Environmental Protection Agency chief Scott Pruitt

 

The Environmental Protection Agency issued a proposed rule Tuesday to undue a signature climate rule from the Obama administration, though a key court battle over the policy still lingers in a federal appeals court in Washington, D.C.

An en banc panel of 10 judges at the U.S. Court of Appeals for the D.C. Circuit has held the case in abeyance since April after hearing oral arguments more than a year ago. The plan itself never went into effect because the U.S. Supreme Court stayed its implementation in February 2016, pending resolution of the legal challenges brought by 28 Republican state attorneys general and more than 100 companies and industry groups who claim the rule exceeded the agency’s authority.

A resolution never came, and the EPA is now taking the first steps to rescind the rule. When and if the EPA finalizes the rescission, the D.C. Circuit case, once considered one of the most consequential challenges to the Obama administration, might simply go away.

“Technically, [finalizing the rescission] should moot the challenges to the Clean Power Plan because, at that point, it wouldn’t exist anymore,” said Crowell & Moring partner Thomas Lorenzen, who argued on behalf of the National Rural Electric Cooperative Association and other involved industry groups.

The EPA did not immediately respond to a request for comment.

Even if the case ends without a resolution, environmental groups and state attorneys general, including Eric Schneiderman of New York and Maura Healey of Massachusetts, have threatened new legal action once the rescission is finalized. Those lawsuits would likely involve similar arguments raised in the existing case.

In announcing the proposal Monday, EPA chief Scott Pruitt echoed the opposition’s argument that the agency never had the authority to issue the Clean Power Plan.

“After the rule that rescinds the Clean Power Plan is finalized, it will be subject to judicial review in the D.C. Circuit, and that case may wind up teeing up at least one of the legal issues that was before the court back in the fall of 2016,” said Ethan Shenkman, a partner at Arnold & Porter Kaye Scholer who served for three years as deputy general counsel at the EPA until leaving earlier this year.

The Clean Power Plan, issued in 2015, imposed the first national limits on carbon pollution from power plants. In court, its opponents argued the EPA overstepped the scope of its authority under Section 111 of the Clean Air Act when it issued the rule. In March, the Trump administration asked the court to hold the case in abeyance while it reviewed the rule. The court agreed, and has continued to suspend the case in 60-day intervals, with the EPA filing periodical reports on how it’s progressing.

However, in the last abeyance order in August, Judges Patricia Millett and David Tatel wrote the stalled case combined with the Supreme Court’s “has the effect of relieving EPA of its obligation to comply with” its “statutory duty” to regulate greenhouse gases.

“The premise of holding the case in abeyance, not deciding it, is that the administration is actively rethinking [the rule],” said David Doniger, of the Natural Resources Defense Council, which intervened in the case on the side of environmental groups. “And some of the judges … indicated that they were concerned about how much time this is taking, because there’s a legal obligation to issue standards.”

Doniger and other environmental lawyers said one motivation for the EPA to issue the rescission proposal is to show the court it’s actively doing something, and therefore the case should continue to be stalled.

However, the EPA’s proposal only rescinds the existing rule, and offers no clear plan to replace it with a new regulation. That’s a serious concern for environmental groups and Democratic state attorneys general who fear the EPA is skirting its obligation to protect the public from pollution.

“That’s just a way to essentially do nothing,” said Joanne Spalding, chief climate counsel at the Sierra Club.

Lorenzen cautioned the agency still must go through a notice-and-comment period and issue a final rule before the Clean Power Plan is officially dead. In the meantime, the court could continue to hold the case in abeyance until the final rule is issued, make a decision on the merits of the case or remand it to the EPA.

In a filing Tuesday, the EPA said the court should continue to hold the case in abeyance throughout the rule-making process. Shenkman said that’s to be expected as part of the EPA’s strategy. 

“[EPA] can try to move fairly quickly to finalize the proposal to rescind the Clean Power Plan, and then there will no longer be a question of what happens in the meantime,” he said.

Shenkman and others said it’s unlikely the court will issue a decision on the merits at this point, as courts often refrain from issuing so-called advisory opinions.

The other option is to remand the case to the EPA. Both the EPA and industry groups urged the court in May briefings not to remand the case, because doing so would effectively end the case in the D.C. Circuit and could call into question the Supreme Court’s stay. 

On the other hand, environmental groups and state AGs said they preferred a remand to continuing to keep the case in abeyance, on the grounds that such an order would likely dissolve the stay. 

But ultimately, environmental groups are hoping the court still weighs in. Spalding said when the EPA files another update in court, her group and others will likely file their own briefs in response.

“We believed, and continue to believe, that the court should be deciding this case,” Spalding said. “As a legal matter, the Clean Power Plan is on the books. No court has decided the legal merits of it.”