Amicus Curiae Brief — North Dakota, Petitioner v. Environmental Protection Agency, et al.

No. 20-1780

In the

Supreme Court of the United States

NORTH DAKOTA,

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

MOTION FOR LEAVE TO FILE BRIEF OF

AMICUS CURIAE LIGNITE ENERGY COUNCIL

IN SUPPORT OF PETITIONER

Michael J. Nasi

JACKSON WALKER L.L.P.

100 Congress Avenue,

Suite 1100

Austin, Texas 78701

mnasi@jw.com

(512) 236-2216

ii

Lignite Energy Council (“LEC”) moves the Court

for leave to file an amicus brief in support of petitioner

the State of North Dakota. Pursuant to Supreme

Court Rule 37.2, counsel for LEC notified all 82

parties in this docket and requested their consent to

file. Of those, 64 consented; 18 have not responded.

None have withheld consent. Despite diligent efforts,

counsel for LEC has been unable to contact the

nonresponsive parties.

As noted on the Court’s docket, North Dakota has

granted blanket consent for all amicus filings.

Counsel for LEC additionally notes that the EPA has

consented to the filing of another amicus brief

submitted in this case by the South Texas Electric

Cooperative, et al.

LEC’s amicus brief will be helpful to the Court in

its resolution of the petition. LEC provides a

perspective not presented by North Dakota’s petition

or other amici. In particular, LEC will explain that the

D.C. Circuit’s decision threatens North Dakota state

policies specifically designed to encourage the efficient

and affordable generation of power from lignite. LEC

explains

that

the

D.C.

Circuit’s

decision

impermissibly grants the EPA authority to interfere

with those policy decisions in a manner that is directly

inconstant with the Clean Air Act.

LEC respectfully requests that the Court grant its

motion for leave to file the attached amicus brief in

support of petitioner.

iii

Respectfully submitted,

Michael J. Nasi

JACKSON WALKER L.L.P.

100 Congress Avenue

Suite 1100

Austin, Texas 78701

mnasi@jw.com

(512) 236-2216

Counsel for Amicus Curiae

Lignite Energy Council

No. 20-1780

In the

Supreme Court of the United States

NORTH DAKOTA,

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 AMICUS CURIAE LIGNITE ENERGY COUNCIL

IN SUPPORT OF PETITIONER

Michael J. Nasi

JACKSON WALKER L.L.P.

100 Congress Avenue,

Suite 1100

Austin, Texas 78701

mnasi@jw.com

(512) 236-2216

ii

TABLE OF CONTENTS

Table of Authorities............................................. iii

Statement of Interest ........................................... 1

Summary of Argument......................................... 2

Argument .............................................................. 3

I.

The Court Should Grant the Petition. .... 3

II. The Court Should Reverse the D.C.

Circuit’s Decision. .................................. 5

A.

This Situation Was Tailor-Made for

Application of the Major Questions

Doctrine ........................................... 6

B.

The D.C. Circuit’s Decision Would

Allow EPA to Once Again Make

Pawns Out of Its Cooperative

Federalism Partners. ...................... 8

Conclusion .......................................................... 10

iii

TABLE OF AUTHORITIES

Cases

Page

F.D.A. v. Brown & Williamson Tobacco Corp.,

529 U.S. 120 (2000) ................................................ 8

New York v. United States,

505 U.S. 144 (1992) .............................................. 10

Util. Air Regul. Grp. v. E.P.A.,

573 U.S. 302 (2014) ............................................ 7, 8

Statutes, Regulations, and Rules

42 U.S.C. § 7411(d) ............................................ passim

N.D. CENT. CODE § 54-17.5-01 .................................... 3

N.D. CENT. CODE § 57-06-17.1 .................................... 3

N.D. CENT. CODE § 57-39.2-04.11 ............................... 3

Sup. Ct. Rule 37.2........................................................ 1

Sup. Ct. Rule 37.6........................................................ 1

STATEMENT OF INTEREST1

The Lignite Energy Council (LEC) is a regional,

non-profit organization whose primary mission is to

promote the continued development and use of lignite

coal as an energy resource. The LEC’s membership

includes: (1) producers of lignite coal who have an

ownership interest in and who mine lignite; (2) users

of lignite who operate lignite-fueled electric

generating plants and the nation’s only commercial

scale “synfuels” plant that converts lignite into

pipeline-quality natural gas; and (3) suppliers of

goods and services to the lignite-coal industry.

Lignite is a type or “rank” of coal distinct from

other ranks. Due to its characteristics, its principle

use is as fuel for power plants, and lignite-fueled

power plants are often mine-mouth plants, meaning

that its economic value is almost entirely undermined

when the power plants using the fuel are no longer

allowed to. LEC’s members have invested substantial

amounts in the operation of lignite-fueled power

plants, lignite coal mines supplying those plants, and

businesses that supply goods and services to lignite

owners and users based on the express statutory

provisions governing EPA, which establish the limits

to its authority. The lignite mines and reserves,

together with the right to mine additional reserves,

1 Amicus has timely notified counsel for all parties of its intent

to file this brief. Sup. Ct. Rules 37.2. No party or counsel for a

party authored this brief in whole or in part, and no person or

entity, other than LEC, made any monetary contribution to its

preparation or submission. Sup. Ct. Rule 37.6.

2

have substantial economic value that will be

significantly impaired if EPA regulations infer

authority outside those express statutory provisions.

SUMMARY OF ARGUMENT

The Court should grant North Dakota’s petition

for certiorari because it makes a compelling and

timely case for this Court to place limits on the vast

authority EPA is granted by the D.C. Circuit’s

decision. The immediate impacts of and uncertainty

created by the grant of this authority warrant this

Court’s action to grant the North Dakota petition and

reverse the D.C. Circuit’s decision.

Of most concern to LEC is the manner in which

the D.C. Circuit allows EPA to ignore this Court’s

Major Questions Doctrine, which curtails the type of

wide-ranging and impactful powers the D.C. Circuit

would allow EPA to infer from specific and limited

language in Section 111(d) of the Clean Air Act, 42

U.S.C. § 7411(d) (“Section 111(d)”). By doing so, the

D.C. Circuit decision empowers EPA to repeat the sin

committed in the Clean Power Plan—to convert EPA’s

statutorily recognized role as environmental

regulatory into a roving commission as energy

policymaker without any explicit statutory authority

to do so.

LEC is also disturbed by the manner in which the

D.C. Circuit would allow EPA to flip the roles of the

state and federal government under Section 111(d)

and, in so doing, convert the cooperative federalism

3

embodied in the Clean Air Act into a top-down

coercive federalism regime that subjugates North

Dakota and every other state to be a pawn, rather

than a partner, of the federal government.

ARGUMENT

I.

THE COURT SHOULD GRANT THE PETITION.

The risk of EPA as energy policymaker creates

immediate generation planning impacts on LEC’s

members because the D.C. Circuit’s decision grants

EPA authority to force generation shifting from coal

to renewable sources, regardless of the useful life of

those coal facilities, their economic value to LEC’s

members, or the critical role they play within the

North Dakota electric grid to ensure reliability and

resilience. North Dakota Pet. for Cert. at 5.

North Dakota has repeatedly enacted legislation

declaring it to be an essential government function

and public purpose for the state to assist with the

development of lignite resources within the state. See

e.g., N.D. CENT. CODE §§ 54-17.5-01, 57-06-17.1, 5739.2-04.11. Pursuant to and consistent with these

statutory directives, LEC works in partnership with

the State of North Dakota through programs focused

on enabling, developing, promoting, and enhancing

both the present and the future use of lignite.

These programs include the “North Dakota

Lignite Research, Development and Marketing

Program” and the “Enhance Preserve and Protect

Project.” Very recently, the North Dakota Legislature,

4

once again, explicitly endorsed the importance of the

current and future use of lignite to the state with the

passage of House Bill 1452 during the 2021

Legislative Session which created the “Clean and

Sustainable Energy Authority” and defined

“sustainable” to mean “a technology or concept that

allows the use of a natural resource to be maintained

or enhanced through increased efficiency and life cycle

benefits while either increasing or not adversely

impacting energy security, affordability, reliability,

resilience, or national security.”

These programs provide grants and funding to

promote the development of new lignite-fueled

Electric Generating Units (“EGUs”) in the future and

of cleaner ways to utilize lignite in both new and

existing EGUs, including reducing emissions of CO2.

One way North Dakota encourages the commercial

development of lignite deposits within the state is

with the Advanced Energy Technology program.

Through this program, the state offers financial

support to commercialize transformational lignite

development, such as by sharing the cost of the early

development phase of new and more advanced lignitebased energy conversion facilities.

As a result of many of these state priorities and

programs, as well as the affordability, reliability, and

resilience of the power produced by lignite and coal,

North Dakota relies on coal-based generation for

approximately 65% of its electricity, and lignite

powers a majority of the state’s existing EGUs.

5

Against that backdrop, it is important to

emphasize that electric generation resource planning

decisions are happening now and the vast authority

the D.C. Circuit decision cedes to EPA is impacting

decision-making now. Power companies and electric

cooperatives, as well as the coal producers and

support facilities that supply them, must plan for the

generation-shifting powers created by the D.C Circuit

decision. This could lead to significant and permanent

retirement decisions being made long before EPA

actually fills in the amount on the blank check of

authority the D.C Circuit has given it.

We have seen this movie before. The legal failings

of the CPP and the irreparable harm that it would

have inflicted led the Court to stay the CPP and

should motivate it to stop the rerun of the CPP show

now. The issues the Court will resolve by placing

appropriate limits on the amount of authority that can

be inferred from Section 111(d) of the Clean Air Act

are ripe for review and warrant immediate attention.

II.

THE COURT SHOULD REVERSE THE D.C. CIRCUIT’S

DECISION.

The Major Questions Doctrine, the express terms

of Section 111 of the Clean Air Act, and the

cooperative federalism principles embodied therein,

warrant reversal of the D.C. Circuit’s decision.

6

A.

This Situation

Application of

Doctrine.

Was Tailor-Made for

the Major Questions

While it is difficult to rank which legal failing of

the CPP was the most egregious, among the most

obvious was the grab of energy policymaking

authority attempted by EPA (and now sanctioned by

the D.C. Circuit) through the re-definition of one

phrase in the Clean Air Act—“Best System of

Emission Reduction (BSER).” Breaking from explicit

statutory text and 45 years of regulatory and judicial

precedent, the EPA redefined the word “system” to

mean the entire electricity grid such that it could

derive a mandatory emission standard based, not on

what was achievable inside the fence of a facility, but

instead on its own assumptions of what could be built

elsewhere in the bulk power system to offset a

facility’s emissions.2

2 The scope of authority the D.C. Circuit would cede to EPA

under Section 111(d) of the Clean Air Act does not just impact

North Dakota’s coal and power producers. The legal precedent in

question here is a serious concern to other energy producers

important to North Dakota and other energy-producing states.

The newly expansive definition of BSER permitted by the D.C.

Circuit decision would pave the way for inferred authority to

regulate greenhouse gas (GHG) emission regulations across the

vast interconnected pipeline networks that link the exploration,

production, transportation, and refining components of the oil

and gas industry. This pipeline system could easily be viewed as

just as much a “system” as the electric grid—which was how EPA

rationalized requiring reductions “outside the fence” of power

plants in the CPP. What is to stop EPA from imposing GHG

7

This “outside the fence” approach, while

acceptable as a method of flexible compliance with an

emission standard, has never been accepted as a

means to derive mandatory limits applicable to states

or individual facilities, let alone seize control of

wholesale energy markets. Because the EPA made its

own assumptions about the power grid in deriving the

emission standard in the CPP, it was able to impose

its own policy preferences about what type of electric

generation could and should be built in the grid

(primarily renewables) and made it impossible for

traditional fossil fuel-fired plants (coal and simplecycle natural gas) to meet the standard it derived

without a massive transfer of wealth from fossil

energy owners to renewable developers.

The Court has made clear that EPA has no

discretion to act beyond the power delegated to it by

Congress. Util. Air Regul. Grp. v. E.P.A. (“UARG”),

573 U.S. 302, 315 (2014). This Court has “typically

greet[ed]. . . with a measure of skepticism” situations

“[w]hen an agency claims to discover in a long-extant

statute an unheralded power to regulate a significant

portion of the American economy.” UARG, 573 U.S. at

324. And the Court expects “Congress to speak clearly

emissions on individual operators in the upstream sector based

on assumed reductions that could be achieved from other

operators, or even downstream refineries, because they are all

connected to the same pipeline? This economy-wide regulatory

authority is no more contemplated than what EPA argued for in

the CPP, yet is certainly within its reach based on the vast

authority the D.C. Circuit decision cedes EPA by inference.

8

if it wishes to assign to an agency decisions of vast

‘economic and political significance.’” Id. (quoting

F.D.A. v. Brown & Williamson Tobacco Corp., 529

U.S. 120, 160 (2000)).

Based on the aforementioned importance of the

lignite industry to North Dakota and LEC’s members

and the CPP’s forced premature retirement of a

significant component of North Dakota’s lignite

industry, the D.C. Circuit’s blank check to EPA

certainly exceeds the threshold of “economic and

political significance” established by this Court. And

Section 111(d) certainly qualifies as a “long-extant

statute” that comes woefully short of “speaking

clearly” about the unprecedented federal energy

policymaking that the D.C. Circuit would allow it to

confer upon EPA by inference.

The Court should apply the Major Questions

Doctrine and, like the UARG decision, keep EPA

tethered to the authority expressly granted to it by

Congress and reverse the D.C. Circuit decision to do

otherwise.

B.

The D.C. Circuit’s Decision Would Allow

EPA to Once Again Make Pawns Out of Its

Cooperative Federalism Partners.

One of the most troubling legal failings of the CPP

from a state point of view was the manner in which it

shifted power from the states to the federal

government, in direct conflict with express terms of

Section 111 and the cooperative federalism

9

compromise that is built into that and several other

sections of the Clean Air Act (and most federal

environmental statutes).

Among the many state-specific considerations

that EPA “shall permit” under Section 111(d), each

state is to utilize is “the remaining useful life of the

existing source to which such standard applies.” Id.

The D.C. Circuit jumped right over these plain terms

in concluding that the EPA has authority to “reach

past the States and directly promulgate standards of

performance” to States’ existing sources under the

CPP. North Dakota Pet. for Cert. at 6. As a result, the

D.C. Circuit’s decision permits the EPA to impose

standards on existing sources, irrespective of their

useful life or other considerations EPA is mandated to

allow states to consider (and that it must consider

itself if it were to impose its own direct federal plan).

Like EPA when defending the CPP before this

Court issued its stay, the D.C. Circuit decision waves

the banner of “flexibility” in attempting to explain

away the coercive nature of the CPP’s federally

mandated emission budgets. The flaw in this claim, of

course, was that state carbon budgets were set at

unreasonably low levels such that states were

functionally forced to implement the assumptions

EPA made when they derived the budgets to begin

with. For many states, EPA’s assumptions were

completely unrealistic, including the construction of

unprecedented levels of renewable energy.

10

This approach—to mandate budgets based on

unrealistic assumptions and then claiming that states

can “flexibly” comply—amounts to coercion, not the

cooperative federalism structure established by

Congress. As one state environmental agency official

appropriately pointed out, EPA was treating states

more like “pawns” than “partners.”

The CPP did not abide by the express statutory

command to allow state-specific considerations to be

governed by state decision-makers implementing the

guidelines promulgated by EPA. In fact, the CPP

effectively commandeered the states, in violation of

the Tenth Amendment, to impose the EPA’s chosen

carbon standards—irrespective of the States’

preferred (and more economically sensible) power

sources. See e.g., New York v. United States, 505 U.S.

144, 188 (1992). Neither North Dakota nor any other

energy producing state can be stripped of its ability to

control its energy destiny in the brazen way

attempted by the CPP and permitted by the D.C.

Circuit’s decision.

CONCLUSION

The D.C. Circuit’s sanction of the extra-statutory

“outside the fence” approach in the CPP stopped EPA

from returning back to the approach that made

American

environmental

regulation

great—

partnering with states to control pollution with

technology, not ideology. It is through the

development and deployment of technology, once

11

commercially demonstrated, that the United States

has made its air and water safe while remaining

globally competitive. The D.C. Circuit decision

illegally expands EPA’s authority and allows it to

regress back to imposing ideological policy preferences

that pick winners and losers from the top down with

vast economic consequences for LEC’s members and

the citizens of energy producing states across the

country.

The Court should stop this regression and grant

the petition for certiorari and reverse the D.C. Circuit

decision.

Respectfully submitted,

Michael J. Nasi

JACKSON WALKER L.L.P.

100 Congress Avenue

Suite 1100

Austin, Texas 78701

mnasi@jw.com

(512) 236-2216

Counsel for Amicus Curiae

Lignite Energy Council

July 23, 2021