It’s ‘make-or-break day’ for EPA’s cross-state rule, E15 waiver

Source: Jeremy P. Jacobs, E&E reporter • Posted: Friday, June 21, 2013

The Supreme Court will meet today to consider whether to review two U.S. EPA programs: regulations for air pollution that drifts across state lines and its approval of increased ethanol in gasoline.

In their weekly conference, justices will weigh a request from EPA and environmentalists to examine a lower court ruling that threw out the Cross-State Air Pollution Rule (CSAPR) as well as petitions from industry challenging EPA’s approval of E15, gasoline blended with 15 percent ethanol.

Both stem from controversial rulings by the U.S. Court of Appeals for the District of Columbia Circuit, and in the CSAPR case, the Supreme Court represents EPA’s last shot to hold on to the program.

“It is definitely a make-or-break day for the cross-state rule,” said Frank O’Donnell of Clean Air Watch.

It takes four votes from justices to grant review. With most cases, the court announces whether a petition has been granted or denied the Monday following when it was considered in conference — though sometimes justices request further briefing or may relist cases for the following week’s conference.

The D.C. Circuit vacated CSAPR last August in a 2-1 ruling, holding that the program — which applies to 28 Eastern states — improperly required reductions in some states’ emissions that were greater than the amount that drifted into other states. The court also ruled that CSAPR circumvented state authority to produce its own reduction plan by immediately skipping to a federal plan (Greenwire, Aug. 21, 2012).

The ruling was a major setback for EPA, which has struggled to develop a cross-state program that stands up to legal scrutiny. D.C. Circuit judges also vacated the Bush-era Clean Air Interstate Rule, or CAIR, in 2008 because it was insufficient for protecting public health.

CAIR remains in effect now as EPA starts over with a new program, and EPA, along with the American Lung Association and other groups, asked the Supreme Court to review the D.C. Circuit ruling.

Most observers place the odds of the justices granting review at 50-50 or worse. On the plus side, the government asked the court to take up the case, which typically gives the request more weight.

In court documents, Solicitor General Donald Verrilli wrote that the D.C. Circuit made a “series of fundamental errors that, if left undisturbed, will gravely undermine the EPA’s enforcement of the Clean Air Act” (Greenwire, April 1).

Further, several states have filed court documents also asking the court to grant the case (Greenwire, April 23).

CSAPR’s proponents also point to D.C. Circuit Judge Judith Rogers’ aggressive 44-page dissent that said the ruling was “trampling” on the court’s precedent.

On the other hand, some observers noted that the case is complex and doesn’t present a split between circuit courts that typically pushes justices to grant review.

“They have an uphill battle because if you look at the dissent by Judge Rogers, it’s pretty hard to make the case that those are broad cross-cutting issues because they are very fact-specific,” said Jeff Holmstead, President George W. Bush’s air chief who now represents industry at Bracewell & Giuliani.

E15 waiver

In the ethanol case, the Grocery Manufacturers Association, Alliance of Automobile Manufacturers and American Fuel and Petrochemical Manufacturers are challenging EPA’s 2009 decision to grant a waiver for E15 fuel under the Clean Air Act.

EPA’s decision allowed for the percentage of ethanol in gasoline to rise from 10 percent to 15 percent and represented the first time EPA had used the Clean Air Act to grant such a waiver.

Industry groups have contended that E15 is a problem for several reasons. For food makers and livestock groups, it will cause the cost of corn to increase, affecting their bottom line. For auto part makers, there is a concern that customers will put E15 into vehicles not designed for it, leading to motor damage and liability claims.

And the oil sector contends that E15 would be very costly to manufacture and put on the market.

The D.C. Circuit, however, found none of those claims persuasive. In August 2012, the court ruled that the groups lacked standing — meaning they didn’t prove how they were directly injured by the waiver (Greenwire, Aug. 17, 2012).

One D.C. Circuit judge plays a prominent role in both the CSAPR and E15 decisions: Brett Kavanaugh. Kavanaugh, a Bush appointee, wrote the opinion striking down CSAPR and penned a forceful dissent in the E15 case that said the groups did have standing and that he would have ruled against EPA on the merits of the case.

Aside from the standing issue, judges had appeared somewhat receptive to industry’s points questioning EPA’s Clean Air Act interpretation during oral arguments (Greenwire, April 17, 2012).

But Justin Pidot, of the Sturm College of Law at the University of Denver, said he thinks it is unlikely the Supreme Court will take the case. Although justices have been interested in standing issues recently, he said, the conservative majority of the court likely isn’t interested in broadening the concept.

“I view the conservative justices as interested in finding cases to narrow standing, and a reversal here would seem to have to expand the doctrine,” Pidot said.

However, Holmstead, of Bracewell & Giuliani, said he thinks it’s more likely the justices take the E15 case than they do the CSAPR one.

“The idea that they didn’t have standing took a lot of people by surprise,” he said. “These are people who are undoubtedly affected.”

Recess appointments

Seperately, the court will also consider whether to grant review of a D.C. Circuit ruling that significantly narrowed the president’s ability to make recess appointments.

The case involves Washington state soft drink bottler Noel Canning, which challenged a decision by the National Labor Relations Board forcing the company to engage in collective bargaining.

NLRB’s decision came after President Obama appointed three members to the board on Jan. 4, 2012, hoping to avoid Republican opposition on Capitol Hill by using his recess appointment authority.

The D.C. Circuit, however, ruled that the Senate technically was not in recess because it was conducting pro-forma sessions. Further, the court held that the president may only make nominations during the recess between sessions of Congress — so, at the end of the year — and may only fill vacancies that also occur during that recess (E&ENews PM, Jan. 25).

If left in place, the ruling could invalidate hundreds of NLRB decisions, as well as curtail the recess appointment practice commonly used by Republican and Democratic presidents.

Legal experts expect the Supreme Court to take the case.