Supreme Court rules EPA unreasonably interpreted Clean Air Act

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WASHINGTON (June 29, 2015) — In a loss for the Obama administration, the Supreme Court ruled that the EPA unreasonably interpreted the Clean Air Act when it decided to set limits on the emissions of toxic pollutants from power plants without first considering the costs of the industry to do so.

The ruling was 5-4, with Justice Atonin Scalia writing for the majority. Justice Elena Kagan wrote the dissent for the four liberal justices.

Bill Schuette, the attorney general for Michigan, the state named in the suit, cheered the ruling, as did several conservative voices.

“Today’s ruling is a victory for family budgets and job creation in Michigan,” Schuette said in a statement. “The court agreed that we can and must find a constructive balance in protecting the environment and continuing Michigan’s economic comeback.”

Earthjustice DC Senior Associate Attorney Neil Gormley, whose group that filed a brief in support of EPA, said the court’s ruling “doesn’t change EPA’s authority to protect the public from toxic air pollution.”

“It just gives the agency another hoop to jump through. Now EPA should act quickly to finalize these crucial health protections,” Gormley said in a statement.

The Obama administration argued that air pollutants like mercury and arsenic are associated with birth defects, cancer and other risks, especially for pregnant women and children. They say coal and oil fired power plants are the single biggest contributor to mercury contamination of rivers and lakes.

The Clean Air Act directs the EPA to regulate hazardous pollutants from power plants if the regulation is found to be “appropriate and necessary.”

The EPA determined it was appropriate to regulate coal and oil fired power plants.

At issue in this case was whether the EPA violated the Clean Air Act when it declined to consider costs in determining whether it was appropriate to regulate hazardous air pollutants.

Twenty-three states and some in the industry argued that the EPA should have considered costs when making a threshold determination on whether to regulate.

“EPA’s decision that it is ‘appropriate’ to achieve $ 4 million to $6 million in health benefits at a cost of $9.6 billion is not reasonable, imposes great expenses on consumers, and threatens to put covered electric utilities out of business,” lawyers for Michigan and 22 other states argued in Court briefs.

Opponents in the industry said that under the EPA rule the industry will be forced to spend billions of dollars to regulate conventional pollutants that are already regulated under other Clean Air Act programs.

On the other hand, the EPA argued that it didn’t take costs into consideration initially because the threshold decision is meant to be based on public health alone. Lawyers for the agency said that once it was determined that the air pollutants from coal and oil fired power plants posed a major hazard to public health they moved to the next stage of process under the Clean Air Act to determine what the limits on these pollutants should be. When they considered that issue, they did take costs into consideration.

“EPA did exactly what the Clean Air Act requires,” said Gormley. “The agency correctly focused on public health initially and considered costs once it had the information it needed.”

“When you add up all the costs and all the benefits, ” Gormley said. “The health benefits of this rule dwarf the costs to the industry. The public gets 9 dollars of health benefits for every what 1 dollar the industry spends.”

Indiana Gov. Mike Pence released a statement about the ruling, calling it a “victory” for Indiana and Hoosiers:

“For too long, the repercussions of costly regulations and federal overreach have been overlooked in Washington, where the Administration’s approach to energy policy has placed environmental concerns above all others. However, as Governor, I can confidently say the financial and economic impact of these policies are detrimental to Hoosier families and businesses alike here in Indiana.

“With today’s ruling in mind, I reaffirm my call for the Environmental Protection Agency to develop and implement energy policies that strike the proper balance between the health of the environment and the health of the economy. Only then can we ensure the safe and responsible stewardship of our natural resources and meet our shared goal of reliable, affordable energy.”