This is a larger case with three significant and independent holdings. Based on the complexity of the issues involved, I thought maybe a post on background information was warranted.
In 2007, the U.S. Supreme Court heard Massachusetts v. EPA, in which the Court held that greenhouse gases (GHGs) did indeed pose a threat to health and the public welfare, which triggered the necessity for regulation under the Clean Air Act (CAA). For those of you unfamiliar with this case, the state of Massachusetts, who led 12 states, sued EPA for their failure to regulate GHGs under § 202 of the CAA, which requires EPA to regulate “any pollutant” which “may reasonably be anticipated to endanger health of the public welfare.” Because GHGs were encompassed by this definition, EPA was obliged to regulate them.
In 2007, we had a very different EPA than we currently do. Right now EPA is working through some pretty comprehensive climate change regulations aimed at coal burning power plants. A few years ago, EPA was under a different administration. And for those of you unfamiliar with administrative law, the EPA is part of the executive branch, i.e. the President appoints the EPA Administrator, who sets policy for the Agency. In addition, when the administration changes, so does EPA. So, in 2008, when Obama was elected and Lisa Jackson came on board, EPA, in line with the Massachusetts v. EPA holding, issued an “endangerment finding.” The Endangerment Finding found that 6 gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6), were the major GHGs that were harming the public. Therefore, in tandem with this regulation, the EPA issued two other rules: 1) the tailpipe rule and 2) the tailoring rule.
The tailpipe rule set new emissions standards for cars and light-duty trucks. In a collaborative effort, the EPA teamed up with the National Highway Traffic & Safety Administration to set this standards, and granted CA an exemption to regulate above and beyond, what are now known as the “CAFE standards.”
The tailoring rule sought to decrease the regulatory burden that would be placed on permit-granting agencies and states. According to EPA’s traditional interpretation, once, under CAA § 202, a pollutant is regulated because of the its harmful impacts on the public health and welfare, EPA must then regulate those emissions for stationary sources (the CAA is bifurcated into regulatory requirements for stationary sources and motor vehicles). Because the triggering mechanism for regulation is emission of 100 (for Prevention of Significant Deterioration) or 250 (under Title V) tons per year (tpy) of any pollutant, and power plants emit so much CO2, EPA increased the regulatory threshold to 75,000 or 100,000 tpy, accordingly, for CO2.
Once these rules and findings were issued, industry tried to use the Information Quality Act (IQA) to their advantage in overthrowing the regulation. The IQA allows anyone to put a sort of regulatory hold up on a piece of regulation with which they do not agree.
The Office of Management and Budget (OMB), is a small agency who doles out the funding that Congress allocates to our agencies when it sets an agenda. OMB created a regulatory mechanism called the IQA, which allows petitioners to submit a “request for reconsideration.” Requests for reconsideration are usually applied to science-based regulation, and claim that not all the best science was considered by the agency in coming to their decision. Here, various organizations challenged the Endangerment Finding as not having been based on the best, or all, science. The EPA reviewed these requests and rejected them. Once rejected, those petitioners appealed the denial, which EPA once again rejected, giving the petitioners a final agency determination. Once the petitioners had a final agency determination (which is required under the Administrative Procedure Act for an administrative law case to make the leap from the executive branch to the judicial branch), the case was appealed to the D.C. Circuit court on the issue of whether the EPA was arbitrary and capricious (which is an APA regulatory standards applicable to their regulations) in promulgating the Endangerment Finding and accompanying regulations under the CAA.
So stay tuned for a summary of the D.C. Circuit Court Case, which the Supreme Court granted Cert on in May!