Supreme Court Deals a Major Blow to the EPA, and All Federal Agencies

The Supreme Court on Thursday severely restricted the Environmental Protection Agency’s ability to regulate greenhouse gases and fight climate change, while also setting a precedent that could severely restrict agencies’ capacity to create new regulations going forward.

In a 6-3 decision, the court ruled in West Virginia v. EPA that the agency cannot issue sweeping rules that place broad restrictions on the power industry as the Obama administration attempted with its Clean Power Plan. That plan never went into effect after a court blocked it and the Trump administration repealed it, but states and the coal industry pressed forward with their case as the Biden administration had promised to issue its own set of regulations. The court’s conservative majority found those efforts were outside of the purview of the Clean Air Act and went beyond EPA’s specifically delegated authority. 

The decision also firmly established the “major questions doctrine,” setting the precedent that agencies have little leeway in setting new regulations with major economic impact or political salience that rely on powers not clearly laid out in statutory text. Applying the doctrine to this case, legal scholars and the court’s liberal minority said, will limit the powers of agencies across government and may have a chilling effect on whether to issue certain regulations at all. 

The Clean Power Plan, finalized in 2015, was unique in that instead of setting a specific regulatory framework, it created targets that each state had to achieve. EPA went from regulating individual sources of pollution to regulating the net pollution from an entire national system. The administration’s effort to point to statutory language directing EPA to regulate the “system of emission reduction” to justify its efforts, but the court’s majority  said that verbiage was inadequate to compel the sweeping changes the Biden administration is pursuing. 

“Such a vague statutory grant is not close to the sort of clear authorization required,” Chief Justice John Roberts wrote in the majority opinion. 

The majority called the administration’s view of EPA's authority "unprecedented" and said there was "little reason to think Congress assigned such decisions to the agency." 

EPA was creating “a transformative expansion of its regulatory authority in the vague language of a long-extant, but rarely used, statute designed as a gap filler,” Roberts said. The agency was looking to “adopt a regulatory program that Congress had conspicuously declined to enact itself.”

Under the major questions doctrine, the majority said, agencies must point to clear authorization from Congress to justify their regulatory efforts. Applying the doctrine was necessary to prevent agencies from “asserting highly consequential power beyond what Congress could reasonably be understood to have granted.”

Environmental advocates and scholars of administrative law have been closely monitoring the case, fearing a decision such as the one issue Thursday would have far-reaching impacts. Civil servants working at regulatory agencies are now operating under a new reality, they said. 

"Because it’s so amorphous and it’s unclear when it applies, for people who have to write regulations, it’s going to be a whole new world under this scheme," said Kirti Datla, director of strategic legal advocacy at Earthjustice, an environmental law group. The decision “creates a deterrence effect and makes [agencies] a lot more hesitant" to write new rules.

Lawrence Gostin, a professor at Georgetown University's O'Neill Institute for National and Global Health Law, said the decision would have "profound" ripple effects by not just tying EPA’s hands but also by hamstring agencies such as the Centers for Disease Control and Prevention, Occupational Safety and Health Administration, Food and Drug Administration and the Centers for Medicare and Medicaid Services.

“This move was part of the conservative court’s larger agenda to gut the regulatory state and decimate executive powers to protect Americans’ health and safety,” Gostin said. “The breadth of this opinion goes beyond the EPA’s ability to regulate the environment and touches the authority of all federal agencies that issue regulations to protect our environment, health, and safety.”

In a dissenting opinion, Justice Elena Kagan said the limits the majority opinion has placed on EPA “fly in the face of the statute Congress wrote” and deprive EPA “of the power needed—and the power granted—to curb the emission of greenhouse gases.” She noted the court had never previously used the phrase “major questions doctrine” and said lawmakers have always leaned on agencies to interpret and enforce the laws they write. Lawmakers do not always know enough to regulate the specifics of an issue, the minority said, and therefore rely on the experts at federal agencies. 

“Congress makes broad delegations in part so that agencies can adapt their rules and policies to the demands of changing circumstances,” Kagan wrote. “To keep faith with that congressional choice, courts must give agencies ample latitude to revisit, rethink, and revise their regulatory approaches.”

The three minority members said the majority was willing to abandon its usual constitutional interpretation in certain circumstances, such as to attack the administrative state. 

“Today, one of those broader goals makes itself clear: prevent agencies from doing important work, even though that is what Congress directed.” 

Going forward, Earthjustice’s Datla said, the decision “shifts more power to courts and gives them this malleable rule to apply.” 

In a concurring opinion, Justice Neil Gorsuch celebrated that the majority was taking steps to rein in federal agencies’ regulatory powers. If not properly checked, he said, the executive branch would “pose a serious threat to individual liberty.” 

“In a world like that, agencies could churn out new laws more or less at whim,” Gorsuch wrote. “Intrusions on liberty would not be difficult and rare, but easy and profuse.”