Reflections on the April 16th Oral Argument in Murray v. EPA and West Virginia v. EPA
In a rulemaking there is a provision for judicial review, right, it’s not going to be a question that’s avoided . . . when the rule comes out, it’s going to be challenged, we’re going to get to it. Why in the world would we resort to an extraordinary writ, which we have never used before? So it really is quite unusual.
– Judge Griffiths, remarking on the petitioner’s claim to jurisdiction in Murray Energy v. EPA and West Virginia v. EPA, D.C. Circuit Court, Oral Argument, April 16, 2015.
This statement by Judge Griffiths during Thursday’s oral argument on the states’ and utility companies’ challenge to EPA’s proposed Clean Power Plan rule pretty much sums up the skepticism voiced by he and Judge Kavanagh in hearing the case prior to EPA’s promulgation of a final rule. Despite the petitioners’ efforts to paint their challenge as justified by extraordinary aspects of the case, at least these two judges seemed to be having a hard time understanding the case as posing anything other than a garden-variety question of administrative law. As a result, while it is always somewhat risky to predict a case outcome based upon oral argument, all clues point to a 2 – 1 majority (Judge Henderson dissenting), dismissing the appeal. It could be a short-lived victory, however, as in contrast to the jurisdictional question, the panel’s views on the merits of the petitioners’ challenge – that EPA lacks authority to regulate existing power plants under Section 111(d) of the Clean Air Act considering the agency’s prior regulation of the mercury emissions of such plants – was anything but clear.
The primary question at this point in the litigation is whether a court has the power to consider that legal challenge, given EPA’s rule is only proposed and not final. Here the petitioners have an uphill battle considering longstanding precedent, not to mention the text of Clean Air Act itself, holding that a party must wait for the agency to complete the rulemaking process before it can ask a court to overturn it. The reason for this “wait and see” rule is simple: the agency is obligated to solicit and consider public comments on its proposal and the whole point of doing so is that such comments may convince the agency to change its rule. To allow a party to obtain judicial review of a proposal that may change deprives the agency of the ability to exercise its discretion when developing regulations, encourages parties to rush into court, rather than participate in the rulemaking process, and wastes judicial resources (as the final rule may be different from the proposal that the court reviews). Such premature challenges also present standing problems, because how can a party establish it is harmed by a rule that is not effective and indeed, may substantially change before it is finalized?
The utility and state petitioners seek to circumvent these precedents, arguing first that the extraordinary nature of the EPA’s rule merits review even before the agency completes the rulemaking process and issues it in final form, now scheduled for sometime this summer. But what is so extraordinary about the agency’s section 111(d)-based rule? According to the petitioners, the extraordinariness lies in the rule’s scope, which the West Virginia solicitor characterized as “fundamentally reordering the way energy is provided within our borders” as well as evidence the agency has already made up its mind on the very legal issue the petitioners are relying on to invalidate the agency rule. Hence, according to Elbert Lin, Solicitor General of West Virginia who spoke on behalf of the 11 petitioning states, waiting for the agency to complete the rulemaking process only harms the petitioners, especially the petitioning states who the Administrator has encouraged to start implementing the rule, without adding anything to the essential legal challenge the petitioners pose. “What we have here,” Mr. Lin argued, “is the highly unusual circumstance of an agency that is using the cover of a proposed rulemaking to avoid judicial review where in fact it has made up its mind on the one issue we’re talking about here.”
But Griffith and Kavanagh seemed wary of assuming the public statements of an agency head could be trusted as the definitive word of the agency on a matter under consideration in an on-going rulemaking. Judge Griffiths asked:
But aren’t there plenty of instances in which an agency announces the proposed rule, is a dogged advocate for that in public, and yet as a result of notice and comment, they amend the rule, they change the rule. Sometimes they may abandon the rule altogether. That’s not uncommon, is it?
Judge Kavanagh agreed:
But maybe the final rule will change some. I know you don’t think that that’s a possibility, but the whole point of having a comment period even when you’re adamant in the beginning is maybe you’ll tweak it, maybe you’ll change your mind entirely, sometimes people do that, sometimes courts do that, they change their mind based on arguments and reconsider things. For us to get in the middle of this before that’s happened seems highly unusual and would preclude the whole process that is designed to lead to a reasoned final result.
Only Judge Henderson seemed to lend credence to the petitioner’s argument that waiting for EPA to issue a final rule might make any difference to the posture of the essential legal question of whether EPA legal authority, stating:
I think I see this differently from my colleagues. I see a closed mind as far as the legal issue unless you line up every environmental lawyer in this country to make comments about this is legal it’s not legal. They’ve already stated their position on the legality of it and that’s not going to change with comments. I mean the only thing that is going to change it is a court telling them ‘no, you’re wrong on the law.’
The petitioners also base the court’s jurisdiction on a 2010 settlement entered into between EPA and states and environmental groups in which the agency agreed to establish greenhouse gas emissions standards for new and existing power plants.
But even Judge Henderson had trouble with this argument. In response to her question, counsel admitted that none of the state petitioners were parties to that settlement agreement. This prompted Judge Henderson to ask, how it is that the petitioner states have standing to challenge a settlement that they were not a party to? Judge Kavanagh chimed in with a comment indicating that he reads section 307(b) of the Clean Air Act to preclude court review of actions filed more than 60 days after a consent decree.
Administrative law precedents can and should enable EPA to dodge a bullet in this opening salvo on the Clean Power Plan. Administrative law precedents can and should do the same with respect to the petitioners’ arguments on the merits.
Stay tuned for more on the merits part of the Oral Argument in a forthcoming blog entry.