DC Circuit Rules in Favor of EPA's Rejection of GHG Rulemaking

On July 15, a panel of the United States Court of Appeals for the District of Columbia Circuit, divided 2-1, ruled that the Environmental Protection Agency (EPA) properly exercised its discretion in rejecting a petition for a rule regulating greenhouse gases (GHG) under the mobile source provisions of Clean Air Act (CAA).

EPA’s Rejection of GHG Rulemaking

Twelve States and numerous environmental groups petitioned EPA under CAA §202(a)(1) for rules imposing mandatory controls to regulate emissions of carbon dioxide (CO2) and three other GHG emissions by new cars and trucks. EPA denied the rulemaking petition on alternative grounds: (1) the CAA does not authorize EPA to regulate CO2 and other GHGs for global climate change purposes; (2) that, even if the Act grants such authority, there are significant reasons of public policy not to regulate GHGs at this time. The States and environmental groups then petitioned the D.C. Circuit for review of EPA’s rejection of their rulemaking petition.

The D.C. Circuit’s Decision Upholding EPA

The Court’s opinion, written by Judge Randolph, held that EPA properly exercised its discretion in refusing to regulate GHG emissions from motor vehicles under the CAA. The split majority decision, however, leaves this matter far from settled. Judge Randolph issued his decision without ruling on the threshold issues of petitioners’ statutory standing to seek judicial review and EPA’s legal authority to regulate GHG emissions under existing CAA authorities. Judge Sentelle concurred with Judge Randolph only to permit the Court to issue a judgment, while Judge Tatel followed with a lengthy dissent.

Judge Randolph’s Opinion

Judge Randolph side-stepped the threshold question of whether the petitioning States and environmental groups have “standing” under Article III of the Constitution to seek judicial review. Article III requires that parties seeking relief in any federal court must show that they have standing by demonstrating that they have “suffer[ed] an injury in fact,” that the injury is “fairly traceable to the challenged action,” and that it is “likely to be redressed by a favorable decision” of the court. Judge Randolph determined that the petitioners have “submitted enough evidence” to make a prima evidence case for standing. He also determined, however, that this evidence conflicts with EPA’s factual conclusions supporting its policy decision not to regulate GHGs. Finding that the merits and standing overlapped, he went on to hold that EPA’s refusal to regulate was based on appropriate policy grounds. According to Judge Randolph, these policy judgments may go beyond the assessment of scientific evidence and are akin to “the sort of policy judgment that Congress makes when it decides to enact legislation regulating a particular area.” In affirming EPA’s decision not to regulate on this ground, Judge Randolph effectively concluded that the issues of petitioners’ standing and of EPA’s statutory authority to regulate GHGs did not have to be resolved.

Judge Sentelle’s Concurring Opinion

Judge Sentelle concluded that no petitioner had Article III standing, and therefore that all petitions had to be dismissed for lack of jurisdiction. He found no showing of harm to the petitioners that was “particularized to themselves;” rather, the claimed injuries are common to “humanity at large.” Because he found no standing, he did not discuss the merits of EPA’s decision. In order, however, to establish a majority sufficient for the Court to issue a judgment, Judge Sentelle concurred with Judge Randolph’s ruling upholding EPA’s exercise of its assumed statutory discretion. He explained that doing so would give “practical effect” to the outcome closest to his view that the petitions should be dismissed.

Judge Tatel’s Dissent

In a detailed 38-page dissent, Judge Tatel disagreed on both standing and the merits. First, he concludes that CAA §202(a)(1) plainly empowers EPA to regulate “any air pollutant” from mobile sources that can reasonably be anticipated to harm public health or welfare. This conclusion is supported by the “exceeding broad language” in §301(g)’s definition of “air pollutant.” Second, he finds that at least one petitioner, Massachusetts, has identified particularized harm sufficient to support standing by demonstrating that global warming to which mobile source GHG emissions contribute is threatening to erode its coasts, and that regulation of such emissions could partially reduce such harm. Third, he determines that EPA has no discretion within the scope of the CAA to refuse regulation on the policy grounds it gave for rejecting the rulemaking petitions. Those grounds are not related to the statutory standard in §202(a)(1) that triggers regulation of emissions from mobile sources (causing or contributing to air pollution that may reasonably be anticipated to endanger public health or welfare). Therefore, he concluded, the Court should require EPA either to make an endangerment finding or to come up with a reasoned basis for refusing to do so in light of the statutory standard.

Potential Implications

The majority’s failure to agree on the central issues of the case undermines the legitimacy of EPA’s claim that it lacks authority to regulate GHGs under the CAA. Furthermore, it casts doubt on the statutory validity of the policies that EPA invoked to support its alternative grounds for refusing to regulate. The Court’s 1-1-1 opinions make it highly likely that the State and environmental petitioners will seek rehearing en banc from the D.C. Circuit’s nine active judges on the basis of Judge Tatel’s dissent. A rehearing petition must be filed within 45 days of the D.C. Circuit’s judgment, i.e. on August 29, 2005. If rehearing en banc is refused, these parties are likely to seek Supreme Court review.

The split decision leaves regulation of CO2 and other GHG emissions where it was before. The issue of whether EPA has authority to regulate greenhouse gases, whether now or in the future, arguably remains open. In context of the growing debate about climate change policy in the United States, this lack of legal certainty adds to the pressures for the adoption of federal regulations for reducing GHG emissions in the United States. Most importantly, the inconclusiveness of D.C. Circuit’s decision provides an opening for a future Administration to reverse EPA’s current climate change policy that mandatory GHG limitations are neither authorized nor appropriate. Additionally, the decision does not provide secure shelter for current and potential defendants in tort litigation based on alleged harm from GHG emissions, or furnish clear guidance on whether plaintiffs in such litigation have standing.