In Losing Battle On Mercury, EPA Gains In War On Climate Change

The Supreme Court remanded rules on mercury and other toxic emissions from power plants Monday, ostensibly dealing a blow to the Obama administration’s environmental regulation efforts. But in losing the battle on mercury, the Environmental Protection Agency might have won a battle in its war on climate change.

By a vote of 5-4, the court ruled that the Mercury and Air Toxics Standard, or MATS, needed to be sent back to the drawing board in order to better address costs. Writing for the majority, Justice Antonin Scalia said, “The Agency gave cost no thought at all, because it considered cost irrelevant to its initial decision to regulate.”

What seems at first to be a victory for the power industry and anti-EPA legislators actually undermines their assault on the Clean Power Plan, according to Brian Potts, who’s a partner with the law firm Foley & Lardner LLP in Madison, Wis.

“If the industry wins on MATS, it’s losing on the Clean Power Plan,” he said in a phone interview Wednesday.

The Clean Power Plan, or CPP, is a proposed rule that aims to reduce carbon emissions from new and existing power sources 30 percent below 2005 levels by 2030.

The authority to implement both MATS and CPP comes from the Clean Air Act, a 1970s-era law. The problem, according to industry lawyers, is that the two power plant rules are justified based on two separate sections of that law – section 112 for MATS and section 111 for the CPP. CPP opponents have attacked the climate plan by arguing the government can’t regulate power plants under two different sections.

By killing one of those rules, they’ve also killed their argument.

Laurence Tribe, the attorney who represented 14 states and coal companies in Murray Energy v. EPA, the first courtroom battle over the CPP, outlined that argument in comments submitted to the agency last year. “On its face, the [Clean Power Plan] violates Section 111 of the Clean Air Act… because the statute expressly forbids the regulation of any air pollutant emitted from a source category that EPA already regulates under Section 112 of the Clean Air Act,” Tribe wrote.

When the climate rules are finalized and the legal challenges inevitably make their way to the Supreme Court, the Section 111 versus 112 argument may be invalid, as MATS is no longer the law of the land.

Jeff Holmstead, an industry attorney with the law firm Bracewell and Giuliani LLP, isn’t convinced that’s how it would work. Instead, “the question falls squarely back on EPA,” Holmstead said in a phone interview Friday. He said that unless EPA decides to vacate the MATS rule entirely, CPP opponents would still be able to argue they’re being regulated under two different sections of the law since EPA is still likely to re-issue MATS.

Holmstead, a former assistant administrator at EPA during President George W. Bush’s administration, said that the agency has a “big problem” if they try to preserve both the climate and mercury rules.

“Even if MATS goes away, and it takes the 111 versus 112 argument off the table, that’s not even the biggest legal issue the Clean Power Plan faces,” he said.

There’s little disagreement that in the full absence of MATS, the CPP stands a better chance of making its way through federal courts unscathed. Daniel Farber, a law professor at the University of California, Berkeley, said by email that if MATS is “deep-sixed… that eliminates one of industry’s key challenges to the Clean Power Plan.”

The question remains whether Monday’s decision – which effectively delays MATS unless EPA decides to vacate the rule – is enough to say that power plants aren’t currently being regulated under another section of the Clean Air Act.

Because MATS was remanded, and not vacated “the issue is murkier,” Paul Gutermann, a partner at Akin Gump, a Washington-based firm, wrote in an email Friday. “Until either MATS (or its replacement) or the Clean Power Plan is effective (i.e., a final rule is promulgated and its provisions go into effect), I think the ‘we’re being regulated under two sections’ argument is not especially strong.”

The Supreme Court sent the case back to the D.C. Circuit Court, which will ask the EPA to reevaluate its rule.

There’s something everyone seems to agree on, however: This is a weird situation.

“I can’t think of any other case that’s at all like this,” Holmstead said.

Potts concurred. “I’ve never seen a situation where one rule might block another, and that’s essentially what you have here,” he said.