What to Expect from the Supreme Court's Clean Air Mercury Decision

In the shadow of the upcoming Supreme Court decisions on Obamacare and same-sex marriage is an important environmental case that has important implications for the health of women of childbearing age in America.  The Court will decide whether to uphold the Environmental Protection Agency’s stringent limitations for emissions of the toxic metal mercury from the nation’s coal- and oil-fired power plants. And as with the Obamacare case, the case turns on a matter of language: the single word, “appropriate.” 

If the Court adheres to a long line of its own precedents on how courts are to interpret statutes that delegate decisionmaking power to regulatory agencies, the case should be an easy win for EPA.  If, however, some of the Justices cannot resist the temptation to impose their own policy preferences on EPA, the upcoming decision could be a very bad one for environmental regulation and, more importantly, for millions of expectant mothers in the future.

All coal contains small amounts of mercury, and that contaminant is not consumed when the coal is burned.  Consequently, all coal-burning power plants send small amounts of mercury up their smokestacks. Eventually, the mercury falls back to earth, and is converted by natural processes to methyl mercury, a chemical that is a potent neurotoxin in adults, children and fetuses. There is no known “safe” level of methylmercury in the bloodstream below which it no longer demonstrates these effects. 

Much of the methylmercury resulting from power plant emissions winds up in the nation’s lakes and streams, where it bioaccumulates in fish to higher and higher levels. (Small fish take in the mercury, before being eaten by bigger fish, which then take on the smaller fish’s load of mercury.) That’s why the Food and Drug Administration frequently issues warnings to women of child bearing age and children not to consume too much of certain species of fish, particularly those that are higher up the food chain.

In February 2012, EPA promulgated stringent regulations limiting for the first time emissions of mercury and several other hazardous air pollutants from coal- and oil-fired power plants.  When fully implemented, the rule will reduce mercury emissions from coal-burning power plants by about 90 percent.  The agency calculated that the rule will prevent around 11,000 premature deaths, 4,700 heart attacks, and 130,000 asthma attacks per year, mostly as a byproduct of reductions in fine particulate emissions that would result from the installation of technologies needed to reduce mercury emissions. Those are powerful health benefits, to be sure. They come at a cost to the companies burning the coal, however. At $9.6 billion per year in annual costs, the rule was the most expensive rule that EPA had ever promulgated under the Clean Air Act at the time.

As a prerequisite to promulgating the regulations, EPA had to make a special finding that regulation of hazardous air pollutant emissions from power plants was “appropriate and necessary.”  EPA made that finding at the end of the Clinton Administration, but it changed its mind during the George W. Bush Administration.  During the Obama Administration, EPA once again found that regulating mercury emissions from power plants was appropriate and necessary. 

In making its “appropriate and necessary” finding, EPA concluded that it did not have to consider the cost of attaining the standards or to balance the costs against the benefits of attaining the standards in making this threshold finding.  Costs would be considered later in deciding the level of the standard in some cases, but not in deciding whether to promulgate standards in the first place.  This critical conclusion is at the heart of the electric power industry’s challenge to Supreme Court challenge to the rule.

The essence of the case is the meaning of the word “appropriate.”  No one disputes that mercury emissions pose a hazard to human health or that regulation is therefore “necessary” to reduce their health risks.  But the industry points to the $9.6 billion cost and an estimate in EPA’s regulatory impact assessment (RIA) that the direct benefits of the rule will range from $4 to $6 million to claim that the standards are not “appropriate.”  (The RIA concluded that the overall benefits of the standards, including the “co-benefits” of reducing dangerous fine particulate matter, were in the range of $37 to $90 billion, but the industry claimed that the co-benefits were not relevant).

Ascertaining the meaning of the word “appropriate” is a classic exercise in statutory interpretation.  The Supreme Court’s seminal 1984 case of Chevron v. Natural Resources Defense Council, Inc., defined the role of the courts in interpreting the meaning of words in statutes that are being administered by regulatory agencies.  The Court prescribed a two-step inquiry under which the reviewing court should first determine whether Congress has directly and unambiguously spoken to the question at issue in the case.  If so, and the intent of Congress is clear, then both the court and the agency must give effect to the unambiguously expressed intent of Congress.

If, however, Congress has not spoken unambiguously, then the function of the reviewing court is to determine "whether the agency's answer is based upon a permissible construction of the statute."  If Congress explicitly delegated the power to determine the meaning of the relevant statutory terms, then the court may not overturn the agency’s determination unless it is “arbitrary and capricious.”  If Congress implicitly delegated the interpretational function to the agency by empowering it to speak with the authority of law on the issue, then the court may not overturn the agency’s interpretation if it is “reasonable.”

It does not appear from their briefs that the industry and state petitioners are taking the position that “appropriate” is unambiguous.  Indeed, few words are more ambiguous that “appropriate,” the meaning of which is context-dependent and requires a subjective exercise of judgment.  Consider, for example, the decision whether a particular dress is “appropriate.”  The decision would depend on the nature of the occasion and on highly subjective judgments involving culture, societal norms and individual taste.

Since Congress did not explicitly delegate to EPA the definition of “appropriate,” the single question before the court is whether it was “reasonable” for EPA to conclude that in determining whether regulating hazardous air pollutants from coal- and oil-fired power plants was appropriate, the agency need not consider costs.

The industry and state petitioners argue that EPA’s interpretation was unreasonable because “in considering whether it is appropriate to impose regulation, a reasonable person would consider both the pros and cons -- in other words, the benefits and costs -- of regulation.”  They invoke the New Oxford American Dictionary (2nd edition) definition of “appropriate” as something that is “suitable or proper under the circumstances.”

Whether regulation is suitable and proper, of course, depends on the nature of the regulation and the circumstances surrounding the decision.  The Supreme Court has already held in Whitman v. American Trucking Association that EPA may not consider the cost of regulation in promulgating national ambient air quality standards.  So it is clear that in some circumstances addressed by the Clean Air Act, it is appropriate for EPA not to consider costs when promulgating rules.

EPA takes the position that while costs are certainly a relevant consideration in determining the stringency of the regulatory requirements that the agency may impose on an industry, they are not relevant to the threshold determination of whether to subject the industry to the statute’s regulatory requirements in the first place.  Since the purpose of the Clean Air Act is to protect public health and the environment, the decision whether it is appropriate to regulate hazardous air pollutants from an industry should turn on whether emissions from sources in the industry are likely to endanger public health or the environment.  And the industry and state petitioners do not suggest that mercury emissions from power plants do not endanger public health.

How the Supreme Court resolves this dispute will depend to a large degree on the fidelity it pays to so-called Chevron deference.

Justice Scalia likes to resolve statutory interpretational disputes at the first step of the Chevron analysis by reference to dictionary definitions of statutory language.  But he will be hard-pressed to find a dictionary definition under which the meaning of “appropriate” is unambiguous.  Certainly the New Oxford American Dictionary definition quoted above does not clear up the ambiguity.  It simply substitutes two equally ambiguous terms “suitable” and “proper” and makes reference to the circumstances.

All of the parties appear to agree that the Justices will look to the “reasonableness” of the agency’s analysis under the second step of the Chevron analysis.  Like “appropriate,” the word “reasonable” is laden with ambiguity, and the “reasonableness” test is highly subjective. 

It might be difficult for some Justices to avoid allowing their decision to turn on their views as to whether regulating hazardous air pollutant emissions from power plants represents good public policy.  But proper respect for the role of the judiciary in administrative law requires that they resist that temptation and focus exclusively on the agency’s rationale for concluding that regulating hazardous power plant emissions is appropriate.

Given the large risks that mercury emissions from power plants pose to women, children and fetuses, it is hard to see how a Justice who has put his or her own policy preferences to the side could conclude that EPA’s “appropriateness” finding was unreasonable.

In the next few days, we shall learn whether the Chevron doctrine is a meaningful constraint on the exercise of judicial power or is merely a charade that cloaks judicial activism.