Summarizing Massachusetts v. EPA

The following is a summary of what the Supreme Court decided in Massachusetts v. EPA. The lawsuit arose out of EPA’s decision to deny a rulemaking petition asking the agency to regulate greenhouse gases pursuant to the agency’s authority under the Clean Air Act. The questions that the Court considered and answered in its majority opinion deal with greenhouse gases only tangentially; the debate in the Court centered on legal questions about lawsuits and government agency powers. The issues that the Court decided upon addressed: (1) whether the plaintiffs in the case should have been allowed to sue and (2) whether EPA properly denied the petition for rulemaking. While summarizing the Court’s decision on these questions, we will need to cover a few legal concepts that were central to the Court’s thinking—we will cross those bridges as they come along.

How the case came about

Federal agencies create regulations primarily because Congress directs them to through statutes. The agencies are also bound by those statutes—they cannot overreach and regulate more than Congress has directed. Thus, agencies are the government entities that implement laws. People often challenge agencies in court for regulating beyond the authority granted in a statute. Conversely, agencies can be challenged for not doing enough under a given statute. That is what happened here.

In 1999, 19 private organizations sent a petition to EPA telling the agency that it should regulate greenhouse gases according to the Clean Air Act. EPA published a note in the Federal Register asking the public to comment on the issues raised in the petition. The White House also asked the National Research Council to identify where there were uncertainties in climate change science. In 2003, EPA denied the rulemaking petition saying that it had no authority to regulate greenhouse gases under the Clean Air Act. To boot, EPA gave several policy reasons that, if it had authority, it would still decline to regulate.

The petitioners challenged EPA’s decision at the D.C. Court of Appeals (the Clean Air Act allows exactly such challenges that skip the trial court level because the challenge is about EPA’s government power rather than about facts that would be determined in a trial). Joining in the petitioner’s cause were several state and local governments, including Massachusetts.

The Appeals court ruled against the petitioners. One judge jumped straight to the issue and decided that EPA did nothing wrong in deciding not to regulate greenhouse gases for policy reasons. Another judge decided against the petitioners on procedural grounds, writing that the petitioners should not have been able to sue EPA in the first place. With two out of three judges deciding against them, the petitioners lost. They appealed and the Supreme Court accepted the case.

The Court considered two major issues to decide the case; one issue focuses on the petitioners, the other on EPA. We will first look into why the court spent 15 pages discussing whether petitioners could rightfully sue—an issue called “standing.” Then, we will consider the Court’s discussion that focuses on whether EPA acted properly.

Whether Massachusetts can sue EPA

The Constitution limits federal courts to hearing “cases” and “controversies;” which is to say, courts do no simply opine on any issue they want. There must be a plaintiff that suffers some actual injury for which we can (or can’t, as the case decides) ascribe causation to a defendant that, upon such finding of blame, can redress the injury. The elements bind courts to the role of deciding precise disagreements rather than creating law out of whole cloth.

The legal term of art for the above elements is “standing.” A plaintiff must have standing (i.e.., must have an injury and must identify the person that can be blamed for and can redress the injury). These elements are important because four out of nine Justices wanted to dismiss the case believing that the petitioners did not satisfy the standing requirement.

The Court discussed only Massachusetts’ standing because, for the purposes of this case, only one petitioner needed to show standing and the lawyers picked Massachusetts. In addressing whether there is an injury (the first of the standing elements), the Court first considered Massachusetts as a state. The Court emphasized the “special position and interest” of Massachusetts.

A state’s interest extends to its capacity as a sovereign entity—that, as the Court quotes Justice Holmes, it can control “whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air.” This role of the state as a governing entity is important because the federal government has assumed the prerogative of assuring clean air. Because this prerogative has shifted from state to federal jurisdiction, the state enjoys a “special solicitude” in the Court’s standing analysis.

Many commentators have written about, and most of Chief Justice Roberts’ dissent complains about, the Court creating a new, relaxed standard for allowing states to have standing. However, rather than affording the state a relaxed ability to sue, the Court’s discussion correctly recognizes the context in which it decides whether there is standing (injury and a defendant we can blame and that can redress the injury).

Indeed, the discussion of Massachusetts’ injury is straightforward: the state, in its capacity as a landowner, is losing coastal lands (beyond normal erosion) due to rising sea levels caused by global warming. The state also asserted impaired of air quality. The argument against this first element of standing is that the injury is not particular to Massachusetts. In response, the Court noted that the widely shared nature of the injury does not diminish Massachusetts’ injury.

Having established an injury, the Petitioners needed to show that they brought in the person that caused the injury and can redress the injury. Remember, this case is about EPA’s role in regulating the greenhouse gases that are injuring Massachusetts. No party in the case disputed that greenhouse gas emissions cause global warming and contribute to the claimed injuries. EPA’s argument, rather, focused on the inadequacy of redressability in the case—in other words, EPA said it could not mitigate global climate change, especially in light of developing nations like India and China contributing to climate change.

The Court rejected that argument. Government commonly works one step at a time. For standing considerations, the defendant’s inability to redress fully the plaintiff’s injury does not destroy the plaintiff’s ability nevertheless to sue the defendant to spur some relief. As the Petitioners argued, the U.S. transportation sector contributed 1.7 billion metrics tons of carbon dioxide in 1999. If the EPA removed some portion of that contribution, the harm caused by global warming will be reduced.

Massachusetts, having shown a concrete injury and having brought into to court the entity causing that injury (by not regulating) and that can redress the injury, has standing. The case can move on; thus, we turn to the Court’s discussion of whether EPA acted unlawfully in denying the petition for rulemaking.

EPA’s denial of the petition and the agency’s discretion

As mentioned above, agencies are the government entities that implement Congress’ laws. But, laws are not always clear, and agencies often must exercise some interpretation while transforming Congress’ laws into the rules that actually affect people and industry.

An agency is often challenged in courts by litigants claiming the agency did something wrong while translating a law to a regulation. Courts are familiar with this frequent fight and generally favor affording agencies some discretion in interpreting statues. However, courts need some way to determine whether an agency deserves this discretion (because the agency consists of experts) or whether the agency has gone beyond the realm of reason while turning statutes into rules. The test that courts use when deciding this question was formulated in a 1984 case called Chevron v. NRDC, and is commonly referred to as “Chevron deference.”

Under Chevron deference, if the statute that the agency interprets is ambiguous (in other words, if there is room for interpretation), the court will defer to the agency’s interpretation. However, if that interpretation is unreasonable, the court will analyze the agency’s action (or inaction) with no deference to the agency. So there are two prongs: (1) was the statute clear or ambiguous; and (2) if ambiguous, did the agency make at least a reasonable interpretation?

Returning to Massachusetts v. EPA, in denying the petition for rulemaking, EPA said: (1) the agency did not have authority to regulate greenhouse gases under the Clean Air Act; and (2) even if EPA had the authority, it would decline to regulate. We will address the two points in that order.

The Court struck down EPA’s first authority-based argument with the first prong of the Chevron test; the clarity of the statute precludes EPA’s interpretation that it could not regulate greenhouse gases. The statute requires EPA to regulate “air pollutants from … motor vehicle engines, which … cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” EPA had interpreted “air pollutant” not to include greenhouse gases. But, the Court said, the statute unambiguously includes greenhouse gases in the definition of air pollutant:

The statutory text forecloses EPA’s reading. The Clean Air Act’s sweeping definition of “air pollutant” includes “any air pollution agent or combination of such agents, including any physical, chemical … substance or matter which is emitted into or otherwise enters the ambient air ….” On its face, the definition embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word “any.” Carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are without a doubt “physical [and] chemical … substance[s] which [are] emitted into the ambient air.” The statute is unambiguous.

So, EPA loses the first argument (that they have no authority to regulate) because the statute clearly allows EPA to regulate greenhouse gases. The language of the statute, quoted above, is important because it informs the next question: did EPA properly decide that it would decline regulating greenhouse gases for the time being?

This aspect of the case is entirely about an agency’s discretion. Usually, it is very hard to lose a case as an agency declining to regulate. Yet, EPA lost. The Clean Air Act contains a provision on how courts decide whether EPA properly exercises its discretion in turning down a petition: the EPA loses if the decision is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”

Turning to the issue in this case ,the Clean Air Act, said the Court, allows the agency to decide how to regulate, but does not allow the agency to decide what to regulate. To avoid regulating greenhouse gases as the petition urged, EPA needed to either determine that the asserted greenhouse gases cannot “reasonably be anticipated to endanger public health or welfare;” or the agency must offer a reason not to regulate.

EPA tried to offer reasons not to regulate: several voluntary programs are in place, the President is pursuing technological improvement approaches, regulations might hinder international negotiations on global warming policy, and so on. The Court did not find these reasons adequate because “they have nothing to do with whether greenhouse gas emissions contribute to climate change.”

The Court’s opinion suggests that when an agency makes a decision regarding whether or not to pursue rulemaking, it must ground that decision in the language of the statute. Here, the Petitioners asked the agency to regulate greenhouse gases because they are pollutants that the Act requires EPA to regulate.

The relevant language of the statute requires that EPA’s response address, head on, the science of greenhouse gases, and the costs and benefits of regulating them. The policy-centered reasons that EPA offered did not satisfy this requirement; nor did EPA’s assertion that too much uncertainty surrounds the features of climate change. EPA only asserted uncertainty at the margins of the global warming issue. Such “residual uncertainty” is not sufficient to excuse EPA’s refusal to determine outright whether greenhouse gases “endanger public health or welfare.” Thus, EPA’s explanation in response to the petition was “arbitrary, capricious, … or otherwise not in accordance with the law.”

A small conclusion

Reasonable people can differ on whether the Court has created a new legal hurdle for agencies responding to petitions for rulemakings. Many commentators, along with Justice Scalia’s dissent, wonder why the EPA had to make a judgment at all regarding greenhouse gases simply because of the filing of a petition. On the other hand, it makes sense to ground a determination of whether the agency acts arbitrarily or capriciously on the underlying statute.

The Court did not prescribe EPA’s decision—the agency can decline to regulate greenhouse gases for reasons more adequately connected to the Clean Air Act. However, the Court surely hinted that it (at least, five of the Justices) are convinced of some basic elements of climate change: greenhouse gases are sufficiently “air pollutants” that EPA can regulate, global warming results from greenhouse gases, and actual harms result. EPA would have a great deal of difficulty refusing to regulate on the basis of the air pollutants having insufficient harm to public health or welfare. Thus, it is very likely EPA will soon be pursuing cost/benefit, and other, analyses of carbon emission regulations to determine how to regulate greenhouse gas emissions.

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