West Virginia v. Environmental Protection Agency strikes down a federal environmental regulation of power plants that never took effect, that the Biden administration has no intention of reinstating, and that would have accomplished absolutely nothing even if it had be enforced.
Nevertheless, the Court voted along ideological lines to strike down this regulation that the EPA drafted under authority granted by the Clean Air Act, claiming that it amounts to an “extraordinary” overreach by the EPA. And their decision has enormous implications both for the environment and for the federal government more broadly.
At the very least, the West Virginia decision strips the EPA of its authority to shift energy production away from dirty coal-fired plants and toward cleaner methods of energy production — although market forces have thus far accomplished much of this shift on their own, because coal-fired plants are often more expensive to operate than cleaner plants. The decision could also lead to additions limits on the EPA’s ability to regulate that industry going forward.
The West Virginia decision confirms something that has been implicit in the Supreme Court’s recent decisions governing federal agencies’ power to issue binding regulations under authority granted by Congress: When a majority of the Supreme Court disagrees with a regulation pushed out by a federal agency, the Court has given itself the power to veto that regulation — and it will do so by invoking something known as the “major questions doctrine.”
Under this doctrine, the Court explained in a 2014 opinion, “we expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance.’” Thus, if a majority of the Court deems a regulation to be too significant, it will strike it down unless Congress very explicitly authorized that particular regulation.
This doctrine comes from nowhere. Last week, the Court said that abortion is unprotected by the Constitution — leaning heavily on the fact that abortion is not mentioned in the Constitution. But the the major questions doctrine is also mentioned nowhere in the Constitution. Nor can it be found in any statute. The justices made it up. And, at least during President Joe Biden’s administration, the Court has wielded it quite aggressively to veto regulations that the Court’s conservative majority finds objectionable.
Roberts’s majority opinion in West Virginia does put some flesh on the fairly bare bones the justices have previously used to describe when they will declare something to be a “major question.” Roberts faults the EPA for issuing a novel kind of regulation pursuant to a “long-extant” statute that had not previously been used to justify similar actions. He claims that the EPA relied on an “ancillary provision” of the Clean Air Act, rather than a more central provision of that law. And he criticizes the EPA for issuing a regulation which resembles bills that Congress previously considered but did not enact.
But these judgments are divorced from the text of the Clean Air Act itself. And Roberts admits that the major questions doctrine can nuke a regulation even when there is a “colorable textual basis” supporting that regulation — that is, when the actual words of a federal law could support the action taken by a federal agency.
The bottom line after the West Virginia decision is that agencies may still exercise regulatory authority, but only subject to a judicial veto. The Supreme Court has effectively placed itself at the head of much of the executive branch of the federal government.
Federal regulations, briefly explained
When Congress wishes to regulate businesses or private individuals, it can do so in two ways. One way is that it can simply command a person or industry to conduct business in a specific way. Congress may, for example, order health insurers to cover people with preexisting conditions. It may require employers to pay a minimum wage. Or it could insist that all power plants to install a particular device that reduces carbon emissions.
The problem with this direct approach, however, is that when Congress issues such a specific command, it can only change that command by enacting a new federal law. Suppose, for example, that Congress had passed a law in 1978 requiring coal-fired plants to install a particular device to reduce pollution. That device would almost certainly be obsolete today. Indeed, it could potentially interfere with more recent technology that would do a much better job of limiting emissions.
So Congress also has the power to delegate regulatory authority to a federal agency: laying out a broad policy goal that the agency must try to solve, then giving the agency a fair amount of discretion to determine, in its own expert opinion, how to solve it. This allows federal law to be more adaptive, with regulations shifting as new facts justify updated rules.
Congress, for example, could not have known in 2010, when the Affordable Care Act became law, that a deadly new disease would emerge in 2019 that would paralyze much of the world economy until vaccines made it safe for most people to emerge from their homes. But Covid-19 vaccines are still covered by health insurance, partly because the Affordable Care Act contains a provision requiring the Department of Health and Human Services to maintain a list of vaccines that health insurers must cover — while also permitting HHS to add new vaccines to this list as new diseases and immunizations emerge.
The provision of the Clean Air Act at the heart of the West Virginia case functions similarly. It requires certain power plants to use the “best system of emission reduction” that can be achieved with currently available technology, while also accounting for factors like cost. The EPA, meanwhile, has the authority to determine what the “best system” is at any given moment, and it can issue new regulations requiring energy companies to adopt new systems as technology advances.
The Court’s decision in West Virginia does not strip the EPA of this authority entirely — the agency might still be able to require coal-fired plants to install certain devices, for example — but it drastically reduces the EPA’s power. And it warns the EPA — and every other federal agency — against using its regulatory power in new ways, lest the Supreme Court be tempted to invoke the major questions doctrine and veto the agency’s rule.
The actual regulation at issue in West Virginia did nothing at all
One irony of Chief Justice Roberts’s declaration that West Virginia is an “extraordinary case” that requires the Supreme Court to exercise its self-given veto power over federal regulations is that the actual regulation at issue in the case didn’t amount to much of anything.
The case involves the Clean Power Plan, an Obama-era effort to fight climate change, which was touted as the Obama administration’s most ambitious climate policy initiative when it was announced in 2015. Roberts’s opinion speaks of this plan in alarmist terms, pointing to seven-year-old projections which claimed that the plan “would entail billions of dollars in compliance costs,” “eliminate tens of thousands of jobs,” and “would cause retail electricity prices to remain persistently 10% higher in many States.”
Meanwhile, Obama’s EPA predicted that, by 2030, the Clean Power Plan would lower carbon emissions from power plants by about a third below where they stood in 2005.
But the Clean Power Plan never took effect; the Supreme Court voted along party lines in 2016 to temporarily block it, and it was later abandoned by the Trump administration. It also turns out that it wouldn’t have done anything even if it had been in effect.
That’s because the plan relied upon what Roberts labels “generation shifting” — shifting the production of energy from dirtier coal-fired plants to other, cleaner sources of energy. And the energy industry didn’t actually need a government regulation to force it to shift away from coal-fired plants because the oldest, dirtiest plants are more expensive to operate than cleaner plants. So the dirtiest plants were retired.
The energy industry wound up achieving the Clean Power Plan’s 2030 emissions reduction goals by 2019, not because of the heavy hand of regulation, but because of good ol’ free market capitalism. (Coal executives also complained that unrelated Obama-era rules restricting mercury emissions also led them to shut down coal plants.)
Nevertheless, West Virginia deems the Clean Power Plan to be a sin against the major questions doctrine because the impotent plan attempted to “substantially restructure the American energy market” by changing how electricity would be produced. The holding of West Virginia is that the Clean Air Act “did not clearly authorize the EPA to engage in a ‘generation shifting approach’ to the production of energy in this country.”
Again, this is a policy judgment. The text of the Clean Air Act instructs the EPA to determine the “best system of emission reduction.” It does not say that the “best system” cannot involve shifting the energy industry away from coal and toward cleaner power.
But, in inventing the major questions doctrine out of thin air, the Supreme Court gave itself the power to make these kinds of policy judgements.