The Possible Mootness of Mitch McConnell’s Missive to States Regarding Non-Compliance with the Clean Power Plan

by William Yeatman on March 6, 2015

in Blog

For a couple months now, there’s been a battle brewing among critics of EPA’s Clean Power Plan. While we all agree the rule is illegal and illegitimate, there’s much disagreement on strategy.

On the one side are arrayed various politicians and non-profits, who argue that the rule is such an unacceptable affront to cooperative federalism, that States should simply refuse to play ball. That is, they recommend that States should refuse to submit compliance plans, and instead place the onus on EPA to impose a federal plan. This side’s take is purely principle.

On the other side are arrayed state regulators and the business community, and their concerns are more practical. By and large, they agree that the Clean Power Plan is an unacceptable affront to cooperative federalism. However, they also believe that a “just say no” strategy is too risky to pursue, albeit for different reasons:

  • For industry, it’s essentially a fiduciary responsibility to oppose the do-nothing camp. That’s for two reasons: First, businesses generally hold more sway with local officials, so they’d have less input under a federal plan. Second, and more importantly, utilities are ultimately on the hook for compliance. They’re the ones who would face daily fines that can measure well into the scores of thousands of dollars. So they’re not as keen on the whole non-compliance idea.
  • For state regulators, it’s somewhat similar. Ultimately, they’re on the hook for implementing the regulation. If a State refuses to comply altogether, then it arguably makes the regulators’ job more difficult.

The “just say no” camp won a major victory this week when Senate Majority Leader Mitch McConnell endorsed their position in an oped. Subsequently, it was reported that McConnell’s oped was seconded by several influential Members of Congress, including Senate EPW chairman James Inhofe and Energy & Power subcommittee chairman Ed Whitfield. This set off a flurry of media reports, about how congressional republicans were urging States to defy EPA’s climate regulations.

All of this brings me to the point of this post–the distinct possibility that none of this matters much. And that’s because the likelihood that the regulation will be stayed by the D.C. Circuit Court of Appeals is better than not, I believe. And if the rule is stayed, then there will be a great deal more wiggle room for States to act or demur. Below, I briefly explain why I believe why the odds for a stay are strong.

The Court considers four factors to determine whether a stay pending review is warranted:

  1. The likelihood that the moving party will prevail on the merits
  2. The prospect of irreparable injury to the moving party if relief is withheld
  3. The possibility of substantial harm to other parties if relief is granted
  4. The public interest.

Without getting into too much detail, there’s a very cogent case to be made that the Clean Power Plan merits such a stay. Below, I briefly make that case by addressing the four criteria.

  1. The likelihood that the moving party will prevail on the merits
    As proposed, the rule suffers from a number of glaring legal defects.
  2. The prospect of irreparable injury to the moving party if relief is withheld
    Due to the fact that utilities are capital intensive, they must plan years in advance. As such, utilities and state officials cannot wait for judicial review (a 3 year process, assuming this goes all the way to SCOTUS) to run its course, before they must start complying with the Clean Power Plan’s unprecedented mandate.
  3. The possibility of substantial harm to other parties if relief is granted
    The rule would in no way impact global warming, as conceded by EPA Administrator Gina McCarthy. So there’s no actual harm in staying the rule’s implementation.
  4. The public interest.
    See responses 1-3

Of course, the legal threshold for achieving a stay pending review of a final agency action is high. There’s no sure thing. Notwithstanding, the case for a stay is strong.

More importantly, I suspect the D.C. Circuit Court of Appeals, the venue in which the rule will be challenged, will be receptive to arguments in favor of delaying the rule’s implementation while it’s reviewed by the court.

For starters, the court already has stayed a major EPA rule with national implications, the Cross State Air Pollution Rule. So this is not terra icognita. It bears noting that the CSAPR was far less consequential and legally dubious than the Clean Power Plan.

More importantly, the court of late has refused to dismiss a novel lawsuit that challenges the Clean Power Plan, even though the regulation is only in the proposal stage of rulemaking. There is little legal precedent for overturning a proposed rule; nonetheless, the court rejected EPA’s motion to dismiss, and is entertaining briefs and oral arguments on the merits. (I explain the suit here and here). IMHO, the court’s willingness to hear out a challenge to the Clean Power Plan, despite the fact that the rule is not yet final, indicates that it is wary of the regulation, as well the court should be.

Of course, any given judicial review would be conducted by a three judge panel selected at random. It’s wholly possible that the preponderance of the court is of a totally different mind than the three judges who are now considering whether to strike down the Clean Power Plan. Only time will tell.

For more on EPA’s authority to impose a Clean Power Plan federal plan, see this three part series:

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