Supreme Court sides with EPA

Supreme Court sides with EPA
May 1, 2001

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)

In one of the most-closely watched environment rulings in a decade, the United States Supreme Court on February 27 upheld the way the Environmental Protection Agency sets clean air standards, rejecting arguments that agency officials were required to consider not only the potential health benefits of proposed standards, but also the likely compliance and implementation costs.

The justices also rejected the claim that EPA took too much lawmaking power from Congress when it set tougher standards for ozone and soot in 1997.

Justice Antonin Scalia delivered the opinion for the Court in Whitman v. American Trucking Associations. While the justices were unanimous in their support for EPA's actions, Justices Clarence Thomas, John Paul Stevens (joined by David Souter), and Stephen Breyer wrote separate concurring opinions.

Background

The high court's ruling came in two lawsuits brought by several industry groups (led by American Trucking Associations, Inc.), three states (Ohio, Michigan, and West Virginia), Representative Tom Bliley (R-Virginia), and Senator Orrin Hatch (R-Utah). A friend-of-the-court brief supporting the clean air rules was filed by New York, California, Connecticut, Maine, Maryland, New Hampshire, Pennsylvania, Rhode Island, and Vermont.

The Court was asked to consider whether §109(b)(1) of the Clean Air Act (CAA) improperly delegates legislative power to the administrator of EPA, and whether that section requires the administrator to consider implementation costs when setting national air quality standards. Two additional questions, regarding the Court of Appeals' authority to review EPA's interpretation of the CAA, were also considered.

Section 109 of the CAA delegates to the administrator of EPA the authority to promulgate National Ambient Air Quality Standards (NAAQS). In 1997, EPA had proposed to toughen its standards for atmospheric ozone and particulate matter (soot). That move was challenged in court, and in 1999, the U.S. Court of Appeals for the District of Columbia Circuit held EPA did not properly use the authority Congress delegated to it.

Specifically, according to the Court of Appeals, the agency had set limits for atmospheric ozone and particulate matter without offering "intelligible principles" to explain why the chosen standards would better protect human health than any other standard.

The appeals court vacated EPA's older standard covering particulate matter of 10 micrometers or smaller, saying the agency will "have to change the [new PM2.5] standard when it corrects the arbitrarily chosen PM[10] indicator."

The appeals court remanded to EPA, but did not vacate, the agency's eight-hour ground-level ozone standard, directing the agency to establish a better scientific basis for its proposed 0.08 parts per million standard. The court also ruled EPA must consider the benefits as well as the harms associated with ground-level ozone.

Cost-benefit analysis

While confirming that the Court of Appeals did indeed have the authority to take up the case, the Supreme Court nevertheless found the appeals court in error on the two key issues the suit raised.

On the question of whether the CAA requires, or even permits, EPA to consider costs as well as benefits when issuing air quality standards, the Court concluded such analysis is in fact barred by the Act. "The text of §109(b)," wrote Scalia, "interpreted in its statutory and historical context and with appreciation for its importance to the CAA as a whole, unambiguously bars costs considerations from the NAAQS-setting process."

In essence, the majority found that the text of the CAA is silent on whether EPA is given authority under the Act to take costs into account. Because it is silent, the majority ruled, EPA does not have the authority to do so.

In his concurring opinion, Justice Breyer disagreed with that analysis--and in so doing offered encouragement to the advocates of cost-benefit considerations.

Noted Breyer, "I believe that, other things being equal, we should read silences or ambiguities in the language of regulatory statutes as permitting, not forbidding, this type of rational regulation."

But the CAA's legislative history, according to Breyer, "along with the statute's structure, indicates that §109's language reflects a congressional decision not to delegate to the agency the legal authority to consider economic costs of compliance."

In other words, an ambiguous text without clear legislative history would, in Breyer's opinion, favor cost-benefit analysis.

Even Scalia's opinion, notes Kenneth Green, Ph.D., deputy director of Reason Public Policy Institute and director of its environmental program, offers much hope to the advocates of market-oriented environmental regulation.

"While commonly perceived as a rejection of cost-considerations in environmental policy," says Green, "at least one part of the Supreme Court's decision was actually a vindication for those who argue that cost matters.

"Justice Scalia writes," Green notes, "that it 'is unquestionably true' that 'the economic cost of implementing a very stringent standard might produce public health losses sufficient to offset the health gains achieved in cleaning the air--for example, by closing down whole industries and thereby impoverishing the workers and consumers dependent upon those industries.'

"That was exactly the argument that many [free-market environmentalists] made in the Summer of 1997, while the rules were being considered. With its ringing endorsement of the fact that cost does matter, the High Court only strengthened the hand of those who will argue for cost-consideration in other environmental protection efforts."

Delegation of authority

The decision also offered encouragement on the question of whether EPA's standard-setting actions represented an unconstitutional delegation of legislative authority.

There was disagreement among the justices, for example, as to whether the agency's standard-setting powers could even be defined as "legislative authority." And Justice Thomas' concurrence appears an open invitation to a stronger constitutional challenge than this particular case offered.

"In a delegation challenge," Scalia explains, "the constitutional question is whether the statute has delegated legislative power to the agency. Article I, §1, of the Constitution vests '[a]ll legislative Powers herein granted . . . in a Congress of the United States.' This text permits no delegation of those powers, . . . and so we repeatedly have said that when Congress confers decisionmaking authority upon agencies Congress must 'lay down by legislative act an intelligible principle to which the person or body authorized to [act] is directed to conform.'"

In essence, the majority here determined that the Clean Air Act did not confer legislative authority on EPA, but merely decisionmaking authority guided by "intelligible principles" established by Congress.

Justice Stevens, in a concurrence joined by Justice Souter, agreed with the majority's conclusion but disagreed on how that conclusion was reached.

"The Court has two choices," Stevens wrote. "We could choose to articulate our ultimate disposition of this issue by frankly acknowledging that the power delegated to the EPA is 'legislative' but nevertheless conclude that the delegation is constitutional because adequately limited by the terms of the authorizing statute. Alternatively, we could pretend, as the Court does, that the authority delegated to the EPA is somehow not 'legislative power.'"

More important, perhaps, than the debate over definitions, the majority concluded (and Stevens and Souter did not disagree) that the standard-setting authority given to EPA by the CAA "fits comfortably within the scope of discretion permitted by our precedent." While the Court of Appeals had determined that §109(b)(1) offered no "intelligible principle" by which EPA's exercise of standard-setting authority could be guided, Scalia disagreed.

"In the history of the Court we have found the requisite 'intelligible principle' lacking in only two statutes, one of which provided literally no guidance for the exercise of discretion, and the other of which conferred authority to regulate the entire economy on the basis of no more precise a standard than stimulating the economy by assuring 'fair competition.'

"The scope of discretion §109(b)(1) allows is in fact well within the outer limits of our nondelegation precedents," Scalia wrote.

A reading of Justice Thomas' separate concurrence, however--easily interpreted as an open invitation to further challenges of the Court's delegation of authority jurisprudence--might ease that disappointment.

"I write separately . . . to express my concern that there may nevertheless be a genuine constitutional problem with §109, a problem which the parties did not address," writes Thomas.

"[N]one of the parties to this case has examined the text of the Constitution or asked us to reconsider our precedents on cessions of legislative power. On a future day, however, I would be willing to address the question whether our delegation jurisprudence has strayed too far from our Founders' understanding of separation of powers."

Work remains to be done

"We're no worse off than we've been all along," said Edward W. Warren, the Rudnick & Wolfe attorney who represented the industry group respondents. Expressing the reaction of many new-era environmentalists, Warren said, "But we didn't win. That's disappointing to me."

"We are disappointed in the Court's decision not to find a constitutional problem where we thought one was clearly presented," said Michael E. Baroody, executive vice president of the National Association of Manufacturers (NAM). "We had hoped the Court would find EPA had usurped the power of Congress to make law when it substantially and arbitrarily lowered air quality standards."

NAM representatives told Environment & Climate News the group is determined to work with the White House and Congress to rein in regulatory excess by the EPA and other agencies. Said Baroody, "the public deserves a legislative branch that does not enact overly broad statutes. It also deserves an executive branch that acts openly, with restraint and clarity, and that bases its regulatory decisions on sound science and cost-benefit analyses."


For more information . . .

The full text of the majority and concurring opinions in Whitman v. American Trucking Associations may be found on the Internet at http://supct.law.cornell.edu/supct/html/99-1257.ZO.html.

Or use PolicyBot, The Heartland Institute's free online research service, to request documents #2303801 (syllabus, 3pp.), #2303802 and #2303803 (majority opinion, 26pp.), #2380805 (Breyer concurring opinion, 8pp.), #2303804 (Stevens/Souter concurring opinion, 4pp.), and #2303806 (Thomas concurring opinion, 2pp.) in Adobe Acrobat's PDF format. Point your browser to http://www.heartland.org and click on PolicyBot.

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)