Amicus Curiae Brief — Westmoreland Mining Holdings LLC, Petitioner v. Environmental Protection Agency, et al.

No. 20-1778

In The

___________

WESTMORELAND MINING HOLDINGS LLC,

Petitioner,

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

Respondents.

___________

On Petition for a Writ of Certiorari

to the United States Court of Appeals for the

District of Columbia Circuit

___________

BRIEF OF THE CATO INSTITUTE

AS AMICUS CURIAE

IN SUPPORT OF PETITIONER

___________

Ilya Shapiro

Counsel of Record

CATO INSTITUTE

1000 Mass. Ave., N.W.

Washington, D.C. 20001

(202) 842-0200

ishapiro@cato.org

July 22, 2021

i

QUESTIONS PRESENTED

Whether 42 U.S.C. § 7411(d) clearly authorizes the

EPA to decide such matters of vast economic and political significance as whether and how to restructure

the nation’s energy system?

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED ......................................... i

TABLE OF AUTHORITIES ..................................... iii

INTEREST OF AMICUS CURIAE ........................... 1

INTRODUCTION AND SUMMARY OF

ARGUMENT ......................................................... 1

ARGUMENT: BY DEPARTING FROM THIS

COURT’S RELEVANT GUIDANCE, THE

MAJORITY BELOW ENCOURAGES THE

EPA TO WASTE ITS LIMITED RESOURCES... 4

CONCLUSION ........................................................... 9

iii

TABLE OF AUTHORITIES

Page(s)

Cases

FDA v. Brown & Williamson Tobacco Corp.,

529 U.S. 120 (2000) ................................................ 4

Massachusetts v. EPA, 549 U.S. 497 (2007) .............. 5

Paul v. United States, 140 S. Ct. 342 (2019) ............. 4

Util. Air Regulatory Group v. EPA (UARG),

573 U.S. 302 (2014) ........................................ 4, 5, 7

West Virginia v. EPA, 136 S. Ct. 1000 (2016) ........... 2

Whitman v. Am. Trucking Ass’ns, Inc.,

531 U.S. 457 (2001) ................................................ 3

Statutes

42 U.S.C. § 7607(b)..................................................... 3

Regulations

80 Fed. Reg. 64,662 (Oct. 23, 2015) ................... 1, 2, 8

80 Fed. Reg. 64,966 (Oct. 23, 2015) ........................... 2

Exec. Order No. 14,008, 86 Fed. Reg. 7,619

(Feb. 1, 2021) .......................................................... 7

Other Authorities

American Clean Energy and Security Act,

H.R. 2454, 111th Cong. (2009) ............................... 1

Coral Davenport, “E.P.A. Staff Struggling to

Create Pollution Rule,” N.Y. Times,

Feb. 4, 2014 ............................................................. 8

iv

Courtney Scobie, “Supreme Court Stays EPA’s

Clean Power Plan,” ABA Practice Points,

Feb. 27, 2016 ........................................................... 2

Jennifer A. Dlouhy, “Biden Climate Czar Vows

Clean-Energy Edict If Congress Fails,”

Bloomberg Green, July 13, 2021 ............................ 7

Pet. for Writ of Cert., West Virginia, et al. v. EPA

(2021) (No. 20-1530) ............................................... 7

Resp. Mot. for Partial Stay of Issuance of the

Mandate, Am. Lung Ass’n v. EPA,

985 F.3d 914 (D.C. Cir. 2021) ................................ 8

U.S. Environmental Protection Agency, Fiscal

Year 2016 Justification of Appropriation

Estimates for the Committee on

Appropriations (2015) ............................................ 8

William Yeatman, Competitive Enter. Inst.,

The EPA’s Dereliction of Duty, How the EPA’s

Failure to Meet Its Clean Air Act Deadlines

Undermines Congressional Intent (2016) ............. 9

1

INTEREST OF AMICUS CURIAE 1

The Cato Institute is a nonpartisan public-policy

research foundation established in 1977 and dedicated to advancing the principles of individual liberty,

free markets, and limited government. Cato’s Robert

A. Levy Center for Constitutional Studies helps restore the principles of constitutional government that

are the foundation of liberty. Toward those ends, Cato

publishes books and studies, conducts conferences,

and produces the annual Cato Supreme Court Review.

This case interests Cato because the decision below threatens individual liberty by encouraging the

EPA to resolve major questions of economic and social

significance without a clear delegation from Congress.

INTRODUCTION AND

SUMMARY OF ARGUMENT

In 2009, the House of Representatives passed a

“cap-and-trade” policy to fight global warming. See

American Clean Energy and Security Act, H.R. 2454,

111th Cong. (2009). But the bill stalled in the Senate,

where it ultimately expired when the clock ran out on

the 111th Congress. “So President Obama ordered the

EPA to do what Congress wouldn’t,” App. 169a

(Walker, J., dissenting), and the agency promulgated

the Clean Power Plan, see 80 Fed. Reg. 64,662 (Oct.

23, 2015), which was designed to restructure the electricity grid, id. at 64,760–64,771 (setting out supposed

statutory basis for requiring “generation shifting” to

1 Rule 37 statement: All parties were timely notified and con-

sented to the filing of this brief. Further, no party’s counsel authored this brief in any part and amicus alone funded its preparation and submission.

2

climate-friendly energy sources). For compliance, the

EPA proposed to operate nationwide “model trading

rules,” also known as a cap-and-trade. See 80 Fed.

Reg. 64,966 (Oct. 23, 2015). The agency “expected”

states to participate. See 80 Fed. Reg. 64,662, 64,726

(“[I]t is entirely feasible for states to establish standards of performance that incorporate emissions trading, and it is reasonable to expect that states will do

so.”). The upshot is that the Clean Power Plan is the

same major policy—nationwide cap-and-trade to reorder energy production—that the 111th Congress had

declined to adopt after much deliberation.

On its face, this regulatory history should prompt

suspicion. Why would Congress spends time on major

climate policy if the EPA already had the authority to

enact it? Consistent with such skepticism, the Court

issued an unprecedented stay of the rule. See West

Virginia v. EPA, 136 S. Ct. 1000 (2016); see also

Courtney Scobie, “Supreme Court Stays EPA’s Clean

Power Plan,” ABA Practice Points, Feb. 27, 2016,

https://bit.ly/2V4JVzu (reporting “the first time the

Supreme Court has ever issued a stay on regulations

before an initial review by a federal appeals court”).

Still, in a split 2-1 decision, the court below found

“ample discretion” in the interstices of the Clean Air

Act to authorize the Clean Power Plan, and more.

App. 66a; see also, Pet. Br. 17–18 (describing how the

court below interpreted the EPA’s authority “to extend beyond that claimed in the [Clean Power Plan]”).

It’s worth elaborating on the attenuated textual

basis for the D.C. Circuit’s sweeping conclusions regarding the EPA’s regulatory authority. The majority

below described the operative statutory provision as a

3

“gap-filler” that “is intended to reach pollutants that

do not fit squarely within the ambit of the Act’s other

regulatory provisions.” App. 24a, 67a. Within this

“catchall” provision, the court located the agency’s

power in its authority to “fill the gap[s] the Congress

left.” App. at 63a. Putting it all together, the panel

read the statute to confer regulatory authority over

the entire electricity grid in the gaps of a gap-filler.

But see Whitman v. Am. Trucking Ass’ns, Inc., 531

U.S. 457, 468 (2001) (“Congress . . . does not, one

might say, hide elephants in mouseholes.”).

Only two courts—this one and the court below—

can pronounce on the EPA’s implied authority to regulate greenhouse gases from stationary sources under

the Clean Air Act. See 42 U.S.C. § 7607(b) (establishing the D.C. Circuit as the exclusive venue for judicial

review of nationwide air quality regulations). After

the divided decision below, however, the judiciary is

sending mutually exclusive instructions regarding

the EPA’s power to fill in the gaps left by Congress.

Where this Court calls for a cautious approach, the

split panel threw caution to the wind, urging the

agency to reorient the electricity grid through generation-shifting. As a result of the D.C. Circuit’s departure from this Court’s rulings, the EPA is set to

(again) waste its limited time and budget on a historic

scale. To prevent a massive misallocation of scarce

public resources, this Court should grant certiorari

4

and harmonize judicial guidance on the crucial interpretive question raised by the petitioner.

ARGUMENT: BY DEPARTING FROM THIS

COURT’S RELEVANT GUIDANCE, THE MAJORITY BELOW ENCOURAGES THE EPA TO

WASTE ITS LIMITED RESOURCES

Because Congress has yet to legislate a response

to climate change, the EPA must rely on its existing

delegation under the Clean Air Act. But that statute

was designed to control conventional pollution, so it

doesn’t speak directly to mitigating global warming.

Complicating matters further, conventional pollutants are emitted at levels that are orders of magnitude less than greenhouse gases, which makes for an

uneasy fit between the statute’s programs and climate policy. Here, the EPA’s authority is both interstitial and awkward.

In Util. Air Regulatory Group v. EPA (UARG), this

Court provided much-needed interpretive guidance

regarding the same regulatory context as the instant

case. See 573 U.S. 302 (2014) (addressing the agency’s

implied authority to regulate greenhouse gases from

stationary sources under the Clean Air Act). In that

case, the Court said that it “expect[s] Congress to

speak clearly if it wishes to assign to an agency decisions of vast economic and political significance.” Id.

at 324 (quoting FDA v. Brown & Williamson Tobacco

Corp., 529 U.S. 120, 160 (2000)); see also Paul v.

United States, 140 S. Ct. 342 (2019) (statement of Kavanaugh, J.) (“In order for an executive or independent agency to exercise regulatory authority over a ma-

5

jor policy question of great economic and political importance, Congress must . . . expressly and specifically

delegate to the agency the authority.” (cleaned up).

Even where the Clean Air Act is “clear” on how to proceed with controls for greenhouse gases, UARG still

“acknowledged the potential” for “an unreasonable

and unanticipated degree of regulation” and, accordingly, the Court emphasized that EPA lacks a “free

rein.” 573 U.S. at 332; see also Massachusetts v. EPA,

549 U.S. 497, 531 (2007) (observing that climate regulation under the Clean Air Act would not lead to “extreme measures”).

For this Court, therefore, the absence of textual

clarity is an interpretive red flag that warrants “a

measure of skepticism” whenever an agency claims to

“discover” significant authority based on a novel interpretation of a “long-extant statute.” UARG, 573

U.S. at 324. Yet the D.C. Circuit adopted the opposite

approach. Far from “skepticism” in the face of statutory ambiguity, the majority was “struck” by the “paucity of restrictive language” in the EPA’s gap-filling

authority. App. 68a. To the majority below, the

catchall’s lack of clarity is part of a calibrated design—it’s “muscle that Congress deliberately built

up” so as to “entrust the EPA with flexible powers to

craft effective solutions.” App. 78a; see also, App. 79a

(“We do not believe that Congress drafted such an enfeebled gap-filling authority in Section 7411.”).

By finding regulatory “muscle” in the gaps of a

gap-filler, the D.C. Circuit reached the bizarre conclusion that the Clean Power Plan “does nothing to enlarge the Agency’s regulatory domain.” App. 102a; see

also App. 94a (“[T]he EPA made no new discovery of

6

regulatory power with the Clean Power Plan.”). Instead of implicating the EPA’s authority, the majority

posited that any “regulatory consequences” of the

Clean Power Plan “are a product of the greenhouse

gas problem, not of [the EPA’s] role in the solution.”

App. 95a–96a. Accordingly, “any nationwide regulation of [power plants’] greenhouse gas pollution that

meaningfully addresses emissions will necessarily affect a broad swath of the Nation’s electricity customers.” App. 96s. On the basis of this tautology—climate

change is a major problem, so its regulation must be

major—the court below gave the EPA the very “free

rein” that this Court warned against.

In UARG, this Court established a presumption

against the EPA’s exercising an implied delegation to

achieve major climate policy. Below, the majority established the opposite presumption, going so far as to

suggest that major climate policy is required under

any reasonable interpretation of the enabling act’s

ambiguity. App. 53a (“[T]he record before the EPA

shows that generation shifting to prioritize use of the

cleanest sources of power is one of the most cost-effective means of reducing emissions.”). See also App. 66a

(warning that the EPA “may not shirk its responsibility by imagining new limitations that the plain language of the statute does not clearly require”). In sum,

federal courts are sending conflicting guidance on the

scope of the EPA’s authority to regulate greenhouse

gases pursuant to ambiguous or silent statutory text.

Faced with these mixed messages from the judiciary, the current administration plainly prefers the expansive interpretation advanced by the D.C. Circuit.

For example, President Biden established a goal for

7

“a carbon pollution-free electricity sector no later than

2035,” which would obviously require regulation to remake the grid. Exec. Order No. 14,008, 86 Fed. Reg.

7,619 (Feb. 1, 2021). To this end, White House National Climate Adviser Gina McCarthy recently

warned that if Congress doesn’t enact grid-wide production quotas for low-carbon power producers, then

the EPA will act on its own. See Jennifer A. Dlouhy,

“Biden Climate Czar Vows Clean-Energy Edict If

Congress Fails,” Bloomberg Green, July 13, 2021,

https://bloom.bg/3zgd9Kk. Again, such a far-reaching

policy design would be possible only under the D.C.

Circuit’s reading of the EPA’s interstitial authority.

So, the EPA is set to embark on another “multiyear voyage of discovery” of its implied delegation to

control greenhouse gases from stationary sources.

UARG, 573 U.S. at 328. The problem, as explained by

the petitioner, is that “[w]hatever action EPA eventually takes under [the D.C. Circuit’s] directive will necessarily be contingent on the decision below remaining good law despite the strong indications by this

Court that it is not.” Pet. Br. 25.

Petitioners in this and related cases have persuasively explained how this ongoing uncertainty weighs

on industry and states. Pet. Br. 20–26; Pet. for Writ

of Cert. at 19–25, West Virginia, et al. v. EPA (2021)

(No. 20-1530). Amicus joins their reasons in full and

also emphasizes the risk of administrative waste.

Regulating the electricity grid is resource intensive. Here, the Clean Power Plan is illustrative. The

rule took more than two years to complete, and contemporary reporting described “marathon meetings

8

and tense all-day drafting sessions, dozens of lawyers,

economists and engineers.” Coral Davenport, “E.P.A.

Staff Struggling to Create Pollution Rule,” N.Y.

Times, Feb. 4, 2014, https://nyti.ms/2ToXhWB. In the

rule’s preamble, the agency describes its “unprecedented and sustained process of engagement with the

public and stakeholders,” including the review of

more than 4.3 million comments. 80 Fed. Reg. 64,662,

64,665. To support these efforts, the agency made the

Clean Power Plan its “top priority” in the appropriations process. U.S. Environmental Protection Agency,

Fiscal Year 2016 Justification of Appropriation Estimates for the Committee on Appropriations (2015),

https://bit.ly/3eGvvfD. In explaining its budget request to Congress, the agency acknowledged that

rule’s development “require[d] the agency to tap into

technical and policy expertise not traditionally

needed in EPA regulatory development,” including

“electricity transmission, distribution, and storage.”

Id. at 312. That is, the agency had to develop an entirely new skill set because managing the electricity

grid is outside its core competency.

And it was all for naught. After being stayed by

this Court, the rule never took effect and has since

been permanently shelved. See Resp. Mot. for Partial

Stay of Issuance of the Mandate at 3–4, Am. Lung

Ass’n v. EPA, 985 F.3d 914 (D.C. Cir. 2021) (No. 191140) (informing court below that the EPA is considering the question of its authority under 42 U.S.C. §

7411(d) “afresh” in “a new rulemaking action”). The

Clean Power Plan surely ranks among the greatest

wastes of administrative resources in the history of

American government.

9

There are indirect costs to a futile “multiyear voyage of discovery,” beyond those incurred by the taxpayer. The EPA, like all agencies, has limited resources. The agency also has thousands of nondiscretionary duties with date-certain deadlines (unlike the

statutory provision here). See William Yeatman,

Competitive Enter. Inst., The EPA’s Dereliction of

Duty, How the EPA’s Failure to Meet Its Clean Air

Act Deadlines Undermines Congressional Intent

(2016), https://bit.ly/3eFdFtA (reviewing EPA’s “woeful” performance on more than 1,100 Clean Air Act

deadlines). When the agency makes regulating the

electricity grid a “top priority,” it necessarily renders

its other duties less of a priority. And if this “top priority” fails because it far exceeds the agency’s statutory authority, then the agency’s performance suffers,

and environmental quality accordingly diminishes.

CONCLUSION

For the above reasons, the Court should grant the

petition and clarify that the EPA’s interstitial authority to fight climate change is not without limits.

Respectfully submitted,

July 22, 2021

Ilya Shapiro

Counsel of Record

CATO INSTITUTE

1000 Mass. Ave., N.W.

Washington, D.C. 20001

(202) 842-0200

ishapiro@cato.org