Clean Air Act

Environmental Defense v. Duke Energy Corporation

The Clean Air Act (CAA), which is enforced by the Environmental Protection Agency (EPA), regulates the release of air pollutants. Since its enactment in 1963 the CAA has been amended by Congress several times to strengthen its regulatory powers. The regulation of power plant emissions has been a major component of EPA oversight because coal has been the fuel of choice for most power plants. Despite statutes and regulations that seek to define the scope of environmental oversight, energy producers sometimes run afoul and trigger legal controversies. Such was the case in Environmental Defense v. Duke Energy Corporation, __U.S.__, 127 S.Ct. 1423, __L.Ed.2d __ (2007), where the U.S. Supreme Court held that the EPA could interpret the word "modification" differently in two sets of air quality regulations. In addition, a power company seeking to force a uniform interpretation of the word was essentially challenging one of the regulations. This approach was not acceptable because challenges to regulations must be addressed within 60 days of the rulemaking in a specific circuit court of appeals.

Duke Energy Corporation operates 30 coal-fired power plants in North and South Carolina which provide power to over two million people. Beginning in 1988 Duke Energy started to modernize more than 24 of these unites. They were refurbished and the central sections of the generators were either rebuilt or replaced. The modernization was long overdue for some of the equipment, which had gone into operation in the 1940s. Between 1988 and 2000 the company updated the boilers to extend the life of the units and to allow them to run longer each day. The EPA filed a lawsuit against Duke Energy in 2000, alleging that the company had not obtained EPA permits and that the modernization program violated a 1977 amendment to the CAA known as the Prevention of Significant Deterioration or PSD. Under the PSD a permit is required before a "major emitting facility" can be constructed; modification of a facility was included in this requirement. Following the enactment of this amendment the EPA issued PSD regulations which limited the need for a review and permit to any "major modification." This was defined as a change in the method of operation that would result "in a significant net emissions increase of any pollutant subject to regulation under the Act." Complications arose because the CAA contained an earlier amendment entitled New Source Performance Standards or NSPS. Under NSPS regulations the word "modification" had a different meaning. A source would not need to use the best pollution-limiting technology if the modification would not increase the rate of discharge of pollutants measured in kilograms per hour.

Duke moved for summary judgment, contending that none of its projects were "major modifications" requiring a PSD permit because none increased hourly rates of emission under NSPS. The EPA and a group of environmental organizations that intervened in the lawsuit contended that the increased use of the units, which can more hours per day, contravened the language of the PSD regulations. The district court ruled in favor of Duke Energy and the case moved to the Fourth Circuit Court of Appeals. The appeals court upheld the lower court, finding that identical statutory definitions of the term "modification" in the NSPS and PSD provisions "mandated that this term be interpreted identically" in the regulations for these two provisions. Therefore, the PSD regulations must use an increase in the hourly rate of emissions as its guide for determining whether a permit is required.

The Supreme Court, in a unanimous decision, overruled the Fourth Circuit. Justice David Souter, writing for the Court, concluded that the appeals court's effort to harmonize the two statutes and sets of regulations and "trim the PSD regulations to match their different NSPS counterparts can only be seen as an implicit declaration that the PSD regulations were invalid as written." This approach was in error for several reasons. First, he pointed out that a given term in a statute may take on a different character when associated with "distinct statutory objects calling for different implementation strategies." Contrary to the appeals court, there was no "irrebuttable" presumption that the same defined term in different provisions of the same law must be interpreted identically. The PSD regulations use of the term "major modification" clearly was not defined to mean an increase in hourly emissions rate. On its face the PSD regulations did not specify a rate, "merely requiring a physical or operational change that would result in significant net emissions. Justice Souter held that the Fourth Circuit's equation of the NSPS and PSD regulations served as "an implicit invalidation" of the PSD regulations. This was incorrect because judicial review of CAA regulations is limited during enforcement proceedings when review could have been obtained by Duke Power in the Court of Appeals for the District of Columbia within 60 days of EPA rulemaking. Therefore, the case was remanded to the district court for further consideration.

Massachusetts v. Environmental Protection Agency (EPA)

The prospect that human activity has significantly contributed to an increase in "greenhouse gases," which, in turn, causes global warming, has suffered from less-than-convincing consensus over the years. It has only been since 2006–2007 that at least a clear majority of respected scientific opinions has so concluded, despite the existence of impressive data supporting that conclusion for at least two decades.

In Massachusetts v. Environmental Protection Agency (EPA), No. 05-1120, 549 U.S.___ (2007), the U.S. Supreme Court was asked to determine whether the U.S. Environmental Protection Agency (EPA) had the statutory authority to regulate greenhouse gas emissions from new motor vehicles; and if so, whether EPA's stated reasons for declining to act were consistent with the statute. In a narrow 5-4 landmark decision, the Court found that gases which cause global warming were pollutants under the federal Clean Air Act; that EPA did indeed have the statutory authority to regulate them; and that it had acted arbitrarily and capriciously in refusing to exercise that authority.

This long-winded controversy centered on Section 202(a)(1) of the Clean Air Act, specifically, 42 USC §7521(a)(1), which states in relevant part:

The [EPA] Administrator shall by regulation prescribe (and from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare …

The Act defines air pollutants to include "any air pollution agent … including any physical, chemical … substance … emitted into … the ambient air." [§7602(g)].

In 1999, various environmental groups filed an administrative "rule-making" petition formally requesting that EPA establish standards for motor vehicle "greenhouse gas" emissions (primarily carbon dioxide and other heat-trapping gases). Four years later, in 2003, the EPA denied the administrative petition, stating that it lacked authority to regulate such gases. It argued, in part, that carbon dioxide and other greenhouse gases were naturally occurring substances in the atmosphere and therefore did not constitute "air pollutants" within the meaning of the Clean Air Act. Further, even if it did have authority, arguendo, it would discretionarily decline in favor of voluntary programs and further research. The EPA noted that a causal link between greenhouse gases and increased global surface temperatures had not been dispositively established. Therefore, such a piecemeal approach would conflict with the President's more comprehensive environmental package, which included non-regulatory private-sector voluntary reductions and technologically innovative research into other climate-change alternatives.

Next, the State of Massachusetts joined the original petitioners as an intervening party and sought review of EPA's administrative decision in the Court of Appeals for the D.C. Circuit. Although each of the judges wrote a separate opinion, the ultimate decision let stand the EPA's decision and denied appellate review. The U.S. Supreme Court granted review (certiorari ).

In response, the EPA, joined by ten intervening states and six trade associations, argued that the Supreme Court first needed to address whether the petitioners even had legal standing to invoke the Court's jurisdiction. The Court agreed. In order for the petitioners (at least one) to have standing, there needed to be a justiciable controversy under Art. III of the U.S. Constitution, which means that petitioners needed to show that they suffered particular injury (actual or imminent) because of EPA's actions (or failure to act). The Supreme Court found that the petitioners did have standing, particularly Massachusetts, as Congress had ordered EPA to protect Massachusetts and other states; and that EPA's refusal to regulate greenhouse gas emissions presented a risk of actual and imminent harm. This preliminary question being resolved in favor of petitioners, the Court went on to address the case on its merits.

The Court found that greenhouse gases fit well within the definition of "air pollutants" contemplated by the Clean Air Act. Therefore, EPA does have the authority to regulate them. Even though regulating motor vehicle emissions may not by itself reverse global warming, this does not mean that the Court does not have jurisdiction to decide whether EPA has a duty to act to slow or reduce it.

Next, the Court noted that under the Act's clear terms, EPA can decline to promulgate regulations only if it determines that greenhouse gases do not contribute to global climate change, or if it provides explanation as to why it cannot or will not exercise its discretion to determine whether such gases do contribute to climate change. If scientific uncertainty prevents EPA from making such a determination, it must state so. It had not. Nor did the Court find EPA's other arguments persuasive, for example, that regulation of motor vehicle carbon dioxide emissions would require it to tighten mileage standards, which was really the purview of the U.S. Department of Transportation. The Court held that even if there was overlap in responsibilities, EPA may not shirk its duty to protect the public health and welfare under the Clean Air Act. Having found EPA's responsive reasons less than acceptable, the Court held that EPA had acted arbitrarily, capriciously, or otherwise not in accordance with law [§7607(d)(9) of the Act]. Accordingly, the Court remanded the matter for EPA to specifically articulate plausible reasons for its action or inaction.

Justice Stevens delivered the opinion of the court, in which he was joined by Justices Kennedy, Souter, Ginsburg, and Breyer. Chief Justice Roberts filed a dissenting opinion, joined by Justices Scalia, Alito, and Thomas. The dissent addressed the justiciability issue, arguing that the Court used "the dire nature of global warming itself as a bootstrap for finding causation and redressability." Since domestic automobile emissions are but a miniscule part of global greenhouse gas emissions, linking those emissions to Massachusetts' alleged injury was "far too speculative to establish causation."

Justice Scalia also filed a separate dissenting opinion, joined by the same dissenting justices. Justice Scalia addressed the substantive merits of distinguishing air pollutants from air pollution agents. However, he ended his dissent by noting that this was a straightforward administrative-law case for which Congress had given broad agency discretion. No matter how important the issue of global warming, said his dissent, it was not incumbent upon the Supreme Court to substitute its own desired outcome for the judgment of the delegated agency (EPA).