EPA’s Announcement That it Will Reconsider Endangerment Finding Cites Landmark Loper Bright Decision

The EPA recently announced that it will formally reconsider its 2009 Endangerment Finding in which it deemed carbon dioxide, methane, and four other gases as “air pollutants,” as well as “all of its prior regulations and actions that rely on the Endangerment Finding.” That is a big deal because the Endangerment Finding has been used to justify “seven vehicle regulations with an aggregate cost of more than one trillion dollars” and “has also played a significant role in EPA’s justification of regulations of other sources beyond cars and trucks,” such as power plants.   Needless to say, how this process plays out could have major impacts on the national economy.

But like many such consequential matters, EPA’s reconsideration of Endangerment Finding turns, in part, on questions of statutory interpretation. And as EPA’s announcement notes, after the agency issued the Endangerment Finding in 2009, “major Supreme Court decisions in the intervening years, including Loper Bright Enterprises v. Raimondo . . . have provided new guidance on how the agency should interpret statutes to discern Congressional intent and ensure that its regulations follow the law.”

Background

Under the Clean Air Act, the EPA “Administrator shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” Under the statute, if EPA makes an endangerment finding with respect to an “air pollutant,” as defined by the CAA, it must then issue regulations.

In a 2007 decision, the Supreme Court ruled 5-4 in Massachusetts v. EPA that greenhouse gases are “air pollutants” and thus EPA has the authority under CAA to regulate new motor vehicles emission of greenhouse gases. But the Court did not address “whether on remand EPA must make an endangerment finding” for greenhouse gases “or whether policy concerns can inform EPA’s actions in the event that it makes such a finding.” Justice Scalia, joined by Chief Justice Roberts, Justice Thomas, and Justice Alito, dissented, disagreeing with the majority’s views on the scope of the EPA Administrator’s discretion to make an endangerment finding, as well as the majority’s interpretation of “air pollutant” to necessarily include gases like carbon dioxide. In a colorful footnote, Justice Scalia wrote that “[it] follows” from the majority’s conclusion that carbon dioxide is an “air pollutant” under the CAA “that everything airborne, from Frisbees to flatulence, qualifies as an ‘air pollutant.’ This reading of the statute defies common sense.”

Following Massachusetts v. EPA In 2009, the EPA chose to issue an Endangerment Finding for greenhouse gases and a host of highly consequential regulations flowed from it. EPA is now reconsidering that decision. Loper Bright and other intervening Supreme Court precedent will certainly play a role in that process. 

Enter Loper Bright

Loper Bright overruled Chevron v. NRDC—which required courts to defer to federal agencies’ views on what the law is under certain circumstances—and held that courts may no longer “defer to an agency interpretation of the law simply because a statute is ambiguous.” As the Supreme Court observed in Loper Bright, “statutes, no matter how impenetrable, do—in fact, must—have a single, best meaning” that “is fixed at the time of enactment.” And “[i]n the business of statutory interpretation, if it is not the best, it is not permissible.” But as the Court noted, “[t]hat is not to say that Congress cannot or does not confer discretionary authority on agencies. Congress may do so, subject to constitutional limits, and it often has.” And as the Court explained, “the statute’s [best] meaning may well be that the agency is authorized to exercise a degree of discretion.” Among other things, some statutes “empower an agency to prescribe rules to ‘fill up the details’ of a statutory scheme or to regulate subject to the limits imposed by a term or phrase that ‘leaves agencies with flexibility,’ such as ‘appropriate’ or ‘reasonable.’” (citations omitted). Footnote 6 of the Court’s opinion in Loper Bright provides two examples of this type of statute, both of which are also administered by EPA and appear to use language that is similar to the provision of the CAA authorizing the EPA Administrator to make endangerment findings.

Given Massachusetts v. EPA’s holding that greenhouse gases like carbon dioxide are subject to regulation under the CAA (regardless of whether that case was correctly decided and what the “best” reading of the CAA’s definition of “air pollutant” is), a salient question in EPA’s reconsideration process is the extent of the EPA Administrator’s “judgment”—that is, discretion or “flexibility,” to borrow from Loper Bright—to decide whether something falling within the statutory definition of “air pollutant” should (or should not) be the subject of an endangerment finding and thus EPA regulation under the CAA. It will be interesting to see how Loper Bright bears on that and other important questions as the EPA formally reconsiders its Endangerment Finding.