Primer: The Ongoing Controversy over Whether Clean Air Act §111(d) Authorizes EPA’s Clean Power Plan

by William Yeatman on July 2, 2014

in Blog

Background: Three Types of Laws

There are three types of “official” laws, and their differences figure prominently in the fate of EPA’s recently proposed Clean Power Plan.

  • Slip Laws: These are the individual acts and resolutions passed by Congress & signed into law by the President.
  • Statutes at Large: All slip laws during a given Congress are bundled into session laws, which are compiled into the Statutes at Large.
  • United States Code: Statutes at Large are terrible for searching purposes; since 1926, the Statutes at Large have been organized in the United States Code so as to make easier legal research.

The United States Code establishes “prima facie” the laws of the United States (1 U.S.C. § 54 (a)), but the text of the Statutes at Large is “legal evidence” of the laws enacted by Congress (1 U.S.C. §112).. It follows that the Code controls, unless it is “inconsistent” with the Statutes at Large, the ultimate authority. (Stephan v. U.S., 319 US 423, 426).

Background: A Brief Legislative History of 111(d)

EPA’s  recently proposed climate rule for existing power plants is based on Clean Air Act §111(d). This provision authorizes the agency to prescribe “regulations” for “any air pollutant” from “any existing source.” These regulations, in turn, guide the States formulation of “standards of performance” to control pollution from the source in question.

In what turns out to be a common happenstance (more on that below), Clean Air Act §111(d)’s legislative history resulted in an inadvertent textual discrepancy between the United States Code and the Statutes at Large.

As originally enacted in 1970, §111(d) included an exclusion that prohibited EPA from prescribing §111(d) regulations for any hazardous air pollutant already regulated under §112 of the Clean Air Act. The idea behind this “§112 Exclusion” was to avoid duplicative regulation.

In 1990, Congress amended the Clean Air Act. If you’ll recall the ‘how a bill becomes a law’ jingle, the House and Senate each pass a version of the bill. Often, the texts of these bills are different. Any differences between the House and Senate versions are then reconciled in a Conference Committee.

The House of Representatives passed a bill that fundamentally changed the nature of the §112 exclusion. Before the 1990 Clean Air Act Amendments, the exclusion from 111(d) applied to hazardous air pollutants regulated under §112; under the House bill, this exclusion applied to §112 source categories (rather than §112 pollutants).

Unlike the House, the Senate bill left unchanged the pre-1990 §112 Exclusion. That is, the Senate version maintained a prohibition on EPA’s issuance of 111(d) regulations for §112 hazardous air pollutants. However, in order to harmonize the pre-1990 §112 Exclusion with the language of the 1990 Clean Air Act Amendments, the Senate passed a “conforming” amendment to 111(d). Thus, the Senate’s amendment was a ministerial change.

The Conference Committee adopted the House’s substantive amendment. Logically, the adoption of the House language rendered moot the Senate clerical language. However, the Conference Committee failed to remove the Senate’s conforming amendment. As a result, the Statutes at Large contain both the House’s substantive amendment and the Senate’s conforming amendment.

The United States Code, on the other hand, contains only the House version of the §112 Exclusion (which, again, applies to categories rather than pollutants). Notably, in omitting the Senate language, the codifier stated that the Senate’s conforming amendment “could not be executed.”

Taken at face value, the House language—as codified in the U.S. Code—would outlaw EPA’s climate change rules for existing power plants. This is due to the fact that the agency, in February, 2012, published a regulation (the ridiculous Utility MACT) that subjected power plants to §112 requirements. Therefore, pursuant to the House version of the 1990 Clean Air Amendments/U.S. Code, power plants are a “source category” excluded from §111(d) regulations.

Dueling Legal Theories: EPA v. State AGs (led by West Virginia AG Morrisey)

EPA, of course, has an interpretation of the Clean Air Act that differs from a plain reading of the U.S. Code. After all, the agency did propose major climate regulations based on its 111(d) authority; this regulation would be illegal at face value pursuant to a strict reading of the U.S. Code.

Recall from the first section of this post that the U.S. Code establishes “prima facie” the laws of the U.S., unless it conflicts with the Statutes at Large, which are the ultimate authority. In a legal memo issued concomitantly with the proposed rule, EPA argues that the Statutes at Large are inconsistent with the U.S. Code on §111(d), due to the presence of the Senate’s ministerial language in the former but not the latter. Due to this “inconsistency,” EPA claims that the Statutes at Large, rather than the U.S. Code, are the controlling text.

Turning to the [putatively controlling] Statutes at Large, the agency reads the House’s substantive amendment as conflicting with the Senate’s conforming amendment. Under EPA’s interpretation, this incompatibility creates a statutory ambiguity. Due to this statutory ambiguity, the agency claims it possess the discretion to render a reasonable interpretation. Not surprisingly, EPA’s interpretation ignores the House’s substantive amendment that would have prohibited the agency’s Clean Power Plan.

West Virginia Attorney General Patrick Morrisey’s office has been leading the charge against EPA’s interpretation of the “§112 Exclusion.” In a June 7 letter, AG Morrisey first presented his case; new evidence was added in a June 26th amicus brief, to which AGs from Ohio, Oklahoma, Kentucky, Alaska, South Carolina, Wyoming, and Nebraska were cosignatories. Both documents are reposted at the bottom of this blog.

In a nutshell (explained further below), the AGs argue that EPA is willfully mistaking the distinction between a “conforming” amendment and a “substantive” amendment. They present compelling evidence that the 111(d) “conforming” amendment in the Statutes at Large is, in fact, a “drafting error” that cannot be given any force. As a result, the AGs argue, there is no “inconsistency” between the States at Large and the U.S. Code, and the latter must control. And, again, pursuant to the U.S. Code, the agency has no authority to prescribe §111(d) regulations for power plants.

Here’s the whole story: If you’ll remember the legislative history of §111(d), the House version of the 1990 CAAA significantly altered the “§112 Exemption,” while the Senate version maintained the pre-1990 CAAA “§112 Exemption” –but updated the text with a “conforming amendment.” The Conference Committee failed to reconcile these provisions.  EPA wants to give effect to the Senate version, because this would allow the agency to regulate power plants under §111(d). Conversely, the agency wants to avoid giving effect to the House version, because this would prohibit the agency from regulating power plants under §111(d).

The AGs present a wealth of evidence to rebut EPA’s interpretation. For starters, they cite the Senate Legislative Drafting Manual, which states that “conforming amendments” are “amendments of a provision of law that [are] necessitated by the substantive amendments or provisions of the bill.” This is intuitive: Substantive amendments are antecedent to conforming amendments. But the “conforming amendment to Clean Air Act §111(d) in the Statutes at Large—upon which rests EPA’s authority to issue climate rules for existing power plants—doesn’t conform anything. Therefore, it has no purpose. It is, simply put, a mistake. Thus, the basis for EPA’s climate rules is a drafting error!

Crucially, the AGs brief offers scores of instances whereby this precise “drafting error” occurred. [See Footnote 6 of the AG amicus]. As it turns out, this scenario is quite common. The AGs cite recent case law (American Petroleum Institute v. SEC, 714 F. 3d 1329 (D.C. Cir. 2013)) in which the D.C. Circuit acknowledged the prevalence of “scrivener’s errors” in modern, complex legislation, and that such mistakes should be accorded no interpretative force.

Even If AG Morrisey’s Argument Doesn’t Prevail (unlikely), There’s Another Rock-Solid Reason EPA Doesn’t Have Authority to Promulgate Clean Power Plan

Recall that EPA’s argument is two-fold: (1) there exists an inconsistency between the U.S. Code and the Statutes at Large and (2) the Statutes at Large include contradictory language that creates an ambiguity. This ambiguity, in turn, is the basis for EPA’s authority to interpret the Clean Air Act such that no force is given to the “§112 Exclusion” in the U.S. Code.

In the previous section, I explained how a number of AGs, led by West Virginia AG Morrisey, are making a compelling case that there is no “inconsistency” between the Statutes and Large and the U.S. Code, and that, as such, the latter is controlling. Under the unambiguous terms of the U.S. Code, EPA does not have the authority to promulgate greenhouse gas regulations for existing power plants.

Of course, adjudicating administrative law is often politics by other means. Crazy things happen. But even if a court were to reject the AGs rock-solid case that the Statutes at Large are consistent with the U.S. Code, EPA’s second argument (that the Statutes at Large include contradictory language that creates an ambiguity) is also plainly wrong.

As explained by Brian Potts and William Haun, there is no conflict between the “substantive” amendment and the “conforming” amendment described above. Because they can be reconciled such that each is given meaning, there is no ambiguity. And because there is no ambiguity, EPA merits no deference to read away the §111(d) exclusion for source categories that are subject to §112.

Notably, Natural Resources Defense Council made the same case—i.e., that EPA is prohibited from subjecting power plants to §111(d) regulations—back in 2005, as I explain here. They are, of course, singing a different tune today.

WV 111d Amicus 6.26.2014

Wv Ag Letter Epa 6.7.2014

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