It is quite unusual for the Supreme Court to stay the implementation of a regulation, especially when the lower federal courts have refused to do so. Under the rules governing the grant of stay applications, the Supreme Court was required to find two things. First, that the states and industry challengers were likely to prevail in their challenge to the Clean Power Plan, and second, that these groups would suffer irreparable harm if the CPP was not stayed pending the federal courts’ resolution of the legality of that plan.
The Supreme Court’s stay of the CPP thus indicated that at least five members of the Court had significant concerns over the legality of the CPP. This is good news for the state and industry challengers who claim that the EPA has exceeded its statutory authority in aggressively regulating fossil-fuel energy generation in an effort to “transform the domestic energy industry.” While the President can at times act through agencies like the EPA, the power to execute the laws does not include a power to revise clear statutory terms. The question for the courts, then, is whether Congress vested the EPA with the power to regulate GHGs under Section 111(d) of the Clean Air Act. There are good statutory reasons to think not, and the Supreme Court’s grant of a stay suggests that the Justices will take these arguments seriously.
Second, the Supreme Court’s stay of the implementation of the CPP is good news for judicial review. Given the draconian timelines contained within the CPP, absent a stay, states and regulated utilities would have been required to take costly steps to comply long before the federal courts had determined whether that plan is a lawful exercise of agency authority. The EPA has previously used just such tactics to force compliance with unlawful regulation. Just last year, for example, in Michigan v. EPA, the Supreme Court declared certain toxic air regulations unlawful, but since the industry had already been required to comply, the Supreme Court decision meant little. As the states put it in their application for a stay:
This Court’s decision last Term in Michigan v. EPA, 135 S. Ct. 2699 (2015), starkly illustrates the need for a stay in this case. The day after this Court ruled in Michigan that EPA had violated the Clean Air Act (“CAA”) in enacting its rule regulating fossil fuel-fired power plants under Section 112 of the CAA … EPA boasted in an official blog post that the Court’s decision was effectively a nullity. Because the rule had not been stayed during the years of litigation, EPA assured its supporters that “the majority of power plants are already in compliance or well on their way to compliance.” Then, in reliance on EPA’s representation that most power plants had already fully complied, the D.C. Circuit responded to this Court’s remand by declining to vacate the rule that this Court had declared unlawful. […] In short, EPA extracted “nearly $10 billion a year” in compliance from power plants before this Court could even review the rule […] and then successfully used that unlawfully-mandated compliance to keep the rule in place even after this Court declared that the agency had violated the law.
Given this history, the Supreme Court’s grant of a stay application in the Clean Power Plan signals both that the justices who issued it thought there is merit to the challenge and that they refuse to let the EPA force compliance before the Court has had its say.
A final word about process. The order granting the stay requires the EPA to put the Clean Power Plan on ice until the Supreme Court has had an opportunity to review its legality. This means that the parties will first brief and argue the case before the D.C. Circuit with an opinion expected sometime this summer. Presumably, the losing side will then submit a petition for certiorari to the Supreme Court. Only four “yes” votes are required for the Court to review the case. Since a majority of the Court found the EPA’s position troubling, Supreme Court review on the merits is likely no matter the outcome in the D.C. Circuit. (If the challengers win, the Solicitor General will almost certainly seek review, which the Court almost always grants.)
The sad death of Justice Scalia adds an additional wrinkle. Justice Scalia was one of the five Justices who voted to grant the stay application and thus found merit to the challengers’ position. That leaves four justices who were sufficiently troubled by the Clean Power Plan to grant a stay and four justices who were not. If no new justice is confirmed by the time the Supreme Court hears this case, and each justice’s vote stays the same, then we may end up with a 4-4 tie. In that case, the lower court’s ruling will stand. Thus, the briefing and argument to take place at the D.C. Circuit this spring has suddenly become all the more important.