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Michigan v. Environmental Protection Agency

ELR Citation: 45 ELR 20124
Nos. 14-46, (U.S., 06/29/2015)

The U.S. Supreme Court reversed and remanded EPA's rule limiting hazardous air pollutant emissions from power plants, holding that the Agency interpreted CAA §112(n)(1)(A) unreasonably when it deemed cost irrelevant to the decision to regulate power plants. CAA §112(n)(1) directs EPA to regulate emissions of hazardous air pollutants from power plants if the Agency finds regulation "appropriate and necessary." Here, EPA found power plant regulation "appropriate" because the plants' emissions pose risks to public health and the environment and because controls capable of reducing these emissions were available. It found regulation "necessary" because the imposition of other CAA requirements did not eliminate those risks. But EPA chose not to consider cost when making its decision, deeming it irrelevant. By a 5-4 vote, the Supreme Court disagreed, concluding that EPA went beyond the "bounds of reasonable interpretation" when it determined that cost is not a factor relevant to the appropriateness of regulating power plants. The phrase "appropriate and necessary" plainly encompasses cost. In addition, CAA §112(n)(1) required EPA to conduct three studies, including one that reflects concern about cost. To support its interpretation, EPA argued that other parts of the CAA expressly mention cost, while §112(n)(1)(A) does not. But this only shows that §112(n)(1)(A)'s broad reference to appropriateness encompasses multiple relevant factors, one of which is cost. It is unreasonable to infer that, by expressly making cost relevant to other decisions, the Act implicitly makes cost irrelevant to the appropriateness of regulating power plants. Nor does Whitman v. American Trucking Ass'n., Inc., 531 U.S. 457, 31 ELR 20152 (2001), support EPA's interpretation. That case established that where the CAA expressly directs EPA to regulate on the basis of a factor that on its face does not include cost, the Act normally should not be read as implicitly allowing the Agency to consider cost. But that principle has no application here, as "appropriate and necessary" is a far more comprehensive criterion than "requisite to protect the public health." Further, the possibility of considering cost at a later stage, when deciding how much to regulate power plants, does not establish its irrelevance at this stage. And although the CAA makes cost irrelevant to the initial decision to regulate sources other than power plants, the whole point of having a separate provision for power plants was to treat power plants differently. On remand, EPA must consider cost—including cost of compliance—before deciding whether regulation is appropriate and necessary. Scalia, J., delivered the opinion of the Court, in which Roberts, C.J., and Kennedy, Thomas, and Alito, JJ., joined. Thomas, J., filed a concurring opinion. Kagan, J., filed a dissenting opinion, in which Ginsburg, Breyer, and Sotomayor, JJ., joined.