Reply Brief — The North American Coal Corporation, Petitioner v. Environmental Protection Agency, et al.

No. 20-1531

IN THE

Supreme Court of the United States

THE NORTH AMERICAN COAL CORPORATION,

Petitioner,

v.

U.S. ENVIRONMENTAL PROTECTION AGENCY AND

MICHAEL REGAN, ADMINISTRATOR OF THE U.S.

ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

On Petition for a Writ of Certiorari

to the U.S. Court of Appeals

for the D.C. Circuit

REPLY TO BRIEFS IN OPPOSITION

CHARLES T. WEHLAND

JONES DAY

77 W Wacker Dr.

Chicago, IL 60601

JEFFERY D. UBERSAX

KUSHNER & HAMED CO.

1375 E. Ninth St., Ste. 1930

Cleveland, OH 44114

YAAKOV M. ROTH

Counsel of Record

STEPHEN J. PETRANY

JONES DAY

51 Louisiana Ave., NW

Washington, D.C. 20001

(202) 879-3939

yroth@jonesday.com

Counsel for Petitioner

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ....................................... ii

INTRODUCTION ....................................................... 1

ARGUMENT ............................................................... 3

I.

REVIEW IS PLAINLY PROPER NOW........................ 3

II.

REVIEW IS MANIFESTLY IMPORTANT NOW ........... 6

CONCLUSION ......................................................... 11

ii

TABLE OF AUTHORITIES

Page(s)

CASES

Ala. Ass’n of Realtors v. Dep’t of

Health & Human Servs.,

141 S. Ct. 2320 (2021) .......................................... 10

Cherry Hill Vineyards, LLC v. Lilly,

553 F.3d 423 (6th Cir. 2008) .................................. 4

Dep’t of Homeland Sec. v. New York,

141 S. Ct. 1370 (2021) ............................................ 4

Dep’t of Homeland Sec. v. Regents

of Univ. of Cal.,

140 S. Ct. 1891 (2020) ........................................ 2, 4

FCC v. Fox Television Stations, Inc.,

556 U.S. 502 (2009) ................................................ 5

FCC v. Prometheus Radio Project,

141 S. Ct. 1150 (2021) ............................................ 4

McDonnell v. United States,

136 S. Ct. 2355 (2016) ............................................ 7

United States v. Munsingwear, Inc.,

340 U.S. 36 (1950) .................................................. 5

United States v. Stevens,

559 U.S. 460 (2010) ................................................ 7

Util. Air Regul. Grp. v. EPA,

573 U.S. 302 (2014) ........................................ 10, 11

STATUTES

42 U.S.C. § 7411 ................................................ 7, 9, 10

iii

TABLE OF AUTHORITIES

(continued)

Page(s)

OTHER AUTHORITIES

Maxine Joselow & Niina H. Farah, Will the

Supreme Court Take on EPA’s Climate

Rule?, E&E News (Aug. 10, 2021) ......................... 8

S. Ct. R. 10 ................................................................... 6

The White House, FACT SHEET:

President Biden Announces Steps to

Drive American Leadership Forward on

Clean Cars and Trucks (Aug. 5, 2021) .................. 8

INTRODUCTION

Across four briefs and over 25,000 words, the federal

government, along with 23 states, eight cities, 13

health and environmental advocacy groups, three

trade associations, and six power companies urge that

the important statutory question presented here not

be reviewed. Respondents protest too much.

For nearly a decade, battles over the EPA’s power to

limit greenhouse-gas emissions from existing sources

have been fought over a single, discrete legal question:

Must the agency set emission targets based on controls

that are achievable at the source level, or may it adopt

a system-wide approach that contemplates shuttering

plants altogether or forcing them to subsidize other

energy sources? After the EPA adopted the latter view

in its revolutionary Clean Power Plan (“CPP”), this

Court stepped in to stay it. The agency then reversed

course and repealed the CPP in its Affordable Clean

Energy (“ACE”) rule. But the D.C. Circuit—without

even citing this Court’s stay order—has now held the

EPA was right the first time, vacating the ACE rule.

In doing so, the panel bestowed on the agency carte

blanche authority to transform the Nation’s energy

grid (and much more) unilaterally.

Unable to downplay the importance of the discrete

legal question presented, Respondents instead accuse

Petitioner of asking this Court to address the next EPA

rulemaking in an “advisory opinion.” Not at all.

Petitioner asks this Court to review the vacatur of the

ACE rule, which presents a live controversy and

harms Petitioner. That the panel’s construction of the

statute unleashes the EPA to reshape nearly every

2

facet of the U.S. economy absent congressional

authorization is why review is important.

Notwithstanding Respondents’ rhetoric, there is no

justiciability issue here. Petitioner seeks review of a

panel decision vacating the ACE rule (and reviving the

CPP) based on a rejection of the EPA’s construction of

the Clean Air Act. Regardless of how the EPA might

respond to the decision if it stands, it is plainly subject

to review now. Just last year the Court granted review

in an identical posture when the Ninth Circuit vacated

agency action by rejecting the agency’s view about its

statutory power. Dep’t of Homeland Sec. v. Regents of

Univ. of Cal., 140 S. Ct. 1891 (2020). The Court did

not think certiorari was “premature” even though

DHS’s next steps were equally “speculative.”

Review is not only proper now as a legal matter, it

is also warranted as a prudential matter. Prospective

importance is always a critical factor at the certiorari

stage, which is why Petitioner set forth the real-world

implications of the D.C. Circuit’s interpretation (none

of which Respondents meaningfully dispute). That

does not mean Petitioner seeks an advisory opinion

about a hypothetical future rule; it simply underscores

why correcting the D.C. Circuit’s erroneous vacatur of

the current rule is critical. And Respondents offer no

good reason for yet another deferral.

To be sure, the Court could allow the EPA to spin its

wheels laboring under the panel’s mistaken precedent,

with the industry stuck in costly regulatory limbo,

before confronting the issue again in an emergency

request to stay whatever turbocharged CPP the EPA

develops next. But every prudential factor counsels in

favor of resolving this omnipresent legal issue now, in

3

the ordinary course, given that the only relevant Court

of Appeals has now issued a precedential decision that

cleanly tees it up for review.

ARGUMENT

I.

REVIEW IS PLAINLY PROPER NOW.

Respondents’ four opposition briefs share a common

theme: All accuse Petitioner of jumping the gun by

supposedly asking the Court to decide an “imaginary”

or “hypothetical” case regarding regulations the “EPA

might adopt in the future.” States Opp. 10; Power Cos.

Opp. 3; NGO Opp. 6. They go so far as to suggest that

review now would result in “an advisory opinion.” SG

Opp. 16; States Opp. 10; Power Cos. Opp. 1; NGO Opp.

6. The State Respondents even insinuate there might

be no “case or controversy” because the D.C. Circuit’s

partial stay of its mandate means there is “no present

regulatory burden.” States Opp. 14.

These gestures toward justiciability are misleading

and wrong. This case is not about the next EPA rule,

it is about the current one: the ACE rule. Respondents

assume there will be a new rulemaking only because

the D.C. Circuit vacated the ACE rule. That assumes

the conclusion. If this Court were to reverse, the ACE

rule would remain in force.

To remind the reader of the state of play: The EPA

promulgated the CPP by claiming the extraordinary

power to regulate based on an industry-wide “system”

of “generation shifting” from coal- and gas-fired power

to “cleaner” energy sources. After this Court stayed

the rule, the EPA reconsidered and promulgated the

ACE rule, which repealed the CPP as beyond the scope

of its authority. Now, in the decision below, the D.C.

Circuit turned back the clock, vacating the ACE rule

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(and so presumptively reviving the CPP) on the back

of its holding that the EPA does, in fact, possess the

extraordinary authority it initially asserted.

Thus, if not for the D.C. Circuit’s decision, the ACE

rule would still be in effect. If the rule is now “defunct”

(States Opp. 20; NGO Opp. 6), that is only because the

D.C. Circuit vacated it—but the point of this petition

is to secure reversal of that decision. Put simply, this

case controls whether the ACE rule survives or falls,

and judging from the number of voices urging for and

against review, that controversy is not just live but

kicking and screaming. Reviewing the vacatur of

agency action is routine, especially when the decision

limits or expands agency power, even if the agency

remains free on remand to adhere to the same result

or chart a new course. E.g., Regents, 140 S. Ct. 1891;

FCC v. Prometheus Radio Project, 141 S. Ct. 1150

(2021); Dep’t of Homeland Sec. v. New York, 141 S. Ct.

1370 (2021). And the government’s decision to decline

to seek review makes no jurisdictional difference. E.g.,

Cherry Hill Vineyards, LLC v. Lilly, 553 F.3d 423,

428–29 (6th Cir. 2008).

Importantly, while the EPA does not affirmatively

seek review of the decision below, it does not defend it

either, and has never walked back its interpretation of

the Clean Air Act reflected in the ACE rule. Nor has

the agency suggested that it plans to revisit the repeal

of the CPP other than in response to the decision

below. SG Opp. 13. Plus, even if the new EPA wanted

to revisit the ACE rule of its own accord, the standard

for doing so would be very different if this Court first

reinstated it. “An agency may not … disregard rules

that are still on the books,” and must justify a change

in policy when, as here, a “prior policy has engendered

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serious reliance interests.” FCC v. Fox Television

Stations, Inc., 556 U.S. 502, 515 (2009). Reversal of

the D.C. Circuit would also narrow significantly the

parameters of the agency’s discretion.

It is true that the EPA secured a partial stay of the

mandate so the now-outdated CPP will not spring back

into law. But a stay is irrelevant to whether the lower

court’s judgment injures Petitioner. And at minimum,

the decision strikes the ACE rule, which relative to the

CPP is favorable to coal interests. It also gives the new

EPA a blank slate with unbounded authority, instead

of forcing it to justify any further change, account for

reliance, and remain within the parameters of the

congressional authorization. The decision, and the

uncertainty it causes, thus seriously and adversely

affects the coal industry, which is why Petitioner is

seeking review. It is also why the Power Company

Respondents, who would benefit from EPA-mandated

generation-shifting away from coal, oppose review:

They want to be rid of the ACE rule, which is less

favorable to them, and free up the agency to once again

use regulation to coerce their competitors to subsidize

their operations.

At bottom, Respondents’ entreaties to let the EPA

conduct a “fresh” rulemaking (NGO Opp. i; SG Opp.

20; States Opp. 9; Power Cos. Opp. 5) are a convenient

excuse to freeze the D.C. Circuit’s favorable precedent

and status quo. It has nothing remotely to do with

justiciability. Reversal of the decision below, and

revival of the ACE rule, would be a meaningful victory

for Petitioner legally and practically, regardless of the

agency’s next steps. Tellingly, no Respondent actually

claims this case is moot; if it were, the appropriate

course would be to vacate the decision below. United

6

States v. Munsingwear, Inc., 340 U.S. 36 (1950).

Respondents want to avoid that outcome because they

know how important the decision truly is, and that

belies their “nothing to see here” routine.

II. REVIEW IS MANIFESTLY IMPORTANT NOW.

Of course, whether the Court should grant review is

distinct from justiciability, and turns on (among other

things) the importance of the issue. See S. Ct. R. 10(c).

Petitioner explained why this statutory question holds

immense practical significance for the power industry

and beyond—as this Court has already recognized by

staying the CPP. See Pet. 15–22. That nearly half the

States, numerous large cities, industry actors, and

environmental activists are so intent on avoiding this

Court’s intervention is powerful corroboration.

A. As Petitioner explained, the D.C. Circuit’s ruling

would empower the EPA to mandate emission limits

(for any existing source of greenhouse gases) drawn

from any national “system” the agency determines

would be “best” for fighting climate change. See Pet.

18–20.

On that understanding, this ancillary

provision of the Act is no longer limited to ensuring

that sources use the best available technology to

control their own emissions. It instead is a sweeping

delegation to the EPA to “fix” global warming through

whatever means it deems “best”—cap-and-trade

regimes, solar panels on the roof of every house,

canceling coal, or anything else—without any need for

congressional approval.

Respondents try to run from the panel opinion, but

fail to identify any limiting principles. They parrot the

same “limit” as the D.C. Circuit: the requirement that

the EPA also consider cost, health and environmental

7

impacts, and energy requirements. But as Petitioner

explained and no Respondent denies, nothing in the

statute meaningfully constrains the EPA’s discretion

in applying these incommensurate, discordant, and

competing factors. See Pet. 19.

Respondents also argue that the D.C. Circuit did not

“decide” the statutory question, but merely held that

the EPA’s original, broad view of its authority was a

“permissible” reading of § 7411(d). E.g., SG Opp. 19–

20; States Opp. 12–13; Power Cos. Opp. 12–13. That

is a meaningless distinction. Either way, the EPA now

has the unfettered authority Petitioner identified.

Indeed, Respondents do not actually deny that the

EPA could impose all of the extreme measures that

Petitioner hypothesized, from cap-and-trade regimes

to demands that regulated industries plant trees to

forced subsidization by high-emitting suburban homes

of “efficient” downtown apartments. The EPA feebly

responds that it has not yet chosen to regulate

residential homes under § 7411, but does not dispute

that it could. SG Opp. 21.

More generally, the EPA intones that whether it

will use its newly conferred authority to reshape the

entire national economy is “speculative.” SG Opp. 19.

This Court does not, however, accept an overbroad

interpretation of a statute “merely because the

Government promised to use it responsibly.” United

States v. Stevens, 559 U.S. 460, 480 (2010); see also

McDonnell v. United States, 136 S. Ct. 2355, 2372–73

(2016). And here the EPA has not even made such a

promise; it has only stayed studiously silent while this

Court considers the certiorari petitions. Meanwhile,

every sign confirms that the new Administration has

8

made addressing climate change a top priority, is

willing to impose transformational changes on society

to do so, and has already decided to take such action.

See, e.g., The White House, FACT SHEET: President

Biden Announces Steps to Drive American Leadership

Forward on Clean Cars and Trucks (Aug. 5, 2021)

(“[T]he President will sign an Executive Order that

sets an ambitious new target to make half of all new

vehicles sold in 2030 zero-emissions vehicles.”). As one

recent report observed, the consolidated petitions here

“come as the Biden administration looks to craft a

more aggressive rule to curb climate pollution from the

power sector.” Maxine Joselow & Niina H. Farah, Will

the Supreme Court Take on EPA’s Climate Rule?, E&E

News (Aug. 10, 2021).1

The panel below handed extraordinary power to the

EPA, and it defies belief that the agency will not use

it. That makes this case exceptionally important.

B. Respondents do not truly dispute that the legal

issue here, and the larger issue of the EPA’s regulatory

power over existing greenhouse-gas emission sources,

are important. Instead, they urge the Court to defer

review, downplaying the immense cost, inefficiency,

1 In an attempt to minimize the EPA’s ambitions, Respondents

assert that the CPP ended up being less draconian than expected

because power plants met its targets ahead of schedule without

the need for regulation. See NGO Opp. 6; States Opp. 15. But

that is beside the point now. While the scope of the CPP helps

illustrate the breadth of the authority that the EPA holds under

the D.C. Circuit’s decision, whether the EPA actually needed that

authority in that one specific, outdated instance does nothing to

detract from the point. And the success of the industry in

achieving the CPP’s targets will undoubtedly extend the

regulatory goalposts, making the EPA’s next iteration of its

climate rule all the more aggressive.

9

and extended uncertainty that follow.

That is

misguided. This Court should not miss this chance to

confirm the message sent by its CPP stay order,

correct the D.C. Circuit’s refusal to heed that message,

and affirm the EPA’s determination about the crucial

statutory limits on its authority under § 7411(d).

If the question is review now or review later, every

prudential consideration favors the former. The Court

now has a perfect vehicle to resolve this discrete legal

issue through its ordinary merits docket. And doing

so will finally provide regulatory certainty. Even if the

new EPA then determines to reevaluate the ACE rule

on its own accord, this Court’s reversal would ensure

that any further rules remain within the bounds

Congress set. In an industry that plans over decadeslong horizons, that certainty is critical. Pet. 22–23.

By contrast, deferring review until after the EPA

conducts a third rulemaking on this topic, now based

on the D.C. Circuit’s flawed ruling, would (i) waste the

time and money of every participant in the regulatory

process; (ii) leave the industry in an untenable state of

uncertainty for years into the future; (iii) repeat the

cycle of litigation that has been ongoing since the CPP

in 2015; and (iv) guarantee that the Court is next faced

with this issue in the far-from-ideal context of another

emergency stay application. And if this Court were to

reverse that future rule on this same legal ground, it

would be too late to revive the ACE rule.

Respondents provide no justification for delay. The

States suggest waiting would allow for compilation of

an “administrative record.” States Opp. 11–12. But

there already is an administrative record—two, in

fact—and nothing to be gained from a third, when the

10

only dispute concerns a “relatively discrete” and

purely legal question (Pet.App.50a). For its part, the

EPA asks for a chance to “take into account” this

Court’s stay order alongside the D.C. Circuit decision.

SG Opp. 18. But those two orders directly conflict,

making that request incoherent and confirming that

only this Court can provide a meaningful resolution.

In short, early definitive resolution would be better

for the EPA, better for the courts, better for industry—

and better for Congress, too, by clarifying the present

allocation of authority so the legislative branch can

make any adjustments it deems appropriate.

C. There is one other reason why review at this time

would be best. Beyond resolving the dispute over the

EPA’s § 7411(d) authority, this case would allow the

Court to explicate the major-questions doctrine. That

doctrine has assumed increased importance in an era

of quasi-permanent legislative gridlock, as agencies of

every stripe resort to discovering sweeping powers in

vague statutory provisions. E.g., Ala. Ass’n of Realtors

v. Dep’t of Health & Human Servs., 141 S. Ct. 2320

(2021). In this environment, elucidating the doctrine,

and rejecting Respondents’ artificial limits on its

scope, would be timely and worthwhile.

Specifically, Respondents claim the doctrine does

not apply because the D.C. Circuit did not mandate a

broad reading of the statute; it merely held it

permissible. E.g., States Opp. 23; Power Cos. Opp. 15.

So what? The court held that the EPA can decide, if it

so chooses, to use an “unheralded power to regulate ‘a

significant portion of the American economy.’” Util.

Air Regul. Grp. v. EPA, 573 U.S. 302, 324 (2014). The

whole point of the major-questions doctrine is that the

11

Court does not lightly assume that Congress delegated

policy discretion of such enormous import.

Respondents also argue that because the EPA is

acknowledged to have some authority to regulate in

this area, its extent cannot be a major question. E.g.,

NGO Opp. 9; States Opp. 23–24. Nothing supports

that distinction, which is subject to semantic

manipulation just by defining the regulated “area” or

“activity” at a high enough level of generality.

Whether an agency has authority only to regulate

within parameters set by Congress—or instead has

unlimited power to do nearly anything—is a

paradigmatic major question.

Respondents cannot and do not actually deny the

far-reaching significance of the statutory question at

issue. The decision below would effect an “enormous

and transformative expansion in EPA’s regulatory

authority without clear congressional authorization.”

Util. Air, 573 U.S. at 324. Rejecting that construction

by invoking the major-questions canon would be an

important development in its own right, and the Court

should grant review now for that reason too.

CONCLUSION

This Court should grant the petition.

12

AUGUST 2021

Respectfully submitted,

CHARLES T. WEHLAND

JONES DAY

77 W Wacker Dr.

Chicago, IL 60601

YAAKOV M. ROTH

Counsel of Record

STEPHEN J. PETRANY

JONES DAY

51 Louisiana Ave., NW

Washington, D.C.

(202) 879-3939

yroth@jonesday.com

JEFFERY D. UBERSAX

KUSHNER & HAMED CO.

1375 E. Ninth St., Ste. 1930

Cleveland, OH 44114

Counsel for Petitioner