Supreme Court Decides Global Warming Case

On Monday, April 2, 2007, the Supreme Court decided by a five to four vote that the Environmental Protection Agency (EPA) possesses authority under the Clean Air Act (the Act) to regulate greenhouse gas emissions from new motor vehicles. The Court’s decision in Massachusetts v. EPA does not require EPA to promulgate regulations; EPA first must determine whether greenhouse gas emissions endanger public health, and only then will it commence a full process for regulating those emissions. That is likely to be a major regulatory undertaking and could end up being superseded by congressional action.

Nevertheless, the Court’s decision is likely to be a landmark for several reasons. First, the Court’s finding that the State of Massachusetts had standing to sue will likely facilitate future legal challenges by states to environmental and other federal regulations. Second, by constraining the ability of agencies to base decisions on policy factors that are not specifically articulated in a given statute, the Court dealt a potentially serious setback to agency authority. Third, the decision illuminates the Court’s even split on many important questions of law and that Justice Anthony Kennedy will likely offer the key deciding vote on those important questions.

While Massachusetts v. EPA addressed only greenhouse gas emissions from new motor vehicles, there are several consolidated cases pending in the United States Court of Appeals for the District of Columbia Circuit that raise the same question as applied to power plants and other large industrial emitters of greenhouse gases. See Coke Oven Environmental Task Force v. EPA, No. 06-1131 (D.C. Cir. filed Apr. 6, 2006). Recognizing the similar questions presented, the Court of Appeals had been holding the cases in abeyance until the Supreme Court decided Massachusetts v. EPA. Now that the Court has clarified EPA’s authority to regulate greenhouse gas emissions, if EPA finds that greenhouse gases endanger public health or welfare, then it will likely undertake parallel rulemaking proceedings for motor vehicles and stationary sources.

EPA Declines to Regulate Greenhouse Gas Emissions

The Supreme Court’s decision had its origins in an October 1999 rulemaking petition requesting that EPA regulate greenhouse gas emissions from new motor vehicles under § 202 of the Clean Air Act. That section states, “The [EPA] Administrator shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles . . . which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” 42 U.S.C. § 7521(a)(1). The Act further defines “air pollutant” to include “any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive . . . substance or matter which is emitted into or otherwise enters the ambient air.” Id. § 7602(g). Thus, if the EPA Administrator exercises his judgment and determines that an air pollution agent emitted into the ambient air from new motor vehicles causes or contributes to air pollution, which in turn may reasonably be anticipated to endanger public health or welfare, then EPA is required to issue appropriate standards. The rulemaking petition specifically noted that greenhouse gases emitted from new motor vehicles—most notably carbon dioxide—contribute to the significant acceleration of global warming. Further, because global warming endangers public health or welfare, the petitioners maintained that emissions could be regulated under the Act as “air pollutants.”

EPA did not respond to the petition until September 8, 2003, when the agency entered an order stating that it would not proceed with any rulemaking. EPA first explained that it lacked authority under the Act to promulgate mandatory regulations relating to global climate change. Specifically, EPA reasoned that actions by Congress following passage of the Clean Air Act could be read as limiting any authority to EPA to promulgate regulations pertaining to greenhouse gases. For this reason, EPA found that greenhouse gases cannot be “air pollutants” within the meaning of the Clean Air Act. EPA also pointed to the fact that treating carbon dioxide as an air pollutant would require a reduction in tailpipe emissions, which in turn would require improving fuel economy; and Congress had already delegated the task of setting fuel economy standards to the Department of Transportation.

Second, EPA concluded that even if it had authority to regulate greenhouse gases, it would decline to exercise its authority. EPA gave controlling weight to a 2001 report issued by the National Research Council (NRC) which had concluded that a causal link between human activities and greenhouse gases could not be unequivocally established. Additionally, EPA reasoned that any regulation of motor vehicle emissions would have to be piecemeal and, hence, inconsistent with the President’s “comprehensive approach” to greenhouse gases and global warming.

The D.C. Circuit Upholds EPA’s Decision

After EPA declined the rulemaking petition, several state and local governments joined the original petitioners in seeking review of the order in the D.C. Circuit. The three judges that heard the case could not agree on a single approach and wrote three separate opinions. However, two judges agreed that EPA properly exercised its discretion in denying the petition. Judge Randolph, who authored the Court’s judgment, specifically adopted this approach. In a separate opinion, Judge Sentelle wrote that none of the petitioners had established the necessary requirements for Article III standing: injury in fact, causation, and redressability. Judge Tatel dissented. He concluded that petitioners had standing and that EPA was wrong on the merits: EPA could regulate greenhouse gas emissions from new motor vehicles and its explanations for failing to exercise its authority conflicted with the Clean Air Act’s plain language.

The Supreme Court Holds that EPA May Regulate Greenhouse Gas Emissions

Writing for a five-justice majority that included Justices Kennedy, Souter, Ginsburg, and Breyer, Justice Stevens reversed the judgment of the D.C. Circuit and remanded the case for further proceedings. The majority opinion first addressed whether any of the petitioners had standing, and concluded that at least one petitioner—the State of Massachusetts—had demonstrated the requisite standing. Like Judge Tatel, Justice Stevens stressed “the special position and interest of Massachusetts.” Opinion (Op.) at 15. Relying on a century-old opinion written by Justice Holmes, Georgia v. Tennessee Copper Co., 206 U.S. 230, 237 (1907), Justice Stevens observed that “States are not normal litigants for the purposes of invoking federal jurisdiction.” Op. at 15. Rather, the State of Massachusetts has a unique and “well-founded desire to preserve its sovereign territory today” from any of the harms associated with global climate change. Id. at 16. Between its procedural right to challenge the rejection of a rulemaking petition as arbitrary and capricious and “Massachusetts’ stake in protecting its quasi-sovereign interests,” Justice Stevens found that “the Commonwealth is entitled to special solicitude in our standing analysis.” Id. at 17.

Justice Stevens next found that Massachusetts had established all three standing elements. Massachusetts had established injury in fact because the “harms associated with climate change are serious and well recognized,” and include, according to the NRC Report, retreating glaciers, diminishing snow cover, and rising sea levels. Id. at 18. Moreover, because “rising seas have already begun to swallow Massachusetts’ coastal land,” Justice Stevens reasoned that it was irrelevant that the alleged injuries were widely shared. Id. at 19. Massachusetts satisfied the causation element because automobile emissions do in fact contribute to global warming, even if they are not its sole cause: if Massachusetts had to show that EPA’s failure to act was the sole source of the problem, then “a small incremental step, because it is incremental, can never be attacked in a federal judicial forum.” Id. at 21. Finally, even if “regulating motor-vehicle emissions will not by itself reverse global warming, it by no means follows that [the Court] lack[s] jurisdiction to decide whether EPA has a duty to take steps to slow or reduce it.” Id. at 22. For this reason, the Court found that Massachusetts also demonstrated redressability.

The Court next dismissed EPA’s alternative jurisdictional argument. Specifically, the Court rejected EPA’s reliance on Heckler v. Chaney, 470 U.S. 821 (1985), which held that an agency’s refusal to initiate enforcement proceedings is not subject to judicial review. Justice Stevens explained that there are “key differences between a denial of a petition for rulemaking and an agency’s decision not to initiate an enforcement action.” Op. at 24. Agency refusals to initiate rulemaking “ ‘are less frequent, more apt to involve legal as opposed to factual analysis, and subject to special formalities, including a public explanation.’ ” Id. at 24-25 (quoting American Horse Protection Ass’n, Inc. v. Lyng, 812 F.2d 1, 4 (D.C. Cir. 1987)).

Turning to the merits, the Court disagreed with EPA’s reasoning, and the D.C. Circuit’s judgment, in almost every respect. To begin with, the Court had “little trouble concluding” that § 202(a)(1) of the Clean Air Act authorizes EPA to regulate greenhouse gas emissions from new motor vehicles if EPA “forms a ‘judgment’ that such emissions contribute to climate change.” Op. at 25. As Justice Stevens explained, the statutory text precluded EPA’s reasoning that it could not regulate greenhouse gases as “air pollutants” because Congress did not intend EPA to regulate substances that contribute to global climate change. “On its face, the definition of [‘air pollutant’] embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word any,” Justice Stevens wrote. Id. at 26. Thus, carbon dioxide and other gases emitted from new motor vehicles were covered by the statute and could be regulated by EPA.

Nor did the Court find any merit to EPA’s argument that post-enactment congressional actions constituted a legislative command to refrain from regulating greenhouse gas emissions. Even if post-enactment history “could shed light on the meaning of an otherwise-unambiguous statute,” the Court explained, the agency had “never identifie[d] any action remotely suggesting that Congress meant to curtail its power to treat greenhouse gases as air pollutants.” Id. at 27. The Court also dismissed EPA’s reliance on FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000). In that case, the Court held that FDA could not regulate tobacco products as “drugs” or “devices” within the meaning of the Food, Drug and Cosmetic Act (FDCA) because the only permissible regulation—an outright ban—would be inconsistent with subsequent congressional enactments.

The exercise of regulatory authority by EPA would result in no such outright ban on emissions. Moreover, the Brown & Williamson Court had explained that a series of congressional enactments relating to tobacco made sense “only if adopted ‘against the backdrop of FDA’s consistent and repeated statements that it lacked authority under the FDCA to regulate tobacco.’ ” Op. at 28 (quoting Brown & Williamson, 529 U.S. at 144). There was no comparable history in this case; in fact, EPA previously had “affirmed that it had such authority” to regulate greenhouse gases. Id. at 29. The Court likewise dismissed EPA’s contention that it could not regulate emissions due to Congress’s delegation of authority to the Department of Transportation to regulate fuel standards.

“[T]hat DOT sets mileage standards in no way licenses EPA to shirk its environmental responsibilities.” Id.

The Court also soundly rejected EPA’s alternative argument that it would be “unwise” to regulate greenhouse gas emissions from new motor vehicles. Id. at 30. Justice Stevens explained that the Act permits EPA to exercise its “judgment” relating to whether an air pollutant “cause[s], or contribute[s] to, air pollution which may reasonably be anticipated to endanger public health or welfare.” Id. EPA cannot, however, use the word “judgment” in the statute as “a roving license to ignore statutory text” by basing a decision not to regulate on factors not mentioned in the statute:

“once EPA has responded to a petition for rulemaking, its reasons for action or inaction must conform to the authorizing statute.” Id. EPA may well conclude that scientific uncertainty “precludes EPA from making a reasoned judgment as to whether greenhouse gases contribute to global warming.” Id. at 31. But “[t]hat EPA would prefer not to regulate greenhouse gases because of some residual uncertainty . . . is irrelevant.” Id. at 32. The Court concluded by reiterating that it would not “reach the question whether on remand EPA must make an endangerment finding, or whether policy concerns can inform EPA’s actions in the event that it makes such a finding. . . . We hold only that EPA must ground its reasons for action or inaction in the statute.” Id.

Dissenting Opinions

Four Justices joined two separate dissents. Chief Justice Roberts, joined by Justices Scalia, Thomas, and Alito, took the position that none of the petitioners had standing to sue. His opinion took issue with the majority for “[r]elaxing” standing requirements for States, predicting that the opinion would return to haunt the Court. Justice Scalia, joined by the Chief Justice and Justices Thomas and Alito, wrote a separate dissent addressing the majority on the merits. His dissent emphasized that there was no basis, statutory or otherwise, for concluding that EPA must come to a decision on endangerment whenever a petition is filed. Scalia Dissent at 2. In any event, Justice Scalia agreed with EPA that it lacked authority to regulate greenhouse gas emissions from new motor vehicles and, emphasizing uncertainty about global warming, that it had properly exercised its judgment not to promulgate regulations.

Implications of Massachusetts v. EPA

Notwithstanding the initial attention showered on the Court’s decision, the long term impact of Massachusetts v. EPA on the global warming debate remains to be seen. In the immediate future, the decision requires only that EPA determine whether greenhouse gas emissions from new motor vehicles “cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” 42 U.S.C. § 7521(a)(1). The record in the case suggests that there is considerable scientific consensus on this point, a fact that is also consistent with recent statements from the federal government. However, the traditionally slow pace of formal administrative action suggests that an EPA endangerment decision may not issue for some time. This is particularly true if EPA decides that additional studies are needed before it can act.

Whatever EPA’s ultimate response, the Court’s decision could still play a significant role in the global warming debate. With both houses of Congress in the hands of the Democratic Party, it is possible that Massachusetts v. EPA will spur some type of legislative action. For example, Congress could mandate high fuel efficiency standards or specifically instruct EPA to regulate greenhouse gas emissions from new motor vehicles. Whether such legislation could withstand a presidential veto is another question.

It is also possible that the Court’s decision will embolden State and local governments to take the lead on addressing global warming. Indeed, several states, notably California, have already made serious and increasingly prominent attempts to regulate industry and motor vehicles. Although state-based approaches clearly lack the comprehensive regulatory structure that the federal government alone can offer, they may become more common, particularly if EPA does not act quickly in the wake of the Court’s ruling.

Apart from its immediate effects on EPA and the global warming debate, the Court’s decision portends several important shifts in the law. First, the finding that Massachusetts had established standing to sue may make it easier for State and local governments to challenge federal administrative actions in other contexts. For example, an agency’s failure to exercise authority delegated by other acts, including, for example, the National Environmental Policy Act, the Clean Water Act, and the National Historic Preservation Act, could also be challenged by State and local governments. It also is an open question whether the remainder of the Court’s standing analysis— relating to injury in fact, causation, and redressability—will apply to other cases brought by private plaintiffs alleging similar injuries, i.e., that are “imminent” in the sense that certain atmospheric or environmental factors are combining in a way that will likely result in injury some time in the future.

The Court’s decision is also a notable rebuke to the general authority of administrative agencies to invoke their discretion as a hedge against judicial challenge. The Court’s ruling that EPA could not simply invoke its “judgment” and base its decision on factors that do not appear in the statute suggests a general restriction on the authority of agencies to inject policy factors into their decisions. By constraining the ability of the executive branch in this manner, Massachusetts v. EPA is of a piece with recent Supreme Court decisions that have rejected ambitious assertions of executive authority. See, e.g., Hamdan v. Rumsfeld, 126 S. Ct. 2749 (2006). Indeed, it now appears that there is a solid majority of justices willing to check the executive branch from encroaching on legislative prerogatives.

Massachusetts v. EPA also provides a useful insight into the dynamics of the new Roberts Court. This decision confirms what many forecast with the change in the Court’s personnel last term: that Justice Kennedy has assumed the role Justice O’Connor filled during her final years on the Court, when she was often the crucial fifth vote on many contentious issues. The Court’s decision also demonstrates an inversion of the jurisprudential approach normally adopted by the different sets of justices. Although it is common for them to emphasize context, the more liberal justices insisted on a highly textualist interpretation of the Clean Air Act. In contrast, the more conservative justices— who tend to favor statutory text over other factors—instead emphasized the broader statutory context and structure.