The Regulatory State on Autopilot (I)

In countries such as Germany (see recent post), climate change regulation proceeds by idiotic, popular and partisan consensus. Stateside, there’s less enthusiasm for post-carbon fantasies. Thus, climate regulation must be and has been put on autopilot. Two recent D.C. Circuit decisions (described below) illustrate the point. They also illustrate the need to think a bit harder about the administrative state. Today, the decisions; tomorrow, the lessons.

The Trajectory So Far (skip if you know the playing field)

Congress never said that greenhouse gases are “pollutants” for purposes of the Clean Air Act. But the Supreme Court did, in Massachusetts v. EPA (2007)—on the theory that no “extreme” or “counterintuitive” consequences would ensue from this never-contemplated but nonetheless “plainly intended” extension of the CAA. The Court strongly hinted (though it did not precisely hold) that EPA must determine whether greenhouse gases endanger health, welfare, etc. That endangerment finding (whose outcome was a foregone conclusion) in turn mandates regulation.

By its terms, Mass v. EPA applied only to the regulation of mobile sources (cars etc.) under Title II of the CAA. However, along with issuing an endangerment finding and a GHG rule for automobiles, EPA took the position that the regulation of pollutants under Title II automatically triggers the regulation of stationary sources under Title V and the “Prevention of Significant Deterioration” (PSD) program of the act. To ensure that only ”major” emission sources (such as utilities and refineries), would be covered, Congress wrote numerical thresholds into the CAA. When applied to GHGs (as opposed to conventional pollutants) those thresholds would mean that hundreds of thousands of hospitals, farms, and mansions would be covered and need a permit. To avoid that confessedly “absurd” result, EPA “tailored”—i.e., re-wrote—the statutory, numerical thresholds. In Coalition for Responsible Regulation v. EPA (2012), the D.C. Circuit upheld EPA’s cascading rules, first by panel decision and then en banc. It never reviewed the “Tailoring Rule” directly, on the grounds that all the petitioners lacked standing. Instead, it held (1) that EPA had rightly refused to take the confessed “absurdity” into account in making an endangerment finding; and (2) that stuff that’s a pollutant for one part of the CAA is a pollutant for all parts.

Cert petitions (nine of them) are pending. Meanwhile, EPA is motoring along on the authority of the Coalition decision. Two of its numerous GHG rules (in various stages of contemplation and/or completion) are the subjects of recent D.C. Circuit decisions.

One Fine July, at the D.C. Circuit

Texas v. EPA, 2013 WL 3836226 (C.A.D.C.)) (July 26) posed the question of how long states may wait in incorporating GHG permitting requirements into their state implementation plan (SIP) before the EPA imposes its very own federal implementation plan (FIP). Not very long, said the Circuit (Judges Rogers, Tatel; Kavanaugh dissenting): the CAA’s permitting requirements are “self-executing,” see Coalition. The petitioning states (Texas and Wyoming) characterized the consequences as “absurd,”—and why not, considering that EPA had invoked “absurdity” in defense of re-writing the statute in the first place? No dice, though: “[A] bare assertion of absurdity cannot overcome the plain meaning of a statute: ‘there must be evidence that Congress meant something other than what it literally said before a court can depart from plain meaning.’ “ Now they’re telling us…

The second case, Center for Biological Diversity v. EPA, 2013 WL 3481511 (C.A.D.C.)) (July 12), arose over an EPA rule deferring regulation of “biogenic” GHGs—non-fossil-fuel carbon dioxide sources such as ethanol—for three years. The obvious point here is that some biogenics—not humans or cows, but rotting wood, ethanol, and swamps—are the good guys. Not good enough, though, for environmental groups, who sought review of EPA’s “Deferral Rule” as arbitrary and capricious. A divided Court (Judge Tatel writing; Judge Henderson dissenting) agreed, firmly rejecting all of the EPA’s putative defenses. To wit:

  • EPA argued that it could treat biogenic CO2 sources differently from other GHGs because these sources have unique characteristics that were “unquestionably unforeseen when Congress enacted [the] PSD” program. “We’re deep in la-la land,” the court could have said. “Congress didn’t foresee that any GHG would be regulated under any part of the CAA.” But that’s water under the bridge after Mass and Coalition. So instead, the court dinged the defense on the grounds that it didn’t appear in the record, only post hoc in the briefs. That, every law student knows, doesn’t count for purposes of judicial review.
  • The record did reflect EPA’s reliance on a “de minimis” exemption for biogenic sources, but the EPA abandoned that in its briefs. So much for that.
  • Next, EPA invoked a “one-step-at-a-time” doctrine: we don’t have to regulate everything all at once. Notably, EPA also invoked that doctrine, alongside “absurdity,” in defense of its Tailoring Rule. It’s an excellent question whether that so-called canon allows an agency to depart from an unambiguous statutory mandate. Coalition evaded that question on account of the “no standing” determination. The CBD court skipped it again, holding that an agency that relies on “the one-step-at-a-time doctrine must, at a minimum, articulate (1) what it believes the statute requires and (2) how it intends to achieve that goal. Otherwise, reviewing courts will have no basis for evaluating whether the agency is in fact moving” to “a complete solution.” In this case, EPA had failed to do so: “[T]he Deferral Rule is one step towards … what?” Next question.
  • Finally, EPA relied on its best friend, the absurd results doctrine: it’s okay to exempt biogenics, it said, because “emissions of CO2 derived from certain forms of biomass may not only fail to endanger public health and welfare, but in fact may benefit the public by reducing the net emissions of CO2.” But that defense, too, had occurred to EPA only in its briefs, and so court again rejected it as post hoc.

Absurdity and Momentum

Attentive readers will have noticed that “absurdity” comes up a lot. It’s a very esoteric, rarely invoked AdLaw canon. It’s nonetheless a staple of contemporary CAA litigation, because the idea of regulating global warming under a statute that’s designed for local pollution is completely insane. But Mass v. EPA pooh-poohed that point, and Coalition extended its holding to stationary sources, and now EPA has to make it up as it goes along and the D.C. Circuit bobs and weaves, deciding in this or that case whether it will let the agency re-write the statute. “That is not how the administrative process is supposed to work,” Judge Kavanaugh wrote in CBD. Indeed not. (With “mixed feelings,” Judge Kavanaugh nonetheless concurred: he dissented in the en banc Coalition case but is now bound to follow it.) It’s the administrative process according to Mcfadden & Whitehead: Ain’t no stoppin’ us now.  (“We’re on the move … where we’ll end up I don’t know/But we won’t let nothing hold us back.”) Tomorrow, some lessons.