(Updates with EPA comment in sixth paragraph, Harvard
professor in second one under First Crack subheadline.)
By Mark Drajem and Andrew Zajac
(Bloomberg) — A congressional drafting error and clunky
phrase is putting a second of President Barack Obama’s signature
endeavors in jeopardy. This time it’s climate change.
Challengers to Obama’s policies are exploiting imprecise
amendments passed by Congress 25 years ago in a lawsuit to
derail Environmental Protection Agency rules designed to curb
carbon emissions. The case, using a line of attack similar to
one against his massive health-care overhaul, is set for a
hearing Thursday in federal court.
If coal-mine operator Murray Energy Corp. and states led by
West Virginia convince a panel of judges named by Republican
presidents to agree with their reading, the EPA rules could be
tossed before they are even made final.
“It’s a perfect storm of timing and congressional goofs
that leads to these interesting arguments,” said Thomas Lorenzen, a former government lawyer on clean-air cases and who
is now a partner at the law firm Dorsey & Whitney. “And Murray
Energy drew a good panel for themselves, so there will be some
conflicting tendencies there.”
Courts have rejected attempts to challenge rules before
they are completed, and the carbon rules won’t be done until
later this year. As a result, EPA Administrator Gina McCarthy
has said she’s confident Murray’s lawsuit will be dismissed.
“Since we have not issued a final rule, we believe that
lawsuits challenging the rule are premature,” Liz Purchia, a
spokeswoman for the EPA, said in a statement. “We will address
all comments concerning the legality of the rule when we issue
the final Clean Power Plan.”
Still, either now or later, a federal court will need to
rule on these issues, and they’ve taken on great political
importance as Obama has made fighting climate change a top
priority in the final years of his presidency.
For the administration, this case has similarities to the
challenge over the Affordable Care Act that is awaiting a
decision by the Supreme Court. In that case, the fight is over a
phrase that says people qualify for tax credits when they buy
insurance on an exchange “established by the state.”
Obama opponents say that phrase means subsidies aren’t
available in dozens of states that didn’t set up exchanges.
Residents of those states instead use the federal healthcare.gov
system, with an estimated 7.5 million getting taxpayer-subsidized discounts.
The carbon rule’s effects are primarily on power utilities,
but will have broad impacts on citizens and the economy, both
supporters and critics say.
Meeting agency standards for reducing carbon dioxide would
produce $90 billion in climate and health benefits and cost
utilities as much as $8.8 billion, according to the EPA. Obama
has also pushed a broader climate plan that would make freezers,
microwaves and other appliances more efficient; curb methane
from landfills; and cut the use of climate-altering chemicals in
Congressional Republicans are sparing no effort to fight
those initiatives. Senate Majority Leader Mitch McConnell wrote
state leaders this year, urging them not to implement the EPA
rule, much as many states refused to establish state insurance
exchanges for Obamacare.
To add legal heft, coal producer Peabody Energy Corp. hired
Laurence Tribe, Obama’s law professor and mentor at Harvard
University, to help. Tribe, a leading liberal constitutional
scholar, has argued 35 cases at the Supreme Court, including the
2000 election case for Democratic presidential candidate Al Gore
over Republican George W. Bush.
Tribe, who says the EPA rule is akin to ripping up the
Constitution to address climate change, is scheduled to handle
part of the oral argument against the government at the U.S.
Court of Appeals in Washington. The judges set to hear the case
are Brett Kavanaugh and Thomas Griffith, appointed by George W.
Bush, and Karen Henderson, who was named by George H.W. Bush.
Murray Energy, the biggest closely held U.S. coal company,
challenged the law in June, and was joined in February by
Peabody, the largest publicly held coal company.
Fifteen states, all with Republican attorneys general
except coal-heavy Kentucky, have sided with coal producers,
along with business groups including the National Federation of
Independent Business and the U.S. Chamber of Commerce.
At issue is how the EPA used sections of the Clean Air Act
to regulate pollution. The companies argue the rules violate an
amendment to the Act in 1990, which they say limits regulation
of the facilities for pollutants to just one section of the law.
Since the EPA in 2011 mandated cuts in mercury and toxic
emissions from power plants under section 112, they can’t also
be regulated for carbon pollution under section 111(d), which is
what the EPA proposed last year.
“The plain text of section 111(d) flatly and unambiguously
prohibits EPA’s proposal,” Tribe told a congressional panel
last month. “The absence of EPA legal authority in this case
makes the Clean Power Plan, quite literally, a ‘power grab.’”
The EPA’s lawyers counter that a drafting error by
lawmakers actually created separate amendments for that part of
111(d); one passed the House and the other by the Senate. When
different versions of legislation are blended into a final
document, such conflicts are supposed to be resolved. Yet both
were in the bill passed by Congress and signed into law.
While the agency argues neither prohibits the carbon
regulation it’s pursuing, the Senate amendment doesn’t contain
any restrictions on double regulation. The House measure would
only prohibit double regulation of specific pollutants, and
doesn’t include a general prohibition on regulating power plants
in two different areas, the EPA’s supporters say.
“This is the classic case where there is ambiguity that
allows the agency to have a first crack at trying to resolve a
conflict,” said Jody Freeman, a Harvard University law
professor who supports the EPA’s position.
And the legal wranglings have one odd twist. Many of the
states questioning the carbon rules have also taken a case to
the Supreme Court arguing that the EPA failed to account for
costs before issuing its mercury rule under section 112. If that
rule gets tossed by the highest court, then it would remove the
double regulation argument against the carbon plan.
The Supreme Court case was argued last month, and a
decision will come in the next few months.
The case is In re: Murray Energy Corp., 14-1112, U.S. Court
of Appeals, District of Columbia (Washington). A separate case,
West Virginia v. EPA, 14-1146, was consolidated with it.
For Related News and Information:
Coal Provocateur Gorges on Mines, Defends a Dying Industry Obama
Harvard Law Professor Tribe Calls Key EPA Rule ‘Overreach’
Obama Seeks Power-Plant Emissions Cuts Republicans Oppose
Legal headlines: TLAW <GO>
Bloomberg legal resources: BLAW <GO>
To contact the reporters on this story:
Mark Drajem in Washington at +1-202-624-1964 or
Andrew Zajac in Washington at +1-202-654-7317 or
To contact the editors responsible for this story:
Michael Hytha at +1-415-617-7137 or
Jon Morgan at +1-202-654-7370 or
Steve Geimann, Jon Morgan, Michael Hytha