State Attorneys General Challenge the EPA's Clean Power Plan

Last month, the EPA finalized major new rules requiring carbon dioxide reductions across the energy-generating industry. The rules require power plants to reduce emissions levels to 32% below their 2005 levels in the next fifteen years, and it is part of the administration’s attempt to force plants to shift from coal to wind and solar energy. President Obama views the new rules as a crucial part of his environmental legacy; he introduced his “Clean Power Plan” (CPP) as “the single most important step America has ever taken in the fight against global “climate change.”

The new rules are big, they are complex – but we’ve seen the basic story of what the administration is doing here before. In various areas of environmental policy, along with several other policy areas as well – most notably with immigration, health care, and financial regulation – the president has directed agencies to do through administrative edict what could not be accomplished through Congress. Think of the CPP as the failed cap-and-trade bill, take two – only now announced through the executive branch, rather than enacted through the legislature.

As with many previous Obama Administration attempts to work around Congress by using the administrative state, the new rules drew the near-immediate ire of state attorneys general across the country. Hours after Obama’s announcement of the CPP, West Virginia AG Patrick Morrisey announced that he, along with 14 other AGs, would vigorously oppose the rules. The AGs are asking for judicial action now, since the EPA’s tight deadlines for states to comply with the CPP mandate the expenditure of significant resources immediately. (Challenges would typically begin only after the EPA publishes the rules in the Federal Register, which in this case will not be until the end of this year). Along with this procedural argument is a statutory one claiming that the EPA exceeded its authority under the Clean Air Act and a constitutional one arguing that the Tenth Amendment prohibits the federal government from violating the states’ traditional authority over intrastate energy generation. These substantive arguments will undergird a lawsuit that likely more than 20 AGs will join following the resolution of the procedural issues. Their challenge will almost certainly reach the Supreme Court within the next couple of years.

The fight over the CPP provides a window into the broader politics of the modern administrative state. Most fundamentally, the remarkable breadth of the CPP is another reminder that the complexity of the contemporary administrative state, in effect, affords prerogative powers to aggressive regulators. In the environmental realm, the original Clean Air Act of 1970 has been followed by two major congressional amendments but – most consequentially – by countless pages of administrative regulations and court decisions interpreting these statutes.

The layering of new regulations and interpretations on top of the old, much like Congress layers new statutory law on top of the old, recalls Justice Robert Jackson’s admonition in the infamous Korematsu decision about dangerous legal precedents lying around “like a loaded weapon, ready for the hand of any authority that can bring forward a plausible claim of an urgent need.” The accretion of layers of statutes and regulations grants administrators the ability to pick and choose from a seemingly endless amount of legal ammunition to craft major new expansions of the central state. This is how, for example, the EPA came to use the Clean Air Act as a central tool in climate policy – despite the statutes not explicitly addressing greenhouse gases anywhere in the text.

At the same time that all this is going on, the “cooperative” federalism of the American regulatory state – which splits responsibility for policy implementation in many different hands and thereby obscures accountability – provides entry to numerous actors to challenge policies. The late James Q. Wilson once likened the American policy process to a “barroom brawl” featuring many actors using whatever tools at their disposal to win the fight. The AGs are one of the more recent and important participants in this brawl, pushing back against virtually all of Obama’s major regulatory initiatives.

So what can we say about the role of the AGs in these fights? For one, the rise of AGs as a political force over the past several years presents one of the stronger institutionalized oppositions to the contemporary administrative state. AGs have the resources and the platform to challenge large swaths of federal policy, sometimes successfully (such as the Affordable Care Act’s federal mandate that the states expand Medicaid). They can act as “fire-alarms,” signaling emerging problems to other policymakers, and they can build credibility and attention for challenges to new rules – not small things given the obscurity in which most administrative politics operates.

Though tempting to view the AGs as white knights slaying the mighty administrative state, it is important to remember that their activism does not just go in one direction. Indeed, another group of 15 AGs already announced that they plan to fight alongside the Obama Administration to defend the CPP. (Yes, even as the rules impose many new federal requirements on the states they represent). Much of the legal authority for new climate rules that the EPA now claims in fact grew out of AG activism in favor of a stronger centralized state during the Bush Administration. It was the Supreme Court’s 2007 decision of Massachusetts v. EPA that provided the legal basis for the Obama Administration’s climate rules by deciding (contrary to the wording and structure of the text) that carbon dioxide and other greenhouse gases fell under the definition of “pollutants” regulated by the act. Many other, less well-known lawsuits by AGs, working with environmental group allies, also served to complicate attempts to pare down expensive regulations.

AGs thus play not just a checking function on the administrative state, but can serve to expand it as well. AGs have the ability to generate legal precedents – “loaded weapons,” if you will – that future regulators can use to construct major new policies bypassing “typical” avenues of policymaking. This isn’t to say that AGs can’t be great allies to create, as Michael Greve insightfully noted here a couple weeks ago, an explicitly political/ideological connection between an anti-regulatory agenda and rule-of-law values. Indeed, shining a light on the obscure workings of the administrative state is itself a crucial function. Nevertheless, relying on the AGs to do it is a strategy that bolster centralized regulation as much as it can limit it.