Tenth Circuit Ruling Bodes Poorly for Legal Challenges to Impending GHG Rule

In March 2012, EPA disapproved Oklahoma’s Regional Haze plan to improve visibility and, in its stead, imposed a federal plan that cost $1.8 billion more, but which failed to achieve a perceptible improvement over the state’s plan. Oklahoma Attorney General Scott Pruitt sued over EPA’s all-pain, no-gain Regional Haze plan in the Denver-based 10th Federal Circuit Court of Appeals, which, in July, sided with EPA in a two-to-one majority decision. Subsequently, AG Pruitt petitioned to have the entire 10th Circuit Court hear the state’s appeal. On October 31st, the court denied AG Pruitt’s petition without explanation. The state’s final recourse is to appeal to the U.S. Supreme Court.

The 10th Circuit’s ruling, if it stands, establishes a troubling precedent that could adversely affect future legal challenges to EPA’s impending greenhouse gas regulations for existing power plants. Under the Regional Haze program, EPA is required to issue “guidelines” pursuant to which States must submit visibility improvement plans. Oklahoma argued that it followed the guidelines, so EPA was required to approve the state’s plan. EPA argued that the State did not follow the guidelines.  Under administrative law, courts grant EPA a tremendous degree of deference; the question before the 10th Circuit was: How much deference should EPA afford States? The answer, according to the court, is none. If EPA reasoned that the State didn’t follow the guidelines, then the agency’s word carries the day. (Click here to read why the court’s reasoning was flawed).

The legal structure of the section of the Clean Air Act for Regional Haze is nearly identical to the provision of the act that allegedly authorizes EPA to regulate greenhouse gases from existing power plants. As such, the 10th Circuit Court’s ruling suggests that States will have minimal leeway in complying with EPA guidelines for regulating greenhouse gases from existing coal-fired power plants. Environmentalist organizations are lobbying EPA to use the guidelines to impose a cap-and-trade scheme on the States.