Immediately after the EPA announced steps to enact broad-based emissions controls, a flurry of lawsuits from a range of interested parties ensued. The lawsuits challenge the procedures that led to the EPA’s measures, and Congressional legislation restricting EPA authority is also pending, threatening to tie up the regulatory process in a series of protracted lawsuits. Two associates with the Washington law firm of Steptoe and Johnson discuss the legal implications of suits challenging EPA regulation of GHG emissions and the impact on interested businesses.

Also, see a special GR Analysis of summer oil prices and their effect on the forthcoming energy debate.

As Congressional action on emissions reduction has slowed, the task has recently swung back to the Environmental Protection Agency. But enacting broad-based reform is a task originally intended for the Congress, and when it is left to the courts and agencies, the inevitable result is that it takes longer to accomplish less. If the debate continues to be thwarted in the legislative branch and the executive and judicial branches ultimately seek to implement emissions controls, an array of legal challenges will create uncertainty concerning the future regulatory landscape and will make difficult the task of anticipating the likely impact on the business community.

In April 2007, the Supreme Court held in Massachusetts v. EPA that greenhouse gases (GHGs) constitute “air pollutants” as that phrase is used in the Clean Air Act. The Court found that Congress authorized EPA to regulate GHG emissions when it enacted the Clean Air Act in 1970.  It soon became apparent, however, that treating GHGs as regulated air pollutants would lead millions of previously unregulated buildings and facilities to fall under the Act’s various permitting requirements. The inevitable flood of permit applications would drown already under-resourced EPA administrators.

To avoid this result, EPA proposed a “tailoring rule” last October that would temporarily raise the emissions thresholds triggering permit requirements. This would reduce the number of GHG sources that otherwise would be subject to carbon emissions limits.  Shortly after proposing the tailoring rule, EPA finalized its finding under the Clean Air Act that GHGs in the atmosphere endanger both public health and the environment. While this “endangerment finding” did not impose any requirements on industry or other entities, it was a prerequisite to finalizing EPA’s proposed greenhouse gas emission standards for light-duty vehicles, announced last Thursday.  

As is generally the case when federal agencies make controversial decisions, lawsuits challenging the findings have been filed and will undoubtedly continue to be filed.  Opponents of EPA’s actions can generally file suit on one of two counts:  They can challenge the process leading to the endangerment finding as insufficient, or they can challenge the proposed tailoring rule’s constitutionality once it is finalized.

A variety of business groups, led by the United States Chamber of Commerce, as well as at least fifteen states and several Republican lawmakers, have already filed lawsuits challenging the endangerment finding, asking the U.S. Circuit Court of Appeals for the District of Columbia to set it aside. Petitioners are challenging the endangerment finding by arguing that the so-called “Climategate” emails and errors subsequently discovered in the Intergovernmental Panel on Climate Change report on climate change undermine the science on which EPA relied for the endangerment finding.  Since the information contained in those emails came to light only after the EPA finalized the endangerment finding, petitioners argue that EPA should reconsider the finding.

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