Date: 06-30-2022

Case Style:

West Virginia v. The United States

Case Number: 20-1530

Judge: Roberts

Court: Supreme Court of the United States on Cert. to the United States Court of Appeals for the District of Columbia

Plaintiff's Attorney: Attorney General of West Virginia

Defendant's Attorney: Solicitor General of the United States

Description: In 2015, the Environmental Protection Agency (EPA) promulgated the
Clean Power Plan rule, which addressed carbon dioxide emissions
from existing coal- and natural-gas-fired power plants. For authority,
the Agency cited Section 111 of the Clean Air Act, which, although
known as the New Source Performance Standards program, also au-
thorizes regulation of certain pollutants from existing sources under
Section 111(d). 42 U. S. C. §7411(d). Prior to the Clean Power Plan,
EPA had used Section 111(d) only a handful of times since its enact-
ment in 1970. Under that provision, although the States set the actual
enforceable rules governing existing sources (such as power plants),
EPA determines the emissions limit with which they will have to com-
ply. The Agency derives that limit by determining the “best system of
emission reduction . . . that has been adequately demonstrated,” or the
BSER, for the kind of existing source at issue. §7411(a)(1). The limit
then reflects the amount of pollution reduction “achievable through the
application of” that system. Ibid.
In the Clean Power Plan, EPA determined that the BSER for exist-
ing coal and natural gas plants included three types of measures,
which the Agency called “building blocks.” 80 Fed. Reg. 64667. The
first building block was “heat rate improvements” at coal-fired
plants—essentially practices such plants could undertake to burn coal
——————
* Together with No. 20–1531, North American Coal Corp. v. Environ-
mental Protection Agency et al., No. 20–1778, Westmoreland Mining
Holdings LLC v. Environmental Protection Agency et al., and No. 20–
1780, North Dakota v. Environmental Protection Agency et al., also on
certiorari to the same court.
2 WEST VIRGINIA v. EPA
Syllabus
more cleanly. Id., at 64727. This sort of source-specific, efficiency-
improving measure was similar in kind to those that EPA had previ-
ously identified as the BSER in other Section 111 rules.
Building blocks two and three were quite different, as both involved
what EPA called “generation shifting” at the grid level—i.e., a shift in
electricity production from higher-emitting to lower-emitting produc-
ers. Building block two was a shift in generation from existing coal-
fired power plants, which would make less power, to natural-gas-fired
plants, which would make more. Ibid. This would reduce carbon di-
oxide emissions because natural gas plants produce less carbon dioxide
per unit of electricity generated than coal plants. Building block three
worked like building block two, except that the shift was from both coal
and gas plants to renewables, mostly wind and solar. Id., at 64729,
64748. The Agency explained that, to implement the needed shift in
generation to cleaner sources, an operator could reduce the regulated
plant’s own production of electricity, build or invest in a new or exist-
ing natural gas plant, wind farm, or solar installation, or purchase
emission allowances or credits as part of a cap-and-trade regime. Id.,
at 64731–64732. Taking any of these steps would implement a sector-
wide shift in electricity production from coal to natural gas and renew-
ables. Id., at 64731.
Having decided that the BSER was one that would reduce carbon
pollution mostly by moving production to cleaner sources, EPA then
set about determining “the degree of emission limitation achievable
through the application” of that system. §7411(a)(1). The Agency rec-
ognized that, in translating the BSER into an operational emissions
limit, it could choose whether to require anything from a little genera-
tion shifting to a great deal. It settled on what it regarded as a “rea-
sonable” amount of shift, which it based on modeling how much more
electricity both natural gas and renewable sources could supply with-
out causing undue cost increases or reducing the overall power supply.
Id., at 64797–64811. The Agency ultimately projected, for instance,
that it would be feasible to have coal provide 27% of national electricity
generation by 2030, down from 38% in 2014. From these projected
changes, EPA determined the applicable emissions performance rates,
which were so strict that no existing coal plant would have been able
to achieve them without engaging in one of the three means of gener-
ation shifting. The Government projected that the rule would impose
billions in compliance costs, raise retail electricity prices, require the
retirement of dozens of coal plants, and eliminate tens of thousands of
jobs.
This Court stayed the Clean Power Plan in 2016, preventing the rule
from taking effect. It was later repealed after a change in Presidential
administrations. Specifically, in 2019, EPA found that the Clean
3Cite as: 597 U. S. ____ (2022)
Syllabus
Power Plan had exceeded the Agency’s statutory authority under Sec-
tion 111(d), which it interpreted to “limit[ ] the BSER to those systems
that can be put into operation at a building, structure, facility, or in-
stallation.” 84 Fed. Reg. 32524. EPA explained that the Clean Power
Plan, rather than setting the standard “based on the application of
equipment and practices at the level of an individual facility,” had in-
stead based it on “a shift in the energy generation mix at the grid
level,” id., at 32523. The Agency determined that the interpretive
question raised by the Clean Power Plan fell under the major questions
doctrine. Under that doctrine, it determined, a clear statement is nec-
essary for a court to conclude that Congress intended to delegate au-
thority “of this breadth to regulate a fundamental sector of the econ-
omy.” Id., at 32529. It found none. The Agency replaced the Clean
Power Plan by promulgating a different Section 111(d) regulation,
known as the Affordable Clean Energy (ACE) rule. Id., at 32532. In
that rule, EPA determined that the BSER would be akin to building
block one of the Clean Power Plan: a combination of equipment up-
grades and operating practices that would improve facilities’ heat
rates. Id., at 32522, 32537.
A number of States and private parties filed petitions for review in
the D. C. Circuit, challenging EPA’s repeal of the Clean Power Plan
and its enactment of the replacement ACE rule. The Court of Appeals
consolidated the cases and held that EPA’s “repeal of the Clean Power
Plan rested critically on a mistaken reading of the Clean Air Act”—
namely, that generation shifting cannot be a “system of emission re-
duction” under Section 111. 985 F. 3d 914, 995. The court vacated the
Agency’s repeal of the Clean Power Plan and remanded to the Agency
for further consideration. It also vacated and remanded the ACE rule
for the same reason. The court’s decision was followed by another
change in Presidential administrations, and EPA moved the court to
partially stay its mandate as to the Clean Power Plan while the Agency
considered whether to promulgate a new Section 111(d) rule. No party
opposed the motion, and the Court of Appeals agreed to stay its vaca-
tur of the Agency’s repeal of the Clean Power Plan.
Held:
1. This case remains justiciable notwithstanding the Government’s
contention that no petitioner has Article III standing, given EPA’s
stated intention not to enforce the Clean Power Plan and to instead
engage in new rulemaking. In considering standing to appeal, the
question is whether the appellant has experienced an injury “fairly
traceable to the judgment below.” Food Marketing Institute v. Argus
Leader Media, 588 U. S. ___, ___. If so, and a “favorable ruling” from
the appellate court “would redress [that] injury,” then the appellant
has a cognizable Article III stake. Ibid. Here, the judgment below
4 WEST VIRGINIA v. EPA
Syllabus
vacated the ACE rule and its embedded repeal of the Clean Power
Plan, and accordingly purports to bring the Clean Power Plan back
into legal effect. There is little question that the petitioner States are
injured, since the rule requires them to more stringently regulate
power plant emissions within their borders. The Government counters
that EPA’s current posture has mooted the prior dispute. The distinc-
tion between mootness and standing matters, however, because the
Government bears the burden to establish that a once-live case has
become moot. The Government’s argument in this case boils down to
its representation that EPA does not intend to enforce the Clean Power
Plan prior to promulgating a new Section 111(d) rule. But “voluntary
cessation does not moot a case” unless it is “absolutely clear that the
allegedly wrongful behavior could not reasonably be expected to recur.”
Parents Involved in Community Schools v. Seattle School Dist. No. 1,
551 U. S. 701, 719. Here, the Government “nowhere suggests that if
this litigation is resolved in its favor it will not” reimpose emissions
limits predicated on generation shifting. Ibid. Pp. 14–16.
2. Congress did not grant EPA in Section 111(d) of the Clean Air Act
the authority to devise emissions caps based on the generation shifting
approach the Agency took in the Clean Power Plan. Pp. 16–31.
(a) In devising emissions limits for power plants, EPA “deter-
mines” the BSER that—taking into account cost, health, and other fac-
tors—it finds “has been adequately demonstrated,” and then quanti-
fies “the degree of emission limitation achievable” if that best system
were applied to the covered source. §7411(a)(1). The issue here is
whether restructuring the Nation’s overall mix of electricity genera-
tion, to transition from 38% to 27% coal by 2030, can be the BSER
within the meaning of Section 111.
Precedent teaches that there are “extraordinary cases” in which the
“history and the breadth of the authority that [the agency] has as-
serted,” and the “economic and political significance” of that assertion,
provide a “reason to hesitate before concluding that Congress” meant
to confer such authority. FDA v. Brown & Williamson Tobacco Corp.,
529 U. S. 120, 159–160. See, e.g., Alabama Assn. of Realtors v. Depart-
ment of Health and Human Servs., 594 U. S. ___, ___; Utility Air Reg-
ulatory Group v. EPA, 573 U. S. 302, 324; Gonzales v. Oregon, 546
U. S. 243, 267; National Federation of Independent Business v. OSHA,
595 U. S. ___, ___. Under this body of law, known as the major ques-
tions doctrine, given both separation of powers principles and a prac-
tical understanding of legislative intent, the agency must point to
“clear congressional authorization” for the authority it claims. Utility
Air, 573 U. S., at 324. Pp. 16–20.
(b) This is a major questions case. EPA claimed to discover an
5Cite as: 597 U. S. ____ (2022)
Syllabus
unheralded power representing a transformative expansion of its reg-
ulatory authority in the vague language of a long-extant, but rarely
used, statute designed as a gap filler. That discovery allowed it to
adopt a regulatory program that Congress had conspicuously declined
to enact itself. Given these circumstances, there is every reason to
“hesitate before concluding that Congress” meant to confer on EPA the
authority it claims under Section 111(d). Brown & Williamson, 529
U. S., at 160.
Prior to 2015, EPA had always set Section 111 emissions limits
based on the application of measures that would reduce pollution by
causing the regulated source to operate more cleanly, see, e.g., 41 Fed.
Reg. 48706—never by looking to a “system” that would reduce pollu-
tion simply by “shifting” polluting activity “from dirtier to cleaner
sources.” 80 Fed. Reg. 64726. The Government quibbles with this his-
tory, pointing to the 2005 Mercury Rule as one Section 111 rule that it
says relied upon a cap-and-trade mechanism to reduce emissions. See
70 Fed. Reg. 28616. But in that regulation, EPA set the emissions
limit—the “cap”—based on the use of “technologies [that could be] in-
stalled and operational on a nationwide basis” in the relevant
timeframe. Id., at 28620–28621. By contrast, and by design, there are
no particular controls a coal plant operator can install and operate to
attain the emissions limits established by the Clean Power Plan. In-
deed, the Agency nodded to the novelty of its approach when it ex-
plained that it was pursuing a “broader, forward-thinking approach to
the design” of Section 111 regulations that would “improve the overall
power system,” rather than the emissions performance of individual
sources, by forcing a shift throughout the power grid from one type of
energy source to another. 80 Fed. Reg. 64703 (emphasis added). This
view of EPA’s authority was not only unprecedented; it also effected a
“fundamental revision of the statute, changing it from [one sort of]
scheme of . . . regulation” into an entirely different kind. MCI Tele-
communications Corp. v. American Telephone & Telegraph Co., 512
U. S. 218, 231.
The Government attempts to downplay matters, noting that the
Agency must limit the magnitude of generation shift it demands to a
level that will not be “exorbitantly costly” or “threaten the reliability
of the grid.” Brief for Federal Respondents 42. This argument does
not limit the breadth of EPA’s claimed authority so much as reveal it:
On EPA’s view of Section 111(d), Congress implicitly tasked it, and it
alone, with balancing the many vital considerations of national policy
implicated in the basic regulation of how Americans get their energy.
There is little reason to think Congress did so. EPA has admitted that
issues of electricity transmission, distribution, and storage are not
within its traditional expertise. And this Court doubts that “Congress
6 WEST VIRGINIA v. EPA
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. . . intended to delegate . . . decision[s] of such economic and political
significance,” i.e., how much coal-based generation there should be
over the coming decades, to any administrative agency. Brown & Wil-
liamson, 529 U. S., at 160. Nor can the Court ignore that the regula-
tory writ EPA newly uncovered in Section 111(d) conveniently enabled
it to enact a program, namely, cap-and-trade for carbon, that Congress
had already considered and rejected numerous times. The importance
of the policy issue and ongoing debate over its merits “makes the
oblique form of the claimed delegation all the more suspect.” Gonzales,
546 U. S., at 267–268. Pp. 20–28.
(c) Given that precedent counsels skepticism toward EPA’s claim
that Section 111 empowers it to devise carbon emissions caps based on
a generation shifting approach, the Government must point to “clear
congressional authorization” to regulate in that manner. Utility Air,
573 U. S., at 324. The Government can offer only EPA’s authority to
establish emissions caps at a level reflecting “the application of the
best system of emission reduction . . . adequately demonstrated.”
§7411(a)(1). The word “system” shorn of all context, however, is an
empty vessel. Such a vague statutory grant is not close to the sort of
clear authorization required. The Government points to other provi-
sions of the Clean Air Act—specifically the Acid Rain and National
Ambient Air Quality Standards (NAAQS) programs—that use the
word “system” or “similar words” to describe sector-wide mechanisms
for reducing pollution. But just because a cap-and-trade “system” can
be used to reduce emissions does not mean that it is the kind of “system
of emission reduction” referred to in Section 111.
Finally, the Court has no occasion to decide whether the statutory
phrase “system of emission reduction” refers exclusively to measures
that improve the pollution performance of individual sources, such
that all other actions are ineligible to qualify as the BSER. It is perti-
nent to the Court’s analysis that EPA has acted consistent with such
a limitation for four decades. But the only question before the Court
is more narrow: whether the “best system of emission reduction” iden-
tified by EPA in the Clean Power Plan was within the authority
granted to the Agency in Section 111(d) of the Clean Air Act. For the
reasons given, the answer is no. Pp. 28–31.

Outcome: 985 F. 3d 914, reversed and remanded.

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