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Michigan vs. EPA: A significant first step to ending federal overreach?
Legal Corner
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he U.S. Supreme Court handed down several landmark In its study, the EPA estimated that decisions at the end of June 2015, covering a wide range the cost for power plants to implement of highly publicized issues such as same-sex marriage these standards would be $9.6 billion and the Affordable Healthcare Act. However, the one per year. While it could not “fully opinion issued June 29, 2015, that, for the most part, flew under the quantify” the benefits of the reduction radar of mainstream media coverage was Michigan v. Environmental of hazardous air pollutant emissions, Protection Agency. Of all the opinions that the Court handed down the EPA estimated the benefits to be in the final week of June, this decision that limits the ability of fed- worth $4 to $6 million per year. Yes, eral regulatory agencies to regulate entities without first considering you read that correctly — billion with the cost of compliance should perhaps be of the most interest to our a “B,” and million with an “M.” That LINDSEY BAILEY county governments. is a cost approximately 1,600 to 2,400 General Counsel To provide some background to this case, the Clean Air Act, first times greater than the quantifiable benpassed by the U.S. Congress in 1970 and amended in 1977 and 1990, efits of the regulations. In its study, but directs the Environmental Protection Agency (EPA) to regulate the notably not included in its “appropriate hazardous air emissions from stationary sources such as refineries and and necessary” finding, the EPA mentioned some ancillary benefits, factories. As a result of this act, the National Emissions Standards such as cutting emissions of particulate matter and sulfur dioxide for Hazardous Air Pollutants Program was implemented. Under this (pollutants not covered by the hazardous-air-pollutants program), inprogram, sources that emit more than 10 tons of a single pollutant creasing the EPA’s estimated benefits of the regulations to $37 to $90 or 25 tons of any pollutants billion per year. combined are called “major Twenty-three states (insources,” and the EPA is cluding Arkansas) and he Court is sending a clear message to all required to regulate them. various utility companies Alternatively, a source that joined as plaintiffs in chalfederal regulatory agencies that, at least does not meet that emislenging these regulations when its regulation must meet the threshold sions threshold is called an in Michigan v. EPA, which “area source,” and the prothe D.C. Circuit of Appeals of “appropriate and necessary,” the cost of implemengram requires the EPA to upheld. At the heart of this regulate an area source if it appeal was the EPA’s refusal tation and compliance with their standards borne by “presents a threat of adverse to consider cost when dethe entities being regulated must be considered before effects to human health or ciding whether to regulate the environment … warpower plants. In its final that regulation is permitted. ranting regulation.” appeal, the U.S. Supreme The Clean Air Act was Court overturned the lower amended in 1990 to also court’s decision, noting the subject fossil-fuel-fired power plants (“power plants” for short) to EPA “gave cost no thought at all, because it considered cost irrelevant various other regulatory requirements, with the expected result be- to its initial decision to regulate.” The Court went on to state that ing the reduction of power plants’ emission of hazardous air pollut- “agencies must operate within the bounds of reasonable interpretaants — but the extent of this expected reduction was unclear. Con- tion” when implementing laws, and that the “EPA strayed far beyond gress directed the EPA to perform a study of the anticipated hazards those bounds when it read [The Clean Air Act] to mean that it could to public health from the power plant emissions, and it and directed ignore cost when deciding whether to regulate power plants.” the EPA to regulate power plants under the Clean Air Act only if it Furthermore, the Court recognized that government agencies finds the regulations “appropriate and necessary” after considering have always considered cost in deciding whether certain regularesults of the study. tions were appropriate. It noted the “reality that ‘too much wasteful The EPA completed the study required in 1998, and in 2000 con- expenditure devoted to one problem may well mean considerably cluded that regulation of coal and oil power plants was “appropriate and fewer resources to deal effectively with other (perhaps more serious) necessary.” It reaffirmed this finding in 2012 and implemented what are problems.”’ The EPA presented a handful of reasons to the Court known as “floor standards,” or minimum emission regulations, for these why cost was irrelevant in its decision to regulate — all of which the plants to follow. First, the EPA found the regulation was “appropriate” Court found unpersuasive. because the plants’ emission of mercury and other hazardous pollutThe Court finished by stating, “[t]he Agency must consider cost ants posed risks to human health and the environment, and there were — including, most importantly, cost of compliance — before decontrols available to reduce these emissions. Second, it found regulation ciding whether regulation is appropriate and necessary.” This is the “necessary” because other programs implemented under the Clean Air sentence of the ruling that should catch the attention of, or even Act did not eliminate these risks. Additionally — and a key factor in the excite, our county government officials — even if power plants seem outcome of Michigan v. EPA — the EPA determined that “costs should not be considered” when deciding whether these power plants should See “EPA” on Page 61 > > > be regulated under this act.
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COUNTY LINES, SUMMER 2015
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