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Environmental, social, and governance risks and opportunities

Supreme Court Decision: A New Era of Environmental Regulation and State Collaboration

In Ohio v. EPA High Court Reins in EPA
Supreme Court

The Supreme Court decision in Ohio et al. v. Environmental Protection Agency et al. is a significant victory for environmental protection while reigning in the power of federal agencies.

Among the blockbuster decisions issued in this term, the Court granted this application for a stay, halting the enforcement of the Environmental Protection Agency’s rule on the Federal Implementation Plan for controlling ground level ozone, the main ingredient in smog. (Okay, the details of what EPA is proposing may be a little inside baseball, but the minutiae and inner workings of what happened here are as fascinating as they are significant, so read on ..

Justice Neil Gorsuch, whose mother Anne McGill Gorsuch was appointed head of the EPA in February 1981 by President Reagan, authored this 5 – 4 majority opinion. Justice Barrett filed a dissenting opinion, in which Justices Sotomayor, Kagan, and Jackson joined.

In what should be read as a full throated expression of the proper role of the courts in the separation of powers, the Court found that the EPA’s final rule on the FIP was arbitrary and capricious, as it failed to provide a reasonable explanation for its action and did not adequately address concerns raised during the public comment period. By granting the stay, the Court has ensured that the EPA’s flawed rule will not be enforced and do harm while the appeal itself unfolds. Most legal scholars believe a stay should be the practice when other agency derived regulations are challenged in the judicial branch.

This decision is crucial for protecting the environment and public health, allowing what the EPA characterizes as the 23 “upwind” states that are proposed to reduce emissions that affect the air quality in “downwind” states to challenge the EPA’s rule that was updated in 2015 and quickly followed by the Agency’s “good neighbor” plan and seek a more comprehensive and effective approach to controlling ozone pollution. The Court’s ruling highlights the importance of collaboration between states and the federal government in regulating air quality, recognizing that smog knows no state boundaries, and reaffirms the primary responsibility of states (and not a federal agency) in developing compliance plans under the Clean Air Act.

It also emphasizes the need for the EPA to provide a reasoned response to concerns raised during the public comment period, ensuring transparency and accountability in the rulemaking process, and making clear courts need not defer to that bad behavior.

The crux of the broader disputes and differences were articulated by West Virginia Attorney General Patrick Morrisey, when he said the decision “is correct but the EPA will keep trying to legislate and bypass Congress’s authority, .. it has been settled by the Supreme Court, the EPA must regulate within the express boundaries of the statute that Congress passed.”

At a time when the Biden administration is using regulatory tools to advance its agenda in the face of Congressional gridlock, by a 6-3 conservative majority, the Supreme Court has been skeptical of federal regulatory power. Two days after this decision, in what is likely the most significant decision of the term, the high court overturned the 1984 decision in Chevron v. Natural Resources Defense Council, which had held that courts should defer to an agency’s reasonable interpretation of an ambiguous statute.

The Supreme Court had recently pushed back on a regulator expansion of what are waters of the U.S. limiting EPA’s effort to regulate certain wetlands under the 1972 law. And earlier, the high court limited EPA’s power to set rules for greenhouse gas emissions from power plants

On an interesting procedural note, this ruling came in one of the relatively rare cases to reach the Supreme Court through a “shadow” docket of emergency appeals. Originally filed in the U.S. Court of Appeals for the District of Columbia Circuit, the three states sought to halt implementation of the FIP, but a divided three judge panel denied the requests. The states sought emergency relief from the Supreme Court in October, and the justices heard arguments in February.

Catherine Stetson, an attorney in the case below, representing companies that own natural gas pipelines, explained the need for the emergency action by the Supreme Court before evidence was taken because if the rule was allowed to remain in effect, it could mean “hundreds of millions if not billions of dollars in costs over the next 12 to 18 months.”

By halting the enforcement of the EPA’s rule, the Court has prevented potential harm to the environment and public health, while recognizing the significant impact of ground level ozone on air quality, human health, and vegetation. Together with other recent Supreme Court cases, this provides a path for good stewardship of the environment without overreaching government.  

This Supreme Court decision, which may not have received as much media attention as other decisions this year, is when read together with those other cases, a hugely important step towards preserving the natural environment and safeguarding public health, setting a precedent for upholding the stalwart federal statutory Clean Air Act while ensuring the proper role of states within our Constitutional framework, and a healthy and clean future for all.

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