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D.C. Circuit Ruling Clears Decks For Biden Power Plant Climate Rules

January 20, 2021

The Jan. 19 ruling by the U.S. Court of Appeals for the District of Columbia Circuit to scrap the Trump EPA’s rewrite of Obama-era greenhouse gas rules for power plants offers the new Biden administration a clean slate for moving quickly on its own climate change standards, though a partial dissenting opinion could offer conservatives a game plan for challenging any future policy at the Supreme Court.

Specifically, the Jan. 19 ruling by the appellate panel vacated the Trump EPA’s Affordable Clean Energy (ACE) rule, directing EPA to “consider the question afresh in light of the ambiguity we see.”

However, Judge Justin Walker, a Trump appointee, offered dissenting arguments that could invite the conservative majority on the Supreme Court to review the ruling as a way to limit courts’ deference to agencies or curb Congress’ ability to “delegate” power to agencies.

But the panel majority denied efforts by coal companies to challenge EPA’s underlying authority to regulate power plants’ GHGs under section 111 of the Clean Air Act, setting a clear path for the Biden EPA to restore or set tough new climate change rules, as the Biden campaign pledged.

Court Gives Biden New Opening to Pursue Strict Power Plant GHG Curbs

The appellate ruling vacating EPA’s Affordable Clean Energy Rule (ACE) rejects the agency’s claims that it cannot pursue beyond-the-fenceline greenhouse gas controls, giving the Biden administration a fresh opening to pursue strict power plant GHG curbs administratively or in cooperation with Congress, observers say.

Yet Walker’s dissenting opinion raises the possibility of a future review by the Supreme Court where conservatives hold a 6-3 majority, creating a potential legal risk for the Biden administration.

Walker’s opinion -- which concurs with the majority opinion on some limited issues but dissents on several key aspects -- relies heavily on the “major questions” doctrine to support his view that the Obama-era Clean Power Plan (CPP), which the ACE rule replaced, was unlawful.

“Hardly any party in this case makes a serious and sustained argument that [section] 111 includes a clear statement unambiguously authorizing the EPA to consider off-site solutions like generation shifting,” Walker wrote. “And because the rule implicates ‘decisions of vast economic and political significance,’ Congress’s failure to clearly authorize the rule means the EPA lacked the authority to promulgate it.”

D.C. Circuit Faults EPA For ‘Misconstruction’ Of 111(d) Power In ACE Rule

The divided appellate court panel that vacated the Trump EPA’s Affordable Clean Energy (ACE) rule says the exiting administration relied on a “fundamental misconstruction” of its Clean Air Act authority when it scrapped the Obama-era Clean Power Plan (CPP) climate rule and replaced it with the narrower ACE policy.

Walker argues the Supreme Court’s 2016 stay of the CPP “implied that the challengers would likely succeed on the case’s merits,” adding that the Obama rule was “arguably one of the most consequential rules ever proposed by an administrative agency.”

D.C. Circuit Vacates Trump EPA’s ACE Power Plant Greenhouse Gas Rule

The U.S. Court of Appeals for the District of Columbia Circuit has vacated EPA’s Affordable Clean Energy (ACE) power plant greenhouse gas rule, handing the agency a major defeat on the penultimate day of the Trump administration while easing the incoming Biden team’s ability to rewrite it.

The D.C. Circuit’s 2-1 decision closed the door on a significant chapter of the Trump administration’s efforts to roll back Obama’s climate and environmental regulations with eased rules that in many cases were designed to prevent a future administration from pursuing tough standards.

Walker in his dissenting view acknowledged the high court “proceeded with baby steps toward a standard for its major-rules doctrine.” While that court’s guidance “has been neither sweeping nor precise, the Supreme Court has at least drawn this line in the sand: Either a statute clearly endorses a major rule, or there can be no major rule.”

The D.C. Circuit opinion is the first ruling to grapple with the thorny administrative law issues surrounding the limits of Clean Air Act section 111(d) for climate rules – given that the high court’s 2016 stay of the CPP did not elaborate on the justices’ thinking. At the same time, the ruling issued on the eve of President Joe Biden taking office lays out a renewed path for climate rules that may be capable of surviving future potential legal battles.

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