E.P.A. v. EME Homer City Generation, L.P.
134 S. Ct. 1584
| SCOTUS | 2014Background
- The Clean Air Act (CAA) requires states to submit State Implementation Plans (SIPs) within three years of new/revised NAAQS and authorizes EPA to issue Federal Implementation Plans (FIPs) if SIPs are inadequate within two years. (42 U.S.C. §7410)
- The Good Neighbor Provision directs SIPs to prohibit in-state emissions that “contribute significantly to nonattainment in, or interfere with maintenance by, any other State” of NAAQS. (42 U.S.C. §7410(a)(2)(D)(i))
- EPA promulgated the Cross-State Air Pollution Rule (the Transport Rule) to limit NOx and SO2 emissions from 27 upwind states using a two-step test: (1) a 1% screening threshold of a NAAQS at any downwind receptor and (2) a cost-effectiveness control analysis selecting uniform cost thresholds to allocate reductions and establish state annual emissions budgets. EPA issued contemporaneous FIPs allocating budgets among in-state sources.
- State, local, industry, and labor petitioners challenged the Transport Rule in the D.C. Circuit; that court vacated the rule, holding EPA had to (a) allow states a post-budget opportunity to adopt SIPs before issuing FIPs, and (b) allocate reductions proportionally by physical contribution (excluding costs).
- The Supreme Court granted certiorari and reversed the D.C. Circuit: it held the CAA does not require EPA to give a second opportunity to submit SIPs after EPA sets budgets, and that EPA’s cost‑based, two-step allocation is a permissible interpretation of the Good Neighbor Provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAA requires EPA to give states a second opportunity to submit SIPs after EPA quantifies state budgets before issuing FIPs | States: EPA must publish state-specific emission budgets first and then allow a reasonable period for states to adopt SIPs implementing those budgets before EPA issues FIPs | EPA: Once it disapproves a SIP, §7410(c)(1) allows EPA to promulgate a FIP anytime within two years; Congress did not require EPA to publish budgets before FIPs | Court held EPA need not give a second post-budget SIP opportunity; disapproval alone can trigger FIP authority (statutory text controls) |
| Whether EPA’s two-step (1% screen + cost‑based control) approach violates the Good Neighbor Provision by relying on costs | Petitioners: Good Neighbor requires allocation strictly by physical, proportional contribution; costs are irrelevant and proportional allocation is required | EPA: Statute is ambiguous about apportionment among multiple contributors; Chevron deference permits a reasonable method that uses cost-effectiveness to allocate reductions | Court held EPA’s cost‑based allocation is a permissible, reasonable construction under Chevron; costs may be considered |
| Whether petitioners’ failure to raise specific administrative comments forecloses judicial review | EPA: §7607(d)(7)(B) bars objections not raised with reasonable specificity during comment period | Petitioners: Either they preserved objections or the statutory preservation rule is not jurisdictional | Court held the specificity requirement is mandatory but not jurisdictional; review permitted because EPA did not press it below |
| Whether the Transport Rule is invalid on its face because it may cause "over-control" or push some states below the 1% screen threshold | Petitioners: EPA’s method can force unnecessary reductions (over-control) or reduce a contributed share below the screening floor, exceeding statutory authority | EPA: Some incidental over-control is unavoidable and permissible to achieve attainment elsewhere; as‑applied relief is available for particularized injuries | Court held facial challenge fails: isolated or contested instances do not render the methodology arbitrary or unlawful; as‑applied challenges remain available |
Key Cases Cited
- United States v. Detroit Timber & Lumber Co., 200 U. S. 321 (syllabus preparatory citation in opinion) (syllabus not part of opinion)
- Pavelic & LeFlore v. Marvel Entertainment Group, 493 U. S. 120 (1989) (courts must apply statutory text, not improve it)
- Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984) (deference to reasonable agency interpretations of ambiguous statutes)
- United States v. Mead Corp., 533 U. S. 218 (2001) (defers to administrative interpretations where Congress delegated authority)
- Motor Vehicle Mfrs. Assn. v. State Farm Mut. Auto. Ins. Co., 463 U. S. 29 (1983) (agency must provide reasoned explanation for changes in policy)
- Whitman v. American Trucking Assns., 531 U. S. 457 (2001) (EPA may not consider costs when setting NAAQS; distinguishes context of Good Neighbor Provision)
- Arbaugh v. Y & H Corp., 546 U. S. 500 (2006) (distinguishes mandatory procedural rules from jurisdictional bars)
- Kontrick v. Ryan, 540 U. S. 443 (2004) (procedural rules address party obligations, not court authority)
- Babbitt v. Sweet Home Chapter, Communities for Great Oregon, 515 U. S. 687 (1995) (upholds agency interpretation in face of possible improper applications)