Clean Power Plan’s legal future ‘a mess’

So now what? The path ahead for President Obama’s Clean Power Plan went from arduous but somewhat clear to murky with the death of Supreme Court Justice Antonin Scalia on Feb. 13.

The whirlwind week for the plan, a key commitment by the United States to reduce climate-changing carbon-dioxide emissions, started with the Supreme Court voting 5-4 to freeze the plan in place, halting implementation while legal issues are decided by the U.S. Court of Appeals for the D.C. Circuit and, likely, by the Supreme Court itself.

Scalia’s death and the battle over selecting his successor that quickly developed between Obama and Senate Republican leaders have raised the prospect of an extended period with a Supreme Court split 4-4 between conservative and liberal justices ― in other words “a mess” for the plan, according to environmental law expert Richard Lazarus, the Howard and Katherine Aibel Professor of Law at Harvard Law School.

Lazarus, who is serving as counsel in the case for two “friends of the court,” former Republican EPA administrators William Ruckelshaus and William Reilly, spoke with the Gazette about both the plan’s impending lower court hearing and its path ahead should it undergo Supreme Court review.

GAZETTE: The Supreme Court on Feb. 9 issued a stay on the implementation of President Obama’s Clean Power Plan while the courts review it. Does the Feb. 13 death of Justice Scalia affect the status of the stay, which passed 5 to 4, and how does his passing affect the legal prospects for the plan going forward?

LAZARUS: No, the stay’s status remains the same. Any final decision of the Supreme Court that Justice Scalia joined before his death retains its full force of law. The Court’s stay of the Clean Power Plan was in fact the last order the justice voted on and his vote was decisive because there were five votes in favor and four votes opposed. Had the justice not voted, the stay would have been denied by a 4-to-4 vote.

GAZETTE: When can we expect a decision by the lower court? A year after it’s argued in June?

LAZARUS: It is not unheard of for cases of this complexity to take a year to be decided. But I think the lower court is going to feel like they need to decide this one more quickly. First, because the appellate judges are going to appreciate that the longer they take, the longer the plan is stayed. Normally a case like this would take four, five, six months to decide, and, as noted, it could be decided even as much as a year later. For this one, given the stay, I would not be shocked if they try to get something out in a few months.

An additional reason they might try to do that is that the three-judge panel of the D.C. Circuit has scheduled oral argument in the case on June 2, and the judges’ clerks change at the end of August. If the judges want the same group of clerks to be there, soup to nuts, they have to get it out by the end of summer. That’s a Herculean task in a case like this.

GAZETTE: Does Justice Scalia’s death affect the prospects and timing of possible Supreme Court review?

LAZARUS: Justice Scalia’s death complicates everything. Before his death, the D.C. Circuit judges had every reason to assume the Supreme Court would review this case and have the last word. After all, the five justices who voted for the stay made quite clear, by that vote, how important they believe that the legal issues presented are.

But now, unless the Supreme Court has nine justices, the D.C. Circuit could, as a practical matter, have the last word. Why? Because there is reason to speculate based on the sharply divided vote from the justices on the stay order that there are currently four justices skeptical of the lawfulness of the Clean Power Plan and four justices who are not. If that alignment persists after full briefing and oral argument, the result would be a 4-to-4 tie, affirming whatever the lower court ruled.

On the other hand, there is also the possibility that the justices would simply hold onto the case until the Court has a full bench of nine, on the ground that an issue so important should ultimately be decided by the full Court.

But how long might that take? It is far from clear that the impasse between the president and Congress will even be broken after the next president is sworn in, unless the president and Congress are of the same political party. If the impasse continues for a year or two, at some point, will the Court give up or just keep the stay intact? In short, it’s a mess.

GAZETTE: Are you yourself involved in the litigation before the D.C. Circuit?

LAZARUS: Yes, both as a teacher and as a lawyer. In my advanced environmental law class this spring, the students in the class are spending four intensive weeks undertaking an in-depth study of the Clean Power Plan, which necessarily includes identifying the legal vulnerabilities as well as the strengths of the plan. In addition, I am also counsel of record filing what is called an amicus, or friend-of-the court brief. I have two terrific clients who are both HLS alums and former Republican administrators of EPA: William Ruckelshaus and William Reilly. Ruckelshaus was EPA’s first administrator, appointed by President Richard Nixon. Ruckelshaus and Reilly have enormous stature in environmental law, celebrated for their integrity, and both support the president’s Clean Power Plan.

GAZETTE: What parts of the Clean Power Plan are most vulnerable in this lower court proceeding?

LAZARUS: I’ll tell you where I think there’s a serious legal argument and where I think there’s not a serious legal argument. Where I think there’s not a serious legal argument is the question whether the plan is constitutional. I don’t think that is remotely plausible. I should add that my colleague, Larry Tribe, believes the opposite, but I find no merit to those arguments.

Where I think there is a serious argument is whether EPA can do what’s called “beyond the fenceline regulation.”

The linchpin of the Clean Power Plan is that it doesn’t just look at the coal-fired power plants, which are the target of the Clean Power Plan, in isolation. It doesn’t say, “What can you do to reduce greenhouse gas emissions by burning coal more efficiently or by putting on different pollution-control devices to reduce greenhouse gas emissions out of your stack?”

What the plan does instead — and I think very wisely — is it says these plants are part of a nationwide or region-wide electricity grid. And they’re connected to all kinds of other plants, some of which are fueled by natural gas, some of which are nuclear, other sources are solar, other sources are wind. We need to look to the grid as a whole and figure out how we can reduce greenhouse gas emissions throughout that grid. And looking at that grid, we think that there are several things that can be done, which EPA literally refers to in the Clean Power Plan as Building Blocks 1, 2, and 3.

For Building Block 1, EPA says that what can be done is the coal-fired power plants should be more efficient and burn less coal to produce the same amount of electricity. That’s easy and relatively noncontroversial.

For Building Block 2, EPA says that the natural gas power plants on the grid — which are not utilized as much as they could be — their utilization should go up and the coal-fired power plants should be used less because the natural gas plants don’t put out as much greenhouse gases.

Finally, for Building Block 3, EPA maintains that more renewable sources of electricity, such as solar-power and wind-power facilities, can be added to the grid, further reducing the need for the existing coal-fired power plants to produce as much electricity and therefore emit so much greenhouse gases.

In short, EPA’s approach considers the electricity grid as a whole and determines how the nation can produce the same level of electricity but with dramatically lower greenhouse gas emissions. It is in many respects a brilliantly creative plan, both in terms of reducing greenhouse gas emissions and doing so in the most cost-effective and efficient way possible.

GAZETTE: Does it allow the states to come up with plans on their own?

LAZARUS: Yes. Based on the three building blocks, EPA determines how much greenhouse gas emissions each state can reduce, but the plan neither tells the states they have to achieve that result with the same mix of controls EPA assumed in coming up with emission targets for each state, or even that the state has to come up with a plan at all.

The Clean Power Plan instead says, “States, here is what we believe can be achieved in terms of emission reductions in your state. We leave it to you to decide how best to achieve that level of reduction, but you are also free to say, ‘We would rather not come up with a plan,’ and leave it to EPA to do so.”

The Clean Power Plan never requires any state to do anything, which is very important. That’s why there’s no serious constitutional argument. If EPA had instead instructed a state, “You must do X, you must pass a certain law, you have to take a certain action or be sanctioned,” that would raise serious 10th Amendment concerns. Because the Clean Power Plan does not, no such serious constitutional issues are raised. But here again, please be forewarned that my good friend and faculty colleague Larry Tribe most certainly disagrees.

By contrast, what raises a serious legal issue — not a constitutional issue — is that there is a nontrivial argument that the statute does not allow EPA to look at more than the coal-fired power plant itself and to look to the grid as a whole. That depends on the meaning of one word in the statute, the word “system.” And that’s how the law works. Everybody in the ongoing litigation has their own competing dictionary definitions of the word “system.”

The statute says that EPA can impose restrictions — emissions limitations — consistent with the best “system” of emission reductions. EPA says that word “system” allows us to look at the grid as a whole, because the power plants are part of that interconnected system. And the other side says, “No, ‘system’ only means what the coal plants can themselves do within the four corners of our facility.” And that’s the beginning and end of the toughest legal argument the EPA faces.

GAZETTE: So the EPA is saying that they have to look at the whole system because the only way you’re going to reach the emissions goal is by taking coal out and increasing contributions from these other cleaner sources?

LAZARUS: Yes, but it’s important to recognize that the Clean Power Plan actually doesn’t assume that coal goes away. There would be a significant reduction of the electricity that coal will supply. A lot of that is happening anyway, because of the price of natural gas. The coal industry feels like it is under siege. But a lot of what they’re blaming on the Clean Power Plan is in fact just the result of free-market forces responding to dramatically lower natural-gas prices.

There’s one other significant legal issue in the case. I don’t view it as significant as the first one, but others might disagree.

There’s this very odd issue, involving the relationship between two provisions of the Clean Air Act: section 112, which restricts hazardous air pollutants from sources such as power plants, and section 111, which generally allows for regulation of existing sources such as coal-fired power plants.

In 1990, when Congress amended the Clean Air Act with hundreds of pages of new provisions, the House and the Senate each decided to change the language of section 111 to coordinate it with section 112 to make sure there wasn’t duplication between the two. To that shared end, the House passed some language and the Senate did the same, but each chamber passed different language. Normally, of course, when that happens, the House and Senate get together reconcile their differences in conference and then one version is passed by both chambers. This time, they forgot to do that. The discrepancy seems to have simply been overlooked in the hundreds of pages of the 1990 legislation.

So they didn’t notice, in this big bill, that they had both addressed the same language. So both versions simultaneously passed Congress, both were signed by the president of the United States, so they both became law. The problem of course is that they can be read to say different things.

The Senate language clearly says that if a pollutant is regulated under section 112 then it can’t be regulated under section 111. If that’s what it means, which is what EPA says, it’s easy because greenhouse gases aren’t regulated under section 112.

The coal plants say, though, that the House version can be read to say if a source is regulated under section 112, then that same source can’t be regulated under section 111. That means that if coal-fired power plants are regulated under section 112 they can’t be regulated under section 111 at all. And 111 is our greenhouse gas provision. And coal-fired power plants are of course regulated under section 112 because they put out lots of hazardous air pollutants, including mercury.

So the obvious question is what do you do with that? It’s the stuff of a bizarre law school exam. But it is not only real, the fate of the nation’s ability to address climate change under the existing Clean Air Act may well hang in the balance.

GAZETTE: Can the courts pick and choose one version over another?

LAZARUS: That’s the question: What are the courts supposed to do?

EPA’s view is that obviously we’re right under the Senate version and we think the House version can be read in a way that’s consistent. The other side says not so fast. We think the House version is what Congress said and we think the House version can’t be read the other way and we think this is something that basically should be decided by the courts. So it’s a conundrum.

I think EPA has the better argument. I think they’re entitled to deference as the expert agency, and they have some Supreme Court precedent — by analogy — on their side. But that one is really just bizarre. No way around it.

GAZETTE: So, is a plan of some sort salvageable even if EPA loses the fenceline argument?

LAZARUS: EPA was very careful to make their plans severable.

As I described, EPA’s emission-reduction targets rest on three building blocks. Building Block 1 is what the facilities themselves can do on site. Building Block 2 is using more of the natural gas and other sources on the grid. Building Block 3 is more wind and solar on the grid. So if they lose 3 and 2, they still have Building Block 1, but a lot of the reductions are currently achieved through Building Blocks 2 and 3.

Of course, if confined to just Building Block 1, EPA might well go back and sharply reduce emissions relying on only that one building block. In other words, the coal industry may need to be careful about what they wish for.