Court skeptical of challenge to EPA's climate rule

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Two of the three federal judges weighing a challenge to the Obama administration’s proposed emissions standards for power plants appeared skeptical Thursday of striking down the regulations before they are even finalized.

A coalition of energy companies and 15 states seeking to block the administration’s landmark climate rule acknowledged that the U.S. Court of Appeals for the D.C. Circuit, which generally has jurisdiction over agency regulations and is seen as the country’s second most powerful court, has never before overturned a draft rule.

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But lawyers told the judges that this case is extraordinary and that the Environmental Protection Agency (EPA) has already decided it is going to make the regulations final.

“Do you know of any case in which we’ve altered a proposed rule-making,” Judge Thomas Griffith asked Elbert Lin, the solicitor general for West Virginia, at the case’s oral arguments Thursday morning in Washington.

“In the nature of an appellate case, never,” Lin told the judges.

“There’s always a first. And we think this is the last,” Lin later said, prompting Griffith to ask, “Do you want to make history?”

Judge Brett Kavanaugh was also skeptical.

“For us to get in the middle of this before that happens is highly unusual,” Kavanaugh told Lin.

“The formality of the final rule being promulgated is the dividing line” between when a court can and cannot review it, he said.

Judge Karen Henderson was more open to the idea, saying that it is clear that the EPA has made a final decision that it can legally use the Clean Air Act to regulate carbon from power plants, even though the proposal is still in its public comment period.

“I see a closed mind in terms of the legal issue,” she said. “That’s not going to change with the comments.”

All three judges were appointed by Republican presidents, and Kavanaugh and Griffith have been especially skeptical of the EPA’s regulatory authority. That spurred supporters of the EPA rule to speculate that it would be a tough case for the Obama administration.

At issue is and EPA rule proposed in June 2014 that seeks to cut carbon emissions from the power sector by 30 percent by 2030. It sets individual carbon goals for states, which must formulate their own plans to meet the goal.

In the history of federal regulations, courts have always let the federal government go through its regulatory process before deciding whether an action is legal.

Justice Department attorneys have pointed to the rule-making process, which includes inviting the public to submit comments, as the first step toward having the concerns of states and energy companies heard.

Those parties will be able to then file lawsuits if they are not pleased.

“They are not entitled to the unprecedented relief of an extraordinary writ,” Brian Lynk, a Justice Department attorney arguing on the EPA’s behalf, told the judges.

The lawyers also presented the merits of their case to the court.

The Clean Air Act’s 1990 amendments passed with two conflicting additions, one from the House and one from the Senate, on the limits of “double regulating” power plants.

The House version restricts the EPA from regulating a pollutant at a plant that is already subject to emissions rules, such as applying the carbon rule to a plant where mercury output is restricted.

But the Senate version was more permissive, and the two were never reconciled.

“It very obviously bars EPA from using 111(d) to regulate source categories ... that were already regulated,” said Laurence Tribe, who was arguing for Peabody Energy, a major coal producer.

Tribe teaches at Harvard Law School and once employed President Obama as an assistant.

Murray Energy Corp., another coal producer, is the main company challenging the rule.

But the Obama administration said that the law is ambiguous and that the EPA has the right to interpret it.

“The question the court has to answer … is limited to whether EPA gets its ordinary opportunity to interpret law,” said Amanda Shafer Barnes, another Justice Department attorney.

“Do we get to do our normal job here?” she asked, referring to the ability agencies have to interpret ambiguous laws.

The judges did not say when they would rule on the case. But the EPA has said it plans to make the regulation final this summer, which could make the case moot and allow the companies and states to file suit against the finalized regulation.