To defend climate rules, agencies may need to downplay their significance

Environmental law experts are outlining how federal agencies might defend their ability to enforce climate regulations, following a controversial Supreme Court decision that limits government-mandated cuts in greenhouse gas emissions.

One potential defense the Environmental Protection Agency (EPA) and other agencies could offer is to argue that their climate rules are incremental and do not transform economic sectors,  a group of former EPA officials and other environmental experts said last week during a public webinar.

The high court decision implies “that just talking about climate could get us into trouble” in lawsuits over agency greenhouse gas rules, Lisa Heinzerling, a law professor with Georgetown University Law Center and a former head of EPA’s policy office, said. Framing climate rules as being developed “just like they’ve always done” with past policies might help them survive legal challenges in light of the decision, she said.

The Supreme Court’s June 30 ruling faulted the EPA for claiming “unheralded” authority with an Obama-era Clean Air Act regulation. That rule sought to shift the energy sector from coal-fired power plants to lower-emitting sources such as natural gas or other more environmentally friendly options, such as solar. Although the agency finalized the rule, it did not take effect.

The power “generation shifting” approach far exceeded the EPA’s regulatory discretion under the Clean Air Act, the court ruled, stating that a fundamental transformation of a major sector of the economy would require Congress to direct such regulation.

The justices’ 6-3 ruling said the EPA’s ability to curb utility greenhouse gases is restricted by the “major questions” doctrine – a legal term that says agencies must have clear authority from Congress to write rules that affect “fundamental” sectors of the economy. The court ruled that the climate rule for utilities  was too broad by trying to force a shift from coal-fired power to cleaner sources.

Matt Leopold, a former EPA general counsel who is now a partner with the Hunton Andrews Kurth law firm, said during the webinar that agencies would be “ill-advised” to make big pronouncements about how transformative a climate regulation could be. That’s because industry groups and others could use such statements to bolster lawsuits that challenge climate regulations for exceeding agencies’ powers and trying to transform the economy.

Vehicle rule lawsuit

An early test of the Supreme Court ruling’s impact is seen in a legal petition filed June 30 by state officials from Texas and 10 other states, asking a federal appeals court to review the legality of a National Highway Traffic Safety Administration (NHTSA) rule that strengthens fuel economy standards for cars and light trucks in model years 2024-26.

Texas Attorney General Ken Paxton claims that the rule violates federal law by mandating an increase in the number of electric vehicles used in the United States.

“The regulation seeks to impose substantial increases in the number of electric vehicles on roads nationwide, with ramifications that will be felt throughout the automobile industry and our flailing economy generally,” Paxton said in a statement.

The petitioning states argue that the rule raises “major questions” because, they claim, it aims to phase out internal combustion engine cars and require the production of electric vehicles to fight the climate crisis.

The case is pending in the U.S. Court of Appeals for the District of Columbia Circuit, but the major questions fight will likely go up to the Supreme Court, according to Kevin Poloncarz, a partner with the law firm Covington & Burling LLP. “I really do worry that that’s one case where we are going to see this teed up again and soon,” he said as part of the webinar.

During the webinar, which was presented by the Environmental Law Institute, Environmental Defense Fund General Counsel Vickie Patton said that changes in the auto industry could provide a defense in the NHTSA rule challenge.

She noted that the “big three” automakers – Ford, GM, and Stellantis, formerly known as Chrysler – have made millions of investments in electric vehicles, and that shows any effort by agencies to promote such cars is not forcing a transformative market change.

The major questions doctrine is a “judge-made doctrine that creates uncertainty that hurts our country,” she said.