Why the Supreme Court Could Spell Trouble For Obama’s Agenda

Monday’s ruling could compel agencies to take costs into account when deciding to regulate.

National Journal
Clare Foran
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Clare Foran
June 29, 2015, 11:25 a.m.

Pres­id­ent Obama has made it clear that his En­vir­on­ment­al Pro­tec­tion Agency will use its reg­u­lat­ory power to in­stall lim­its on car­bon di­ox­ide and tox­ic-air pol­lut­ants for everything from power plants to trucks.

But Monday’s Su­preme Court de­cision against EPA is a re­mind­er that the biggest threat to Obama’s green leg­acy and the sweep­ing reg­u­lat­ory agenda that the ad­min­is­tra­tion is ra­cing to ce­ment be­fore the pres­id­ent leaves of­fice comes from the courts.

The 5-4 de­cision, with the ma­jor­ity opin­ion penned by Justice Ant­on­in Scalia, ruled that EPA vi­ol­ated the law by fail­ing to con­sider cost in de­cid­ing to reg­u­late tox­ic-air pol­lu­tion from power plants. That ver­dict is a set­back to the ad­min­is­tra­tion at a time when all hands on deck are needed to de­fend the pres­id­ent’s cli­mate agenda. It cre­ates un­cer­tainty over the fate of a key pil­lar of the pres­id­ent’s ef­forts to curb air pol­lu­tion and hands a fresh set of talk­ing points to op­pon­ents of the rule as they ar­gue that the ad­min­is­tra­tion over­reached.

The biggest im­pact, however, may be felt down the road—and across the en­tire fed­er­al gov­ern­ment.

(RE­LATED: Su­preme Court Deals Blow to Obama En­vir­on­ment­al Agenda)

Some leg­al ex­perts con­tend that the rul­ing could send a mes­sage to fed­er­al agen­cies that they must demon­strate that they have taken cost in­to ac­count when de­cid­ing to reg­u­late—and that if an agency ig­nores cost, it does so at its own per­il.

“This is a ground­break­ing ad­min­is­trat­ive-law case,” said Justin Sav­age, a former Justice De­part­ment en­vir­on­ment­al law­yer who served un­der the ad­min­is­tra­tions of George W. Bush and Obama and a part­ner with the law firm Hogan Lov­ells. “It es­sen­tially says that when a stat­ute is am­bigu­ous an agency must con­sider costs.”

“The reas­on I’m struck by this and a bit troubled is that there’s a real ques­tion of wheth­er this de­cision ap­plies broadly. And I read it as ap­ply­ing broadly,” said Lisa Hein­zer­ling, a Geor­getown law pro­fess­or and seni­or cli­mate-policy coun­sel to former EPA Ad­min­is­trat­or Lisa Jack­son.

If that pre­ced­ent sticks, it could throw a wrench in­to the gears of the reg­u­lat­ory ma­chine if agen­cies must de­vote ad­di­tion­al time and re­sources mak­ing sure their cost cal­cu­la­tions hold up in court.

“After this de­cision, an agency would not want to walk in­to court say­ing, ‘Your Hon­or, we did not con­sider costs at all when de­cid­ing to take reg­u­lat­ory ac­tion on an is­sue,’” said Jonath­an Adler, an en­vir­on­ment­al law pro­fess­or at Case West­ern Re­serve Uni­versity.

(RE­LATED: House Passes Bill to Let States Ig­nore Obama’s Cli­mate-Change Rule)

Even if the court de­cision does not set such a pre­ced­ent, Re­pub­lic­ans and in­dustry chal­lengers say Monday’s ver­dict proves that the ad­min­is­tra­tion over­stepped the lim­its of the law.

“The mere fact that the EPA wished to ig­nore the costs of its rules demon­strates how little the agency is con­cerned about the ef­fects it has on the Amer­ic­an people,” House Ma­jor­ity Lead­er Kev­in Mc­Carthy said after the rul­ing was handed down. “From its ozone, to green­house gas, to nav­ig­able wa­ters rules, the EPA con­tin­ues to bur­den the pub­lic with more and more costs, even as so many are still strug­gling to get by and im­prove their lives in this eco­nomy.”

The Su­preme Court’s de­cision to side against the agency also serves as a pain­ful re­mind­er to the ad­min­is­tra­tion that it may not al­ways see its reg­u­lat­ory ac­tions up­held in the face of leg­al chal­lenges.

“By EPA’s lo­gic, someone could de­cide wheth­er it is “ap­pro­pri­ate” to buy a Fer­rari without think­ing about cost, be­cause he plans to think about cost later when de­cid­ing wheth­er to up­grade the sound sys­tem,” Scalia wrote in the ma­jor­ity opin­ion.

For now, the mer­cury reg­u­la­tion re­mains in place. A lower court will de­cide wheth­er the rule will stay on the books while the agency de­term­ines how to com­ply with the high court’s rul­ing.

“We are re­view­ing the de­cision and will de­term­ine any ap­pro­pri­ate next steps once our re­view is com­plete. EPA is dis­ap­poin­ted that the Court did not up­hold the rule, but this rule was is­sued more than three years ago, in­vest­ments have been made and most plants are already well on their way to com­pli­ance,” Melissa Har­ris­on, a spokes­wo­man for the agency said after the ver­dict.

Ul­ti­mately, the scope of the rul­ing may not be­come clear un­til ad­di­tion­al lit­ig­a­tion has a chance to test its lim­its. And a slate of en­vir­on­ment­al law­yers were quick to say that the rul­ing won’t cre­ate a ripple ef­fect.

(RE­LATED: Mike Pence Says In­di­ana Will Buck Obama’s EPA Cli­mate Plan)

“The Su­preme Court’s hold­ing was nar­row,” said Peter Za­lzal, an at­tor­ney with the En­vir­on­ment­al De­fense Fund. “The court fo­cused here on a spe­cif­ic pro­vi­sion of the Clean Air Act, and we fully ex­pect that the agency will be able to quickly pre­pare a find­ing that reas­on­ably takes costs in­to ac­count as the Su­preme Court has dir­ec­ted.”

And while some leg­al ex­perts say the ques­tion of wheth­er EPA failed to ap­pro­pri­ately con­sider costs in de­cid­ing to reg­u­late car­bon pol­lu­tion from power plants—the center­piece of the pres­id­ent’s cli­mate agenda—likely will sur­face in chal­lenges to the reg­u­la­tion that is due to be fi­nal­ized this sum­mer, oth­ers waved away that con­cern.

“Sure, lit­ig­ants will try to use whatever they can to make their case, but I don’t think this rul­ing provides strong pre­ced­ents go­ing for­ward for in­dustry op­pon­ents to EPA rules, un­less they hap­pen un­der the identic­al pro­vi­sion at stake in this case,” said Ann Carlson, an en­vir­on­ment­al law pro­fess­or at the UCLA School of Law.

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