D.C. Circuit Smacks Down EPA Overreach on Pollution Regulations
Environmental law is a field unto itself, and any essay on the topic that begins with the words “Cross-State Air Pollution Rule” is likely to lose its readers in droves, but bear with me. In this instance, that initial judgment could well prove costly, as there is much to learn from Judge Brett Kavanaugh’s recent decision in EME Homer City General, L.P. v. EPA, which gives some strong indication of why so much is wrong with the internal decision-making process at the EPA.
At issue in EME is the important question of how environmental externalities between states fit into the general structure of the Clean Air Act (CAA). The first point to note about this statute is that its 1970 pedigree shines through because many of its key provisions require a close level of cooperation between the states and the federal government in what is sometimes called “our federalism.” The central concept under the Act is the National Ambient Air Quality Standards, or NAAQS that the federal government uses to delineate the scope of the CAA.
Under the statute, the NAAQS essentially set a target that the states must satisfy through their State Implementation Plan, or SIP, which requires them only to reduce the level of in-state pollution to certain levels. The states are given much latitude as to which particular sources within the state are to bear the brunt of the regulation—itself a poor idea, because the indefinite property rights thus created allow for too much jostling by large polluters anxious to shift the burdens elsewhere. If the state does not develop a timely SIP, then the federal government can respond with its own Federal Implementation Plan (FIP), which holds until the state prepares a satisfactory SIP.
One gap in this SIP/FIP system deals with the interstate pollution that was at issue in EME. The problem here is that pollution does not keenly observe state boundaries, such that some protection should be given to a downwind state against the pollution from an upwind state. The purpose of these “good neighbor” rules is to counteract these interstate externalities that, if left unchecked, could create an unfair competitive advantage. Needless to say, the federal government has some say on this issue.
In this instance, the DC Circuit (by a divided vote, where Judge Rogers’ dissent is largely on procedural grounds) struck down the EPA’s plan for overreaching. It is no great secret that the current EPA head, Lisa Jackson, is a hawk on pollution control. Judge Kavanaugh held that in this instance her actions led to overreaching, because the EPA tried to use its CSPR to achieve two goals, not one. The legitimate goal was to reduce the cross-border pollution. The illegitimate goal was to tighten the NAAQS without going through the complex provisions whereby those rules were changed.
As Kavanaugh said, the issue for the court was not the wisdom of the EPA action, but the question of whether it lay within its statutory authority under the scheme. In this case, blunting the EPA offensive was the right result for the right reason.
No sane person thinks that all environmental regulation, be it through the EPA, state agencies or the tort law, is fundamentally misguided. The issue in this instance was not the use of a regulatory authority, but only its misuse. The question is difficult to resolve in the abstract, but in this instance the use of the wrong standard led to the wrong result, which was then slapped down by the court. The issue of interstate pollution still remains and still needs a solution. Let’s hope that the EPA will proceed to attack that problem without undermining the rest of the statutory scheme.