SCOTUSblog: Environmental Protection Agency v. EME Homer City Generation; consolidated with American Lung Association v. EME Homer City Generation
Discussion: Under the Clean Air Act (CAA), the Federal Government sets air quality standards, but States retain the primary responsibility for choosing how to attain those standards within their borders. The CAA contains a "good neighbor" provision which requires upwind States to bear responsibility for their fair share of pollution caused in down-wind States. To implement the statutory good neighbor requirement, the Environmental Protection Agency (EPA) promulgated the Transport Rule (or Cross-State Air Pollution Rule, CSAPR), which defines emissions reduction responsibilities for 28 upwind States based on those States' contributions to downwind States' air quality problems. An array of power companies, coal companies, labor unions, trade associations, States, and local governments petitioned for review of EPA's Transport Rule. The D.C. Circuit ruled that States, not the Federal Government, are the primary implementers after EPA has set the upwind States' good neighbor obligations. As a result, the court found that the EPA had exceeded its statutory authority and vacated the rule. In appealing the ruling of the D.C. Circuit, the EPA argued both that the court exceeded its jurisdiction and erred on the merits.
Issue: The questions before the Court are (1) whether the Court of Appeals lacked jurisdiction to consider the challenges to the Clean Air Act on which it granted relief; (2) whether states are excused from adopting state implementation plans prohibiting emissions that “contribute significantly” to air pollution problems in other states until after the EPA has adopted a rule quantifying each state’s inter-state pollution obligations; and (3) whether the EPA permissibly interpreted the statutory term “contribute significantly” so as to define each upwind state’s “significant” interstate air pollution contributions in light of the cost-effective emission reductions it can make to improve air quality in polluted downwind areas, or whether the Act instead unambiguously requires the EPA to consider only each upwind state’s physically proportionate responsibility for each downwind air quality problem.
Holding: In a 6-2 decision, the Supreme Court reversed the decision of the D.C. Circuit and ruled that the CAA does not command that States by given a second opportunity to file a State Implementation Plan (SIP) after EPA has quantified the State's interstate pollution obligations. The EPA's cost-effective allocation of emission reductions among upwind States is a permissible, workable, and equitable interpretation of the Good Neighbor Provision.