the EPA to regulate greenhouse gas emissions from existing power plants. Based on this provision, the Obama administration and the EPA promulgated the Clean Power Plan (“CPP”) in 2015, which assigned individual targets to each state for reducing carbon dioxide emissions from existing power plants. However, due to concerns that the CPP transcended the EPA’s mandate under the CAA and intruded states’ rights to regulate electric power, the Supreme Court stayed its implementation. 

In 2019, under the Trump administration, the EPA repealed the CPP before it could take effect. Instead, it issued a weaker Affordable Clean Energy Rule (“ACE”), which directed states to “set standards of performance for each plant, essentially allowing plants to decide the amount of pollution to emit.” The EPA’s own data revealed that the ACE may result in increased carbon emissions because it “created incentives to burn more fossil fuels.” Two years later, in January 2021, the D.C. Circuit Court vacated the ACE rule while holding that the rule “rested critically on a mistaken reading of the Clean Air Act.” The D.C. Circuit Court’s judgment is now under challenge before the Supreme Court in West Virginia v. EPA.

II.     Legal Interpretation of the “Best System of Emission Reduction”

Section 111(a) of the CAA requires standards of performance to reflect the degree of emission limitation achievable through the application of the “best system of emission reduction” (“BSER”). The BSER is the “best technology or other measure that has been adequately demonstrated to improve emissions performance for a specific industry or process (a source category).” In deciding the BSER, the EPA takes multiple factors into consideration, like technical feasibility, energy requirements, cost, non-air quality health, etc.

The controversy surrounding the CPP and the ACE focuses on the scope of EPA’s authority to determine the BSER for existing power plants. The CPP interpreted Section 111 broadly and considered the best system to be the one that applied to the “overall source category.” In other words, the CPP urged coal-based power plants to not only reduce their carbon emissions but also to shift to cleaner methods of generating energy that produce no emissions, including both natural gas and renewable energy. On the other hand, the ACE rule interpreted Section 111 narrowly and reasoned that the application of the BSER must be “to the source” thereby excluding control measures that shift production away from the regulated source. Thus, the Supreme Court faced two critical issues: whether Congress granted authority to the EPA to regulate greenhouse gas emissions from existing power plants and if so, whether the EPA, under Section 111(d) of the CAA, can look beyond the specific emission source itself and employ measures like generation-shifting.

III.     Major Questions and Non-Delegation

The West Virginia petitioners invoke two doctrines in support of their claims. First, they invoke the “major questions doctrine,” according to which “courts should not defer to agencies’ statutory interpretation on questions of vast economic or political significance.” This is because the “Congress could not have intended to delegate a decision of such economic and political significance” without a ‘clear statement’ of its intention. The D.C. Circuit Court rejected the petitioners’ argument by distinguishing the present case from FDA v. Brown & Williamson Tobacco Corp, where the Supreme Court held that Congress did not intend the Food and Drug Administration to regulate tobacco products.

Second, they invoke the “non-delegation doctrine,” which states that “Congress cannot delegate its legislative powers to other entities” unless it lays down by legislative act an intelligible principle to which the entity is directed to conform. The doctrine is grounded in the idea of separation of powers and American federalism. The rationale behind the major questions and non-delegation doctrines is one of congressional accountability. It is believed that “delegation to agencies enables members of Congress to evade accountability for difficult decisions.” However, according to scholars of congressional accountability who submitted the amici curiae brief in the case, the petitioners’ rationale is a legal fiction because, in practice, requiring Congress to decide more issues does not result in significantly greater accountability.

IV.     Chevron Deference

Both the major questions doctrine and the non-delegation doctrine are at odds with the Chevron deference, according to which courts should give deference to administrative agencies in their interpretation of statutory language where the statute is silent or ambiguous with respect to a specific issue. However, the court may reverse an agency action if it is “arbitrary, capricious, or manifestly contrary to the statute.” The Supreme Court was confronted with the application of the Chevron deference vis-à-vis EPA’s authority to regulate greenhouse gasses in the 2007 case of  Massachusetts v. EPA. In that case, the EPA refused to issue regulations governing greenhouse gas emissions from new automobiles. The issue was whether Congress had granted EPA the statutory authority to regulate greenhouse gasses and if so, whether the EPA’s failure to do so was consistent with the CAA. Justice Stevens delivered the opinion for the 5-4 majority. He noted that the CAA directs the EPA to regulate air pollutants that cause air pollution, which “may reasonably be anticipated to endanger public health or welfare.” Because emission of greenhouse gasses may cause harm to the public, he concluded that the EPA’s refusal to regulate them was “arbitrary, capricious, or otherwise not in accordance with the law.” Justice Scalia dissented and reasoned that the court should give considerable deference to EPA’s judgment pursuant to the Chevron doctrine.

V.     The Upshot

An adverse judgment in West Virginia v. EPA could present potential concerns for federal climate change policy and result in the weakening of the modern administrative state. First, the Supreme Court could overturn its previous judgment in Massachusetts v. EPA, which will preclude the EPA from regulating greenhouse gasses and consequently, invalidate all previous EPA rules regulating greenhouse gas emissions. Second, considering the conservative majority in the Supreme Court even after Justice Stephen Breyer’s retirement, the Court may revive the non-delegation doctrine. Third, the Court, after exploring the boundaries of Section 111(d) of the CAA, may uphold the ACE rule — i.e., limit the application of the BSER to the source of the emission. Last, in the absence of a clear statement from Congress, the Court might apply the major questions doctrine and conclude that these are decisions of vast economic or political significance. In effect, this would mean that the Court found no ambiguity in the statute and refused to apply the Chevron deference.

After the D.C. Circuit vacated the ACE rule, the Biden administration issued no new rules on greenhouse gas emissions from power plants. Consequently, the Supreme Court granted cert in the present case and will now “issue an opinion against a possible future rule.” To conclude, there is no doubt that West Virginia v. EPA will have far-reaching implications on the limits of congressional delegation of rulemaking authority to federal agencies. Considering that “world leaders at the G20 summit are debating how to slow global climate change,” the case will also reflect America’s foreign policy on environmental protection. 

About the Author: Gursehaj Singh is a dual degree LL.B./J.D. candidate at Cornell Law School. He is originally from New Delhi, India. Prior to joining Cornell Law, he attended Jindal Global Law School, where he pursued a bachelor’s degree in business administration and law. He will be joining the New York office of White & Case LLP next year as a 2022 Summer Associate.

Suggested Citation: Gursehaj Singh, West Virginia v. EPA: Will the Supreme Court Defer to Chevron?, Cornell J.L. & Pub. Pol’y, The Issue Spotter, (March 22, 2022), https://live-journal-of-law-and-public-policy.pantheonsite.io/west-virginia-v-epa-will-the-supreme-court-defer-to-chevron/.