At What Costs? Environmental Regulations and Cost-Benefit Analysis in Michigan v. EPA, 49 J. Marshall L. Rev. 1257 (2016)

The John Marshall Law Review, Nov 2017

Thomas Skelton

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At What Costs? Environmental Regulations and Cost-Benefit Analysis in Michigan v. EPA, 49 J. Marshall L. Rev. 1257 (2016)

At W hat Costs? Environmental Regulations and Cost-Benefit A nalysis in Michigan v. EPA , 49 J. Marshall L. Rev. 1257 (2016) as Skelton Follow this and additional works at: http://repository.jmls.edu/lawreview Part of the Administrative Law Commons, and the Environmental Law Commons - Thom Article 9 THOMAS SKELTON* I. INTRODUCTION By some estimates, the Clean Air Act1 (CAA) has provided $22 trillion in health savings and benefits to the general public.2 * Tom Skelton is a third year law student at The John Marshall Law School. His interests include environmental and international law. He wishes to thank his family, professors, and the John Marshall Law Review editorial staff for their support with the comment. 1. 42 U.S.C. §§ 7401–7671q (2016). 2. Alan H. Lockwood, How the Clean Air Act Has Saved $22 Trillion in However, in Michigan v. EPA, 3 the Supreme Court struck down hazardous air pollution (HAP) regulations in the CAA because the U.S. Environmental Protection Agency (EPA) failed to consider costs early enough in the rule making process. 4 These regulations had been held up in legal challenges and bureaucratic politics for over 20 years. 5 Given the enormous benefit of fully implementing the CAA, why did the Court limit the EPA’s ability to enforce the law? No matter its rationale, the Court’s holding has led to diverse reactions across the legal and political community. 6 Environmentalists have downplayed the significance of the Court’s holding, while conservatives interpreted the decision as lending evidence to support their rejection of President Obama’s environmental agenda. 7 Meanwhile, industry experts have reported that most power plants instituted measures to meet these regulations even as they were challenged by industry groups in the courts. 8 From a legal perspective, Michigan v EPA is the latest addition to an evolving body of case law interpreting the CAA. 9 The Supreme Court has addressed cost-benefit issue when interpreting environmental statutes and regulations no fewer than three times over the past four decades. 10 However, in Michigan v. EPA, the Court made a questionable break from a longstanding principle giving deference to a federal agency’s reasonable interpretation of ambiguous statutory language. 11 This break could have significant implications for President Obama’s Clean Power Plan. 12 This comment first gives an overview of the CAA and the Clear Air Act Amendments of 1990 13 (1990 CAA Amendments). It discusses both the structure of the CAA, and the legislative history of the 1990 CAA Amendments including some of the law’s policy and political goals. Turning to the judicial interpretation of the CAA, this comment will present a legal history of the particular section of the CAA at issue in Michigan v. EPA. 14 The Analysis section critiques the Supreme Court’s decision in Michigan v. EPA. The decision misapprehended statutory context and misapplied relevant case law. Additionally, the Court utilized a novel application of the Chenery doctrine, an important administrative law principle named after the landmark 1943 case SEC v. Chenery Corp. 15 concerning how government agencies justify their actions, in order to exclude a cost-benefit analysis from judicial review. 16 The Analysis section will also discuss the possible impacts of the Michigan v. EPA decision on the Clean Power Plan. The Proposal section proposes litigation goals that Clean Power Plan defenders should pursue in light of the Michigan v. EPA decision. First, Clean Power Plan defenders must invest in the major questions argument. 17 Second, defenders of the Clean Power Plan need to focus on existing energy market conditions. Third, Clean Power Plan defenders need to define and explain benefits and co-benefits of the Clean Power Plan thoroughly to the King v. Burwell, 135 S. Ct. 2480, 2489 (2014) (affirming Chevron two step framework); see also FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000) (holding same). 12. See, e.g., Eric Groten, Here Be Dragons: Legal Threats to EPA’s Proposed Existing Source Performance Standards for Electric Generating Units, 45 ENVTL. L. REP. 10116, 10117 (2015) (examining generally the statutory problems with the Clean Power Plan existing immediately before the Michigan v. EPA decision); see also Ann E. Carlson & Megan M. Herzog, Symposium: Text in Context: The Fate of Emergency Climate Regulation after UARG and EME Homer, 39 HARV. ENVTL. L. REV. 23, 24 (2015) (suggesting the Court will decide the Clean Power Plan’s fate according to either a UARG or EME Homer City framework). 13. Clean Act Air Amendments of 1990 , Pub. L. No. 101–549, 104 Stat. 2399 (1990). 14. 42 U.S.C. § 7412(n) (2016); Michigan v. EPA, 135 S. Ct. at 2705. 15. SEC v. Chenery Corp., 318 U.S. 80 (1943) 16. See id. at 87 (1943) (stating, “The grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.”); see also Michigan v. EPA, 134 S. Ct. at 2710 (applying Chenery doctrine). 17. See Brown & Williamson Tobacco Corp., 529 U.S at 159-60 (holding that Congress does not delegate to federal agencies the power to settle major political or economic questions); Kevin O. Leske, Major Questions About the “Major Questions” Doctrine, 5 MICH. J. ENVTL. & ADMIN. L. 479, 484-485 (2016) (describing the major questions doctrine). Court. The Michigan v. EPA decision shows that a fraction of the Court is skeptical of the EPA’s attempts to use existing provisions in the CAA to address climate change concerns. If advocates for the Clean Power Plan focus on the concerns raised in Michigan v. EPA, they may be able to defend the Clean Power Plan successfully. BACKGROUND: A HISTORY OF THE CAA AND THE STATUTE AT ISSUE IN MICHIGAN V. EPA Throughout the history of the CAA, the law has adjusted to regulatory challenges and demands by the public for stricter pollution controls. 18 Since the CAA was first enacted in 1970, Congress has substantially amended the law on two occasions. 19 To develop an informed understanding of the CAA as it stands today, it is first necessary to understand the historical difficulties in implementing effective pollution controls faced by Congress and the President. A. Structure and Policy of the Clean Air Act 1970–1990 The 1970 CAA emerged from a variety of federal policies and laws designed to control air pollution. 20 The federal government tried to incentivize states to create air pollution control measures through grants during the 1950s and 1960s. 21 In 1967, Congress passed the Air Quality Act22 which required states to establish air quality standards for metropolitan regions or else face federally mandated standards. 23 However, this legislation was ultimately unsuccessful. 24 By 1970, no state had established air quality standards, and in response Congress created the original CAA. 25 The 1970 CAA included a variety of measures to address air pollution from stationary and moving sources. 26 Two major provisions of the CAA mandated national ambient air quality standards (NAAQS) on category pollutants for specific geographical regions and for new stationary pollution sources. 27 The CAA allowed states to develop state implementation plans (SIP) to meet these air quality standards. 28 Congress also mandated emissions standards based on the best available emissions controls for each specific industry. 29 Additionally, the CAA gave the EPA discretion to regulate HAPs based on the Agency’s understanding of public health risks. 30 The CAA established causes of action for the EPA or private citizens to challenge dangerous polluters in court as well. 31 The 1970 CAA contained many provisions governing “moving sources of pollution,” a term which primarily referred to cars and automobile emissions. 32 Specifically, the EPA required the auto industry to reduce emissions of carbon monoxide, hydrocarbons, and nitrogen oxide by 90% for new vehicle models. 33 Additionally, cars had to maintain their emissions levels for 5 years or 50,000 miles. 34 The government levied a $10,000 fine for removing vehicle emission control devices. 35 Many of the more ambitious programs in the 1970 CAA proved to be difficult to implement in practice, resulting in the 1977 CAA Amendments. 36 In 1977, the auto industry threatened to shut down production of 1978 model cars because they faced a penalty of $10,000 for each non-compliant car. 37 Additionally many areas in the country fail to meet the 1970 CAA’s NAAQS provisions. 38 In response to these challenges, the 1977 CAA Amendments largely extended the deadlines for NAAQS and vehicle emissions compliance. 39 26. See BELDEN, supra note 23, at 6–7 (discussing the 1970 CAA) . 27. Id. 28. BRYNER, supra note 18, at 83. 29. BELDEN, supra note 23, at 7. 30. See id. (discussing HAP regulations); see also BRYNER, supra note 18, at 125–26 (mentioning early HAP regulations in the CAA). 31. BRYNER, supra note 18, at 84. 32. Id. at 83–84. 33. See id. at 83 (detailing air quality regulations for vehicles). For nitrogen oxides this reduction was from 1971 model years, while for carbon monoxide and hydrocarbons it was from 1970 model years. Id. 34. Id. at 84. 35. Id. 36. BELDEN, supra note 23, at 7 (describing the lack of progress in achieving the goals of the 1970 CAA) . Clean Air Act Amendments of 1977, Pub. L. No. 95-95, 91 Stat. 685 (1977). 37. BRYNER, supra note 18, at 85. 38. BELDEN, supra note 23, at 7. 39. BRYNER, supra note 18, at 85. During the 1980s, President Ronald Reagan changed how government agencies create regulations, which resulted in delayed implementation of many CAA provisions. 40 Government regulations had to meet cost-benefit analyses, and the President established an appeals process through the Task Force on Regulatory Relief to resolve interagency conflicts. 41 This intricate appeals process resulted in regulatory morass and a failure to address many pressing environmental problems through rule making and enforcement. 42 In 1983, for example, the EPA introduced rules to curb acid rain. 43 Member of Reagan’s administration ridiculed the program as overly expensive. 44 Because of the complicated regulatory oversight structure, the rules went nowhere. 45 Congressional frustration with inaction at the EPA sparked unsuccessful efforts to amend the CAA throughout the 1980s. 46 During the decade, the House considered various measures which would become part of the 1990 CAA Amendments. 47 Ultimately, the measures failed either in committee, or before a floor vote. 48 In the Senate in 1988 , George Mitchell managed to pass a bill similar to the 1990 CAA Amendments out of the Environment and Public Works Committee. 49 The measure died before a floor vote during contentious negotiations between the United Mine Workers and environmentalists. 50 While the 1980s saw stymied efforts at environmental legislation, various measures were percolating in Congress to address major environmental problems in the nation. 51 B. The 1990 CAA Amendments After the 1988 presidential elections, many important leaders in Washington, including President George H.W. Bush and Senator George Mitchell, wanted to amend the CAA. 52 Congress unsuccessfully tried to reform the struggling law for much of the previous decade, while strong environmental challenges faced the nation. 53 Together, these forces combined to spark comprehensive changes in the way the nation handled air pollution. 54 Motivation for some of the 1990 CAA Amendments came from increasingly difficult environmental problems in the United States and abroad. 55 Polluters were required to report their emissions levels starting in the late 1980s. 56 The results disturbed the general public, as it showed many businesses released substantial amounts of chemicals that cause acid rain and ozone depletion. 57 Public consciousness of ozone depletion rose throughout the 1980s, culminating in the Montreal Protocol, an international agreement regulating emissions of ozone depleting chemicals. 58 Around the same time, two man-made disasters — the Bhopal chemical explosion and the Exxon Valdez ship wreck — increased public awareness of chemical hazards. 59 By the start of the 1988 Congressional term, the public was ready for Congress to pass major environmental legislation. 60 2016] Along with these environmental challenges, two important political changes sparked the effort to reform the CAA. 61 First, in the 1988 presidential campaign, Republican presidential candidate George H.W. Bush needed to distance himself from the then unpopular Republican President Reagan. 62 Bush focused on reforming the CAA as a way to present himself as a different kind of Republican. 63 Once Bush was president, he sought to make good on his reform promise, and so he introduced a bill to reform the CAA. 64 While Congress did not ultimately adopt the legislation, the bill added credibility to the issue and established a benchmark in negotiations between Republicans and Democrats. 65 Second, a change in Senate leadership removed a barrier to the 1990 CAA Amendments. 66 In 1998, George Mitchell replaced Robert Byrd as majority leader in the Senate. 67 Byrd was a major barrier to passing environmental legislation in the past. 68 He represented West Virginia, a state with a large coal mining industry, and wanted to protect jobs in his state. 69 Senator Mitchell, on the other hand, was a strong environmentalist who previously worked on CAA reforms. 70 The 1990 CAA Amendments were the product of intense negotiations and compromise in Congress. 71 First, Congressmen John Dingell and Henry Waxman came together on a framework to pass CAA legislation out of the House. 72 This was an important step since many thought the House would have been less likely to pass legislation than the Senate. 73 In the Senate, George Mitchell arranged months of late night negotiations in his office involving the President’s staff and Senate Republicans to come up with a bill. 74 After reaching an agreement on a bill, Senator Mitchell warded off an attempt by Senator Byrd to defeat political support for the bill. 75 Senator Byrd introduced an amendment to include bloated unemployment benefits for coal miners laid off because of the bill. 76 This amendment was likely to destroy political support for the bill, but the Senate voted it down by one vote. 77 The Senate then passed its own CAA legislation. 78 The two bills were different in many ways, and therefore were subjected to a conference committee that produced the final version of the 1990 CAA Amendments. 79 What emerged from the conference committee was a series of changes to the CAA designed to meet complex new environmental challenges. 80 The 1990 CAA Amendments added new classifications to the NAAQS along with stricter deadlines for emissions reductions and broader stationary source coverage. 81 They also required reductions in hydrocarbon and nitrogen oxide emissions from cars by 35% and 60%, respectively. 82 New cars were required to maintain these emissions standards for 10 years or 100,000 miles. 83 Additionally, the legislation established a cap and trade program for sulfur dioxide emissions and implemented ozone protection controls among other measures. 84 In regards to HAPs, the EPA had formerly been reluctant to regulate HAPs according to public health standards, primarily for cost reasons. 85 Between 1970 and 1990, the EPA codified only seven HAP regulations in total. 86 The new law listed 189 HAPs and required the EPA to promulgate Maximum Achievable Control Technology (MACT) standards mandating polluters install equipment to curb emissions. 87 Congress required the EPA to conduct a risk assessments to determine if more emissions reductions were necessary to ensure an “ample margin of safety” for HAP emissions. 88 The specific subsection of the CAA at issue in Michigan v. EPA — 42 U.S.C. § 7412(n) — was part of the Title III HAP reduction legislation. 89 C. A Legal History of HAP Regulations for Coal and Oil Power Plants at Issue in Michigan v. EPA There is a unique legislative history to 42 U.S.C. § 7412(n) that emerged out of the conference committee for the 1990 CAA Amendments. The statute’s plan text requires the EPA to study the adverse health effects from HAP emissions for coal and oil power plants. 90 Then, the statue provides that: “[t]he Administrator shall regulate electric utility steam generating units [coal and oil power plants] under this section, if the Administrator finds such regulation is appropriate and necessary after considering the results of the study.”91 As the official legislative history of the 1990 CAA Amendments shows, there was some uncertainty concerning the application of HAP emission reductions to coal and oil power plants. 92 For six substances, the EPA found that regulating coal and oil power plants would not result in any public health benefit, but for others the Agency was less certain. 93 The Senate passed a version of the law without any separate HAP regulation for coal and oil power plants, while the House version included the language present in § 7412(n). 94 The conference committee adopted the House’s language to compensate for the uncertainty involved in regulating HAPs from coal and oil power plants. 95 Thus, the EPA could regulate “only if warranted by the scientific evidence.”96 This ensured that the EPA would not issue duplicative regulations on coal and oil power plants. 97 In 1998, the EPA found that it was necessary and appropriate to regulate HAP emissions from coal and oil power plants. 98 However, President George W. Bush reversed this finding in 2003 as part of his Clear Skies Initiative. 99 The plan removed coal and oil power plants from the list of HAP regulated sources and implemented a cap-and-trade scheme for Mercury emissions instead. 100 However, in New Jersey v. EPA, the United States Court of Appeals for the District of Columbia Circuit ordered the EPA to issue HAP regulations despite to the Clean Skies Initiative. 101 That court held that the EPA failed to follow the statutory procedure for de-listing a source of pollution. 102 The EPA in 2012 restarted the rule making process for regulating HAPs from coal and oil power plants. 103 The Agency found that the regulations were appropriate because of risks to public health and the environment and necessary because the CAA’s other provisions did not eliminate the risks. 104 Additionally, the EPA argued that “costs should not be considered when deciding whether power plants should be regulated.”105 The Court in Michigan v. EPA reviewed the EPA’s rationale for regulating HAPs from fossil fuel fired power plants. 106 D. The Court’s Reasoning in Michigan v. EPA The Court utilized statutory context and previous case law to support its conclusion that the EPA’s statutory construction was unreasonable. 107 Other parts of § 7412(n) direct the EPA to conduct a study that considers costs of available technology to reduce mercury emissions from other sources. 108 According to the Court, since the statute directs the EPA to consider costs in that study, the EPA should also consider costs in its decision to regulate coal and oil power plants. 109 The EPA cited Whitman v. American Trucking Ass’ns110 in support of its reading of § 7412(n). 111 While Whitman declined to require the EPA to consider costs in ambiguous sections of the CAA, the Court in Michigan v. EPA limited this holding. 112 Whitman only stood for the idea that the EPA should not read-in cost considerations when the statute directs the EPA to regulate based on factors excluding costs. 113 Thus, the statute in Michigan v. EPA was too dissimilar for the Court to extend its holding in Whitman. 114 The Court also makes some interesting analogies to highlight what it sees as logical flaws in the EPA’s reasoning. 115 The EPA justified its decision to not consider costs when initially deciding whether HAP regulations were appropriate and necessary by claiming it could consider costs when setting emissions standards. 116 The Court quipped back that by the EPA’s logic, someone could find it appropriate to buy a Ferrari without considering costs, because he plans to think about costs when considering extra features. 117 The analogy shows the Court’s skepticism of any statutory construction that does not include a cost-benefit analysis at the earliest point possible. 118 III. ANALYSIS: MICHIGAN V. EPA IS BAD PRECEDENT ON MANY DIFFERENT LEVELS While coal and oil power plants took measures to comply with HAP regulations, industry groups and states challenged the same rules in the courts. 119 The groups sustained their attack in the United States Court of Appeals for the District of Columbia Circuit, 120 and on appeal to the Supreme Court. 121 In striking down the regulations, the Court misapprehended the larger statutory context and misapplied precedent governing Chevron deference cases. 122 Additionally, the opinion used the Chenery doctrine, a well-known administrative law principle, to limit the Court’s judicial review. 123 This application distorts the policy considerations underlying the doctrine. 124 Nevertheless, Michigan v. EPA is Supreme Court precedent and could have substantial impacts on the Obama Administration’s Clean Power Plan. 125 A. Problems with the Court’s Michigan v. EPA Decision Michigan v. EPA ignores many important parts of the regulatory system for HAP emissions established by § 7412. 126 It also never discussed the body of relevant case law which ignored or downplayed cost consideration arguments as well. 127 The trend 2016] in Chevron cases is to give deference to a federal agency’s interpretation of statutes under the agency’s exclusive control. 128 However, Michigan v. EPA seems meddlesome in comparison to other Chevron doctrine decisions. 1. The EPA Considered Costs at Other Points in the Rule Making Process The majority in Michigan v. EPA misapprehended § 7412’s larger statutory context, especially the ways in which the EPA considered costs in devising HAP regulations. 129 According to the statutory scheme, a stationary source subject to HAP regulations must meet the MACT standard for its category. 130 This standard is the average HAP emissions level for the best performing 12% of pollution sources in the category. 131 The EPA has the discretion to set beyond the floor standards that are more stringent than typical MACT standards, but must consider costs in making that decision. 132 For the dissent in Michigan v. EPA, this scheme provides costs controls in at least two ways. 133 First, the EPA sets the MACT standards at the level of the best performing market actors. 134 Since these market actors were able to perform without incurring excessive costs, it makes sense to conclude that other market actors could also do so. 135 Both groups operate in the similar market conditions, have a similar customer population, and face similar challenges in controlling air pollution. 136 Second, § 7412(d) gives the EPA wide discretion in establishing categories and sub-categories for different polluters. 137 These subcategories define the MACT standards themselves, and allow the EPA to consider specific characteristics in the power market. 138 The EPA can then define the MACT standards in ways that account for industry compliance costs. 139 Indeed, the EPA exercised its discretion in multiple ways to consider costs. 140 The Agency separated coal and oil plants into discrete categories and further divided these sources based on the processes the plants use to make energy. 141 The EPA then proceeded to allow power plants to comply with the regulations based on either input or output standards. 142 It also extended the bubble concept, where the EPA aggregates emissions from all sources of pollution at a site in determining compliance, to include the regulation of power plants. 143 These are just some of the cost considerations included in the rule. 144 Rebutting the majority’s Ferrari analogy, the dissent reframed the cost issue in terms more favorable to its reading of the overall context: A better analogy might be to a car owner who decides without first checking prices that it is “appropriate and necessary” to replace her worn-out brake-pads, aware from prior experience that she has ample time to comparison-shop and bring that purchase within her budget. Faced with a serious hazard and an available remedy, EPA moved forward like that sensible car owner, with a promise that it would, and well-ground confidence that it could, take costs into account down the line.145 Given the many accommodations the EPA made for the coal and oil utility industry, it is hard to fault the dissent for finding the ruling making process to be more than solicitous to the industry’s costs. Michigan v. EPA Fails to Give Deference to the EPA’s Statutory Interpretation, Contrary to the Prevailing Trend in Chevron Cases The Court reviewed the EPA’s decision to regulate HAPs from fossil fuel power plants under the Chevron framework. 146 Under Chevron, the Court gives deference to a federal agency’s interpretation of an ambiguous statute that it exclusively administers if the interpretation is reasonable. 147 For the majority in Michigan v. EPA, it was unreasonable to exclude costs considerations when deciding to regulate. 148 Excluding costs opens the door for regulations where the costs far outweigh the benefits, in the majority’s opinion. 149 In both pre- and post-Chevron cases, the Court has rejected arguments that would revoke the EPA’s statutory construction for economic feasibility reasons. 150 For example, in Union Elec. Co. v. EPA, a power plant challenged Missouri’s SIP on the grounds that the plan was technologically and economically infeasible. 151 Reviewing the criteria the CAA directed the EPA to consider, the Court concluded that the EPA should not consider economic feasibility in reviewing a state plan. 152 The Court came to a similar conclusion in Whitman153 with Justice Scalia, the author of Michigan v. EPA’s majority opinion. The challengers in Whitman argued the terms “requisite” and “adequate margin” in the statutes directing the EPA to regulate ambient air quality standards allowed the Agency to consider implementation costs. 154 While the Michigan v. EPA court tried to limit Whitman’s ruling, the Whitman court found it implausible that a few words in the NAAQS statutes allowed for cost considerations. 155 The Chevron framework has limits that do not fit well with the statute at issue in Michigan v. EPA. 156 FDA v. Brown & Williamson Tobacco Corp. sets out the major questions exception to Chevron deference. 157 Congress presumptively delegates authority to government agencies when it writes ambiguous statutes. 158 However, it is unlikely that Congress would delegate authority to a government agency to regulate a significant part of the economy or resolve an important political question. 159 Congress traditionally addresses major questions through lawmaking. 160 Additionally, one usually must strain statutory interpretation tools to find answer to major questions in existing legislation. 161 The Court does not believe that Congress would delegate enormous power through cryptic statutory language. 162 Therefore, if a government agency uses a vague statute to solve a major question, the agency must find explicit statutory authority for its action. 163 Utility Air Regulatory Group v. EPA is perhaps the most relevant application of the major questions doctrine to a CAA issue. 164 Utility Air Regulatory Group addressed the question of whether the authority to regulate greenhouse gases (GHG) as an air pollutant extended to the CAA’s Prevention of Significant Deterioration (PSD) program. 165 PSD essentially prevents stationary sources from ruining an area’s NAAQS attainment by requiring stationary sources to install best available control technology. 166 The proposed regulations could potentially cover thousands of sources not contemplated under the 1990 CAA Amendments. 167 Additionally, the sources were everyday 2016] businesses, like hotels or small retailers, which the EPA never regulated in the past. 168 To adjust to these inequities, the EPA limited its authority to stationary sources that emit over 100,000 tons of CO2 a year. 169 Even though the EPA tailored its rule to only cover major CO2 polluters, the Court struck down the law. 170 They found that because the EPA’s rule covered such a large portion of the economy, its underlying statutory construction must be unreasonable. 171 Unlike the permitting requirements at issue in Utility Air Regulatory Group, § 7412(n) clearly anticipates HAP regulation of coal and oil power plants. 172 A close reading of the statute and the legislative history proves this point. 173 Additionally, the HAP regulations at issue in Michigan v. EPA would not substantially change the relationship between the EPA and the utility industry. 174 EPA closely regulates coal and oil power plants under other CAA provisions. 175 HAP regulations are more similar to the regulations the Utility Air Regulatory Group Court did uphold. 176 There, the Court allowed the EPA to regulate GHG emissions for sources already covered by the PSD program. 177 The EPA already regulates coal and oil power plants like these already regulated sources at issue in Utility Air Regulatory Group. 178 In light of the 2016] of Appeals for the District of Columbia ruled that the HAPs rules remain in effect while the EPA conducts a more detailed costbenefit analysis. 207 Many people do not expect the Court’s Michigan v. EPA ruling to affect the ultimate fate of the HAPs rule. 208 Courts should not invoke Chenery when the final result of administrative actions are not in dispute. 209 Since it is likely that HAP regulations will meet the Court’s standards, the Court erred in invoking Chenery to limit its judicial review. 210 Beyond this, there are additional reasons to question the Court’s application of the Chenery doctrine. The Chenery doctrine supports many policy considerations. 211 Chenery promotes democratic accountability because it prevents government agencies from changing their justifications for regulatory decisions. 212 Congress, the President, and the public must know exactly why the agency is taking action in order to debate the action accordingly. 213 The doctrine also promotes a nonarbitrary rule of law because the government agency must make well-reasoned decisions or else face reversal by the courts. 214 Finally, Chenery aids judicial management by narrowing the issues for courts to decide when reviewing agency actions similar to the way trial objections preserve legal issues on appeals. 215 The Michigan v. EPA decision, in contrast, does not promote these policy goals. The EPA’s final agency action did not prevent the public from understanding its position on HAP regulations. 216 While the final agency action is long and dense, it contains a detailed overview of the statutory authority supporting the EPA’s decision. 217 A motivated Congressman or interested public citizen could understand the EPA’s position through reading the final action document. The public could hold the Agency accountable for its action by voting against the Agency’s ultimate boss, the President. The EPA’s action was comprehensive and transparent, which gives the public what it needs to hold the Agency accountable through the democratic process. The Michigan v. EPA court chose to focus only on selected portions of the EPA’s final rule. 218 Their decision seems arbitrary given that the EPA did exactly what the Court wanted the Agency to do in order to provide reasonable statutory interpretation. 219 The Agency issued a cost-benefit analysis that showed the HAP regulations were cost efficient. 220 Chenery supports non-arbitrary rule of law because when agencies give reasons for decisions they limit agency discretion to the scope of those reasons. 221 If the Court does not support an outcome within the scope of the reasons provided by the Agency, the non-arbitrary benefit of the Chenery doctrine falls apart. 222 The Court must affirm when agencies act within the scope of a given rationale for a decision. 223 That did not occur in the Michigan v. EPA case. Finally, by refusing to address an adequate ground for affirmance, the Court in Michigan v. EPA marginalized another benefit of Chenery: judicial manageability. 224 Agencies cannot know if the Court will evaluate all asserted grounds for a decision after Michigan v. EPA. 225 The Michigan v. EPA court ignored the Agency’s rationale that satisfied the Court’s demands. 226 Thus, the EPA could not preserve their cost consideration argument in the same way a party in litigation preserves a legal argument at trial. To continue the trial analogy, the EPA asserted its objection by including cost considerations, but the Court used the Chenery 217. Id. 218. Michigan v. EPA, 135 S. Ct. at 2706. 219. HAPs Regulations, supra note 216, at 9306. 220. Id. at 9327. 221. Stack, supra note 88, at 997. 222. See HAPs Regulations, supra note 216, at 9306 (explaining required cost-benefit analysis that accompanied HAP regulation for coal and oil power plants). 223. See Stack, supra note 88, at 997 (describing the non-arbitrary rule of law benefit of the Chenery doctrine). 224. See HAPs Regulations, supra note 216, at 9306 (addressing costs and benefits of HAPs regulations). 225. See Michigan v. EPA, 135 S. Ct. at 2717–18 (Kagen, J. dissenting) (criticizing the majority for focusing single mindedly on only one part of the regulatory process). 226. HAPs Regulations, supra note 216, at 9327 (detailing costs and benefits of HAP regulations). 2016] doctrine to ignore the objection. 227 This undermines the judicial management policy in the Chenery doctrine. Chenery is also an important part of Chevron deference. 228 Implicit in Chevron deference is the idea that administrative agencies consider all possible statutory interpretations before deciding which to follow. Chenery ensures that government agencies thoroughly analyze unclear statutes before taking action. 229 Administrative agencies cannot advance new reasons during judicial review supporting their statutory construction. 230 Chenery mandates that courts only consider arguments advanced at the administrative level. 231 The Court’s application of Chenery in Michigan v. EPA distorts these principles because the EPA did work through the problems in § 7412(n). 232 The EPA’s final ruling responded to over 900,000 public comments and explained its statutory authority numerous times. 233 Specifically, the ruling stated that the EPA would not consider costs in initially deciding whether to regulate because there was no clear congressional mandate for cost considerations. 234 This was a reasonable argument to make against a statutory interpretation including cost considerations because it repeated the Court’s holding in Whitman. 235 If the point of Chenery in a Chevron case is to ensure that the government agency works through the problems presented by the statute, then the EPA surely succeeded After all, what else could the Agency have done to satisfy the Court? The dissent in Michigan v. EPA accused the majority of unreasonably staring fixedly at only one part of the EPA’s rule. 236 Given the majority’s application of the Chenery doctrine, the criticism that the majority unreasonably limited its judicial review is apt. 237 The Michigan v. EPA majority’s reasoning promoted none of the policies and principles underlying the Chenery doctrine. 238 The majority also ignored many instances where the EPA considered costs in setting its regulations. 239 The Court refused to 227. See id. (explaining cost considerations in HAP regulations); see also Michigan v. EPA, 135 S. Ct. at 2710 (invoking the Chenery doctrine to ignore agency cost considerations). 228. Stack, supra note 124, at 1004–06. 229. Id. at 1005. 230. Chenery, 318 U.S. at 88. 231. Id. 232. See generally HAPs Regulations, supra 216, (reviewing the EPA’s decision in exhaustive detail). 233. Id. at 9310. 234. Id. at 9327. 235. See Whitman, 531 U.S. at 468 (holding that the EPA must have a clear statutory directive to consider costs in CAA rule making). 236. Michigan v. EPA, 135 S. Ct. at 2718 (Kagen, J. dissenting). 237. Id. at 2710 238. Supra Part III.B. 239. HAPs Regulations, supra 216, at 9305. analyze the EPA’s decision in its entirety, and used the Chenery doctrine to justify this failure. 240 In addition to this questionable application of the Chenery doctrine, Michigan v. EPA hinged upon the Court’s interpretation of a CAA statute. 241 It could therefore effect the outcome of legal challenges to the Clean Power Plan — the EPA’s regulation of carbon emissions from power plants under another CAA statute. 242 C. Michigan v. EPA Could Have Substantial Effects on the Clean Power Plan The Clean Power Plan is a central part of the Obama Administration’s environmental policy. 243 Under the new rules, states generally must choose from a variety of options to meet GHG emissions goals on a statewide basis. 244 The EPA issued its final rules for the plan on October 23, 2015, and twenty-four states immediately challenged the plan. 245 These states question the Clean Power Plan’s legality on constitutional and statutory grounds. 246 The Clean Power Plan has serious statutory problems because the House and Senate passed different versions of the statute the EPA relied on in drafting the regulations. 247 These 2016] states may use the Michigan decision as part of its strategy to overturn the Clean Power Plan on major question grounds. 248 1. The Clean Power Plan The Clean Power Plan is the EPA’s and President Obama’s strategy to reduce GHG emissions from coal and oil power plants. 249 First, the EPA establishes aggregate GHG emissions targets from power plants for each state. 250 The regulations contain various ways that states can meet these emissions limits. 251 States can reduce GHG emissions from existing fossil fuel burning power plants, convert coal power plants to natural gas power plants, or implement beyond-the-fence-line programs to reduce GHG emissions overall. 252 For example, assume the EPA mandates that a state must not emit more than 10 units of GHGs, and a state currently emits 12 units of GHGs. The state can then: (1) control GHG emissions from fossil fuel power plants by 2 units; (2) convert the equivalent of 2 units of coal power plants to cleaner burning natural gas power plants; (3) replace 2 units of fossil fuel emissions with zero emissions sources like wind power; or (4) reduce electricity consumption by 2 GHG units. 253 The rules give states the choice to either submit their own plans or have the EPA design a plan for them. 254 In this way, the Clean Power Plan mirrors the federalist system the CAA utilizes to meet NAAQS standards. 255 In a companion rule making proceeding, EPA established emissions standards for new fossil fuel power plants. 256 These standards set emissions limits for any fossil fuel fired power plants a utility builds in the future. 257 The EPA claimed statutory authority to issue the Clean Power Plan under 42 U.S.C. § 7411(d). 258 The statute requires the EPA to establish regulations for any pollutant not controlled by NAAQS standards or that is not regulated under the § 7412 HAP standards. 259 Essentially, the EPA construes 42 U.S.C. § 7411 as providing a safety valve for regulating pollutants otherwise not covered by the NAAQS or HAP programs. 260 In Massachusetts v. EPA, the Court established that the term “any pollutant” under the CAA includes GHG emissions. 261 This decision triggered a requirement to regulate GHGs under § 7411. 262 However, the 1990 CAA Amendments and previous versions of the CAA did not directly envision regulations for GHG emissions. 263 There are no specific titles in the legislation addressing climate change. 264 While one can read § 7411(d) to cover GHG emissions, the EPA did not historically use the section to regulate substantial parts of the economy. 265 Parts of the Clean Power Plan envision changes in state laws too. 266 In light of these 2016] issues, many states bristled at the idea of the EPA forcing them to regulate GHG emissions from fossil fuel power plants. 267 These states are pursuing legal action to strike down the Clean Power Plan, and it’s likely that the Supreme Court will decide the case. 268 Michigan v. EPA Shows the Supreme Court’s Lack of Deference to the EPA’s Decisions To understand how Clean Power Plan challengers might use Michigan v. EPA, one must remember the distinction between within-the-fence-line and beyond-the-fence-line regulations. 269 Within-the-fence-line regulations refers to regulating a power plants’ GHG emissions through equipment and controls inside the power plant. 270 It is the first compliance option for the hypothetical state discussed above. Beyond-the-fence-line regulations are measures like building renewable sources of electricity or installing energy efficient controls for consumers that limit a state’s GHG emissions. 271 These are the third and fourth options for the hypothetical state. The CAA traditionally addressed within-the-fence-line regulations. 272 This departure from within-the-fence-line regulations may lead to a major questions doctrine challenge. Beyond-the-fence-line regulations are similar to the rules at issue FDA v. Brown & Williamson Tobacco Corp. 273 Fossil fuel power generation accounts for a substantial part of the nation’s energy portfolio. 274 The utility industry as a whole is larger than the tobacco industry and both are pervasive parts of the U.S. economy. 275 The FDA in Brown & Williamson Tobacco Corp. used a similar avoidance strategy like the EPA used with the Clean Power Plan to limit their power. 276 In Brown & Williamson Tobacco Corp., the FDA only required package disclosures on cigarettes even when their statutory interpretation suggested they could ban cigarettes outright. 277 The Clean Power Plan employs a similar avoidance strategy utilizing cooperative federalism to let states design GHG emissions reduction plans. 278 However, the EPA’s interpretation of the statutory language implies that the Agency could implement emissions controls directly on fossil fuel power plants. 279 By self-limiting their authority, both agencies imply that Congress really did not intend the agencies’ power to extend as far as the agencies claim. 280 The Court’s holding in Utility Air Regulatory Group may preview the eventual fate of most of the Clean Power Plan. 281 Both the Clean Power Plan and the regulations in Utility Air Regulatory Group are outgrowths of the Massachusetts v. EPA decision. 282 The two cases are similar in that they both involve the EPA using regulatory strategies that are novel compared to the Agency’s 2016 ] traditional actions. 283 This is especially true for beyond-the-fenceline regulations in the Clean Power Plan. 284 Because of its expansive nature, the Court may characterize the Clean Power Plan as the EPA usurping regulatory authority from Congress over an important political question. 285 This would essentially mirror Utility Air Regulatory Group’s main holding. 286 What about within-the-fence-line regulations aimed at reducing GHG emissions from new or modified fossil fuel power plants? This action is more in line with the EPA’s traditional regulatory actions. It may be the point where Michigan v. EPA could most effect the outcome of a Clean Power Plan challenge. The within-the-fence-line emissions limits depend on fossil fuel burning power plants implementing carbon capture and sequestration (CCS) and supercritical pulverized coal (SCPC) technologies. 287 There is a great deal of uncertainty surrounding CCS technology particularly because the power industry has not adopted the technology on a large scale. 288 Installing CCS technology is expensive for power companies as well. 289 If the Court feels that the EPA has not been solicitous enough to the power industry’s compliance costs, it may turn to Michigan v. EPA to knock out this final part of the Clean Power Plan. There are some signs the EPA is adjusting to the Court’s holding in Michigan v. EPA. 290 Both final agency actions establishing the Clean Power Plan and emission controls for new fossil fuel plants include cost considerations. 291 The rulings show adjustment and responses to public comments concerning implementation costs. 292 For example, the EPA enlarged emissions limits for new fossil fuel burning power plants to address a commenter’s concerns about implementation costs. 293 In the Clean Power Plan ruling, the EPA highlights many times that its partnership with states allows for flexibility in implementing emissions goals. 294 Given Michigan v. EPA’s holding, the EPA may have revised its regulations in an effort to accommodate the Court’s current thinking on regulatory costs. Additionally, Michigan v. EPA still leaves open questions concerning so-called “co-benefits.”295 These co-benefits in Michigan v. EPA came from reductions in PM2.5 as opposed to directly from HAP emissions, although science suggests a direct link between HAPs and PM2.5. 296 The Court in Michigan v. EPA focused on the relatively modest accounting of direct benefits compared to the larger amount of co-benefits. 297 This characterization seems to question whether a regulatory scheme is reasonable if its benefits do not result directly enough from the scheme. 298 The Court’s problem with co-benefits echoes many conservative criticisms regarding air pollution standards. 299 The Clean Power Plan’s benefits do not rest on co-benefits to the extent HAP regulations did in Michigan v. EPA. 300 It does include some co-benefits and world-wide benefits from GHG emissions reduction as opposed to benefits arising exclusively from the U.S. 301 Michigan v. EPA’s majority expressed hesitation at wading in to the weeds too much 2016 ] in defining costs and benefits. 302 This may signal that the Court will not give much traction to a direct challenge to the Clean Power Plan on co-benefit grounds. Nevertheless, the co-benefits question is another part of the Michigan v. EPA decision the Court may consider in ruling on the Clean Power Plan. No matter the legal outcome, the Clean Power Plan will impact Michigan v. EPA’s precedential value. As the final rule shows, the new regulations impose both expensive compliance costs and have the potential for large societal benefits. 303 The Court will likely revisit the reasoning of the Michigan v. EPA decision when confronted with these challenges to the Clean Power Plan. How much weight the Court gives the decision will have a significant impact on the Clean Power Plan’s fate. If the Court expands its Michigan v. EPA holding, the Clean Power Plan may be in serious legal trouble. However, if the Court limits Michigan v. EPA to its facts, this may signal that the Clean Power Plan will survive its legal challenges. IV. PROPOSAL: LITIGATION STRATEGIES IN DEFENDING THE CLEAN POWER PLAN With the many problems in the majority’s reasoning, Michigan v. EPA seems to simply stand for the proposition that regulations must be cost effective in order to be reasonable. 304 That idea may have merits as a policy of supporting efficient government. 305 As a legal principle in interpreting the CAA, the position seems fairly inappropriate. However, Michigan v. EPA is binding precedent that will continue to affect environmental and 302. Michigan v. EPA, 135 S. Ct. at 2711. 303. See Clean Power Plan Regulations, supra note 242, at 64679 (listing direct benefits at $2.8 billion in 2020 and total compliance costs at $2.5 billion). 304. See Michigan v. EPA, 135 S. Ct. at 2709 (implying that regulatory decisions are only reasonable when the benefits outweigh the costs). 305. See generally ALAN RANDALL, Benefit-Cost Considerations Should be Decisive When There is Nothing More Important at Stake, in ECONOMICS, ETHICS, AND ENVIRONMENTAL POLICY CONTESTED CHOICES, 53, 54–55 (Daniel W. Bromly & Jouni Paavola eds., 2002) (discussing the normative goals that cost-benefit analysis supports); see also Eric A. Posner, Controlling Agencies with Cost-Benefit Analysis: A Positive Political Theory Perspective, 68 U. CHI. L. REV. 1137, 1138–43 (positing that cost-benefit analysis can be a means for political leaders to exercise oversight over agency decision making); Stephen Clowney, Environmental Ethics and Cost-Benefit Analysis, 18 FORDHAM ENVTL. L. REV. 105, 109 (advocating that cost-benefit analysis promotes thoughtful deliberation and improves environmental group standing in public discussions); Cass R. Sunstein, Cost Benefit Analysis and the Environment 4 (U. Chi. Law & Econ. Working Paper No. 227, Oct. 2004) (claiming that even partial adoption of cost-benefit analysis could dramatically change government agency regulation). administrative law for years to come. 306 The government and other Clean Power Plan defenders must address Michigan v. EPA in order to successfully vindicate the Clean Power Plan. How should the Clean Power Plan defenders adjust their litigation strategy to accommodate the Court’s Michigan v. EPA decision? Michigan v. EPA should highlight for the Solicitor General, the EPA lawyers, and others defending the Clean Power Plan the Court’s focus on the major questions doctrine in CAA cases. While Michigan v. EPA is not a case directly addressing GHG emissions, it shows the Court is hesitant to grant the EPA broad powers under the CAA to fight climate change. 307 If the Court shows skepticism to the EPA regulations dealing with HAPs, Clean Power Plan defenders can be sure that the Court views the Plan with skepticism as well. 308 Clean Power Plan defenders should be aware that they face serious challenges in showing that the Plan does not violate the major questions doctrine. 309 From these realizations, there are ways that defenders of the Clean Power Plan can adjust their litigation strategy to downplay the Plan’s impact on the energy market. This strategy can defeat a major questions challenge, which is the most difficult obstacle the defenders face in litigating the case. Specifically, Clean Power Plan supporters should set three goals for their litigation strategy in light of the Michigan v. EPA decision. First, they must invest in the major questions challenge. Second, the defenders must focus on existing energy market conditions to show that the Clean Power Plan does not change major trends in the industry. Third, the Court must understand the meaning and scope of the Clean Power Plan’s benefits. While these goals do not form a complete litigation strategy, they are three areas where the Michigan v. EPA decision can most inform a defense of the Clean Power Plan. 306. See Cass R. Sunstein, Thanks, Justice Scalia, for the Cost-Benefit State, BLOOMBERG (July 7, 2015, 9:00 AM), www.bloombergview.com/ articles/2015 -07-07/thanks-justice-scalia-for-the-cost-benefit-state (praising the Michigan decision for bringing more cost-benefit analysis to government regulation); but cf. Andrew M. Grossmam, Michigan v. EPA: A Mandate for Agencies to Consider Costs, 2014–2015 CATO SUP. CT. REV. 281, 302 (2015) (questioning whether the Court will overturn many other government regulations on the same grounds as they did in Michigan v. EPA). 307. See Michigan v. EPA, 135 S. Ct. at 2708 (noting that Chevron deference does not extend to statutory gerrymandering); see also Util. Air Regulatory Grp., 134 S. Ct. at 2444 (striking down CAA Title V and PSD permitting requirements that would apply to millions of small sources). 308. See Michigan v. EPA, 135 S. Ct. at 2708 (express skepticism that regulations that are not cost efficient can ever be reasonable under Chevron). 309. See Brown & Williamson Tobacco Corp., 529 U.S. at 160 (outlining the major questions doctrine). 2016] A. Invest in the Major Questions Doctrine Constitutional arguments against the Clean Power Plan are likely to fail. 310 Clean Power Plan challengers initially raised the Fifth Amendment takings clause and the anti-commandeering principles as reasons for rejecting the plan. 311 Generally, the Clean Power Plan is not a regulatory taking because it would not render coal or oil power plants completely useless to the plant owners. 312 Because the Clean Power Plan leaves open many productive uses for coal and oil power plants, it meets the Penn Station factors that govern regulatory takings. 313 The Clean Power Plan also does not commandeer state legislative authority because the Plan includes a federal option for non-participating states. 314 This option is a legitimate exercise of federal power, and therefore does not violate the anti-commandeering principle. 315 The major questions doctrine, then, is likely to be the strongest challenge to the Clean Power Plan. While in Michigan v. EPA the government had the advantage of addressing a narrow question, this may not be the case for the Clean Power Plan defenders. 316 The Court’s order in Michigan v. EPA to grant certiorari addressed the narrow question of whether it was reasonable for the EPA to disregard costs in initially deciding to regulate coal and oil power plants under § 7412(n). 317 The initial documents from the Clean Power Plan challengers do not give much hope for a narrow certiorari ruling as the challengers are raising both statutory and constitutional arguments. 318 Some prior D.C. Circuit case law suggests that the Court could narrow the issues in this case on appeal. 319 Other parties raised the anti-commandeering argument to challenge parts of the CAA, but the D.C. Circuit completely rejected the argument. 320 This suggests that it is possible that the Supreme Court would not consider the anti-commandeering question since this argument does not have enough traction to move past the lower court. It would ultimately be up to the Supreme Court, however, to define the issues on appeal when deciding whether to grant certiorari. There is no guarantee that the Court will narrow the issues on appeal. Since Clean Power Plan defenders do not know the scope of any challenge, they need to prioritize their efforts in defending the Plan. The major questions doctrine requires Clean Power Plan challengers to develop a complex record. A baseline issue in any major questions challenge is the current character of the industry the government seeks to regulate. 321 Clean Power Plan defenders then must develop a record to support their view of the energy market as it currently exists. 322 Developing this record will require that Clean Power Plan defenders introduce factual evidence detailing the conditions of the energy industry in the United States. 323 The defenders also must show that the Clean Power Plan will have a minimum impact on the industry once implemented. 324 Prioritizing issues and arguments is a fundamental part of litigation. 325 In this case, it is clear that the major questions doctrine will be an important part of the Clean 318. See Petition for Review at 2, supra note 245, (raising both statutory and constitutional challenges to the Clean Power Plan). 319. See Texas v. EPA, 726 F.3d 180, 196–97 (D.C. Cir. 2013) (rejecting a challenge to a PSD program for vehicle GHG emissions because the EPA can administer the program itself without violating the anti-commandeering principle). 320. Id. 321. See Brown & Williamson Tobacco Corp., 529 U.S. at 160 (holding that the major questions doctrine challenges agency actions when those actions transform a substantial part of the national economy). 322. See Jonas Monast and David Hoppock, Designing CO2 Performance Standards for a Transitioning Electricity Sector, 44 ENVTL. L. REP. NEWS & ANALYSIS 11068, 11069–11072 (Dec. 2014) (characterizing the energy market as increasing dependence on natural gas while decreasing dependence on coal). 323. Id. 324. Id. at 11069–74 (showing market trends moving away from coal electricity generation). 325. See generally Managing Litigation Checklist, PRACTICAL LAW (Feb. 15, 2015), www.americanbar.org/content/dam/aba/administrative/l itigation/mate rials/2015 _corporate_counselcleseminar/Materials/1p_3_managing_litigation.a uthcheckdam.pdf (describing issue assessment as an important part of prelitigation strategy). 2016] Power Plan litigation. 326 The Plan’s defenders then need to devote substantial time to developing the factual record in order to support their opposition to the major questions challenge. Constitutional challenges to the Clean Power Plan are contrary to prevailing Supreme Court precedent. 327 The major questions challenge to the Clean Power Plan seems viable and defending the Plan from the challenge will require a detailed case record. 328 Therefore, a fundamental part of the Clean Power Plan defense litigation strategy should be to invest time in the major questions challenge. This decision directs resources and energy toward the most difficult challenge the Clean Power Plan must overcome to win the Court’s approval. 329 B. Focus on Existing Energy Market Conditions Once Clean Power Plan defenders develop the record to give an accurate view of the energy industry, they must minimize the Plan’s impact on industry. Specifically, the defenders need to make convincing arguments that the Clean Power Plan is not an attack on the coal industry. The general trend in the energy market is toward greater dependence on natural gas. 330 Advancements in extracting shale gas in the United States made natural gas the cheapest form of energy, regardless of the Clean Power Plan. 331 This is an important point that the Court must understand. Coal companies are likely to highlight compliance costs and market factors in challenging the Clean Power Plan. 332 Indeed, coal power plants are closing around the country, and coal fired electricity is losing market share. 333 The fact that the electricity market will likely see little growth in demand in the near future compounds these competitive pressures. 334 Coal companies, somewhat validly, see environmental regulations as a burdensome forced investment. 335 Many coal companies believe the regulations force either substantial investment in equipment upgrades without guarantees of high profits or shutting down altogether. 336 The onerous regulatory costs combine with low market growth to create uncertainty in the coal companies’ long-term viability. 337 Michigan v. EPA shows that the Court has sympathy towards coal industry compliance costs. 338 The Court’s holding in the case mandates that the EPA consider compliance costs for regulated industries. 339 This mandate does not have a foundation in CAA case law and goes against the prevailing trend in CAA cases. 340 It would also provide extra protection to coal companies against future costly regulations. 341 Michigan v. EPA’s oral arguments shows that at least one of the conservative justices — Justice Alito — was sympathetic to industry costs. 342 Justice Alito seemed to believe that § 7412(n)’s legislative his tory implied that Congress 2016 ] intended to separate coal and oil power plants from the other HAP sources. 343 Chief Justice Roberts also characterized the disparity between direct benefits and compliance costs as a “red flag” during oral arguments. 344 He implied that in some situations cost considerations can defeat regulatory action regardless of the statutory language at issue. 345 Taken together, these remarks show that the Court’s conservative justices are hesitant to impose large costs on the coal industry without clear statutory authority. 346 In this environment of solicitous attention toward compliance costs, Clean Power Plan defenders need to minimize the impact of the Plan on coal companies. They also need to maximize the impact of general market trends on the coal industry. For example, natural gas generation is the least costly form of new electricity generation when leveling costs. 347 This competitive pressure on coal exists outside of the Clean Power Plan. 348 New coal generation was unlikely in the future without the Clean Power Plan for simple economic reasons. 349 Additionally, futures markets project low price increases for raw natural gas. 350 Even if natural gas prices were to rise, they would have to almost double in price to make new coal generation competitive with natural gas. 351 These forces exist outside of the Clean Power Plan. 352 Essentially, fracking is destroying the coal industry, not the Clean Power Plan or the EPA. 353 The Court must understand this for the Clean Power Plan to prevail. 343. Id. 344. See id. at 62–64 (Chief Justice Roberts suggesting that the disproportionate relationship between direct and co-benefits raises legitimacy issues in HAP regulations). 345. Id. Chief Justice Roberts also connects this point with a suggestion that the EPA may have used HAP regulations in order to impose stricter requirements for PM2.5 then the Agency could otherwise. Id. at 64. 346. Id. at 46–47, 62–64. 347. See Monast and Hoppock, supra note 322, at 11071 (showing total system levelized costs for natural gas generation at $67.1 per Megawatt Hour (MWh) while coal generation stands at $100.1 MWh). 348. Id. The figures come from the U.S. Energy Information Administration’s 2013 Annual Energy Outlook Report. Id.; U.S. ENERGY INFO. ADMIN., ANNUAL ENERGY OUTLOOK 2013 WITH PROJECTIONS TO 2040 (Apr., 2013), www.eia.gov/forecasts/aeo/p df/0383%282013%29.pdf. 349. See Monast and Hoppock, supra note 322, at 11070 (explaining that increase in cheap natural gas limits future demand for coal). 350. See id. at 11071 (projecting level natural gas prices despite the possibility for price shocks in regional areas). 351. See id. (noting that natural gas prices would have to almost double for natural gas to achieve a levelized cost of new generation per MWh with coal). 352. Id. 353. See id. (attributing the drop in natural gas prices to shale extraction); see also New Source Greenhouse Gas Standards, supra note 256, at 64512 (detailing decreased demand for coal production in electricity sector). There are also ways that the Clean Power Plan may help the coal industry. Investing in energy efficiency is one strategy states can choose to comply with the Clean Power Plan. 354 While increased energy efficiency lowers overall demand for electricity, it also lowers demand for new electricity generation. 355 This reduces reliance on natural gas and allows power companies to invest capital in their existing power generation fleet which includes coal power plants. 356 Stabilizing electricity demand also incentivizes state utilities to maintain their current mix of power generation systems. 357 This mix includes coal power generation. 358 Energy efficiency investments are then in coal companies’ interests because they stabilize the energy market overall. 359 Some states are exploring energy efficiency as a compliance strategy for the Clean Power Plan. 360 Making this point clear to the Court is important because it refutes a threshold question in a major questions challenge. 361 If a government action parallels an already existing change in an industry, that action cannot be subject to a major questions challenge. 362 A threshold issue in the major questions challenge is that the government action causes a major change in a given industry. 363 If there is no government action catalyzing a change in industry, logically there is no major questions challenge. 364 C. Define Co-Benefits Additionally, Clean Power Plan defenders must address the co-benefits issue raised in Michigan v. EPA. 365 Michigan v. EPA’s 354. See Clean Power Plan Regulations, supra note 242, at 64665 (including energy efficiency programs as a compliance strategy for the Clean Power Plan). 355. Monast and Hoppock, supra note 322, at 11077. 356. Id. 357. Id. 358. See U.S. ENERGY INFO. ADMIN., supra note 274 (listing coal as accounting for 39% of total energy generation in the U.S. in 2013). 359. See Monast and Hoppock, supra note 322, at 11077 (noting the benefits of energy efficiency actors within the energy market). 360. See Rebecca Stanfield, Illinois’s Climate plan can also be its plan for economic growth, SWITCHBOARD NAT. RESOURCE DEF. COUNCIL STAFF BLOG (Sept. 22, 2014), http://switchboard.nrdc.org/blogs/rstanfield /illinoiss_climate_solutions_ca.html (advocating that Illinois use mostly energy efficiency strategies to comply with the Clean Power Plan). 361. See Brown & Williamson Tobacco Corp., 529 U.S. at 160 (defining major questions challenge as when an agency’s action dramatically changes a regulated industry). 362. Id. 363. Id. 364. Id. 365. See Michigan v. EPA, 135 S. Ct. at 2711 (addressing the co-benefits question). 2016] holding shows the importance of the co-benefits issue. 366 If regulations must be cost efficient in order to be reasonable, what qualifies as a benefit is a salient issue. 367 Each side in litigation will debate the regulation’s benefits under this principle to see if the regulation is in fact efficient. This is reason enough for Clean Power Plan defenders to devote resource in their litigation strategy to defining and explaining benefits and co-benefits to the Court. The oral arguments from Michigan v. EPA also reveal a mistake in the government’s responses to co-benefits questions that the Clean Power Plan litigants should avoid repeating. 368 In particular, Justice Roberts asked the Solicitor General to explain why there were a disparate proportion of direct benefits from mercury regulation to co-benefits. 369 The Solicitor General responded that the EPA did in fact list the other direct benefits from the regulations. 370 Those benefits, however, were too difficult to quantify, so the EPA did not attempt to quantify the benefits. 371 This answer did not address the Chief Justice’s fundamental concern, and may have fueled the majority’s skepticism of the HAP regulations. 372 If these listed benefits are difficult to quantify, then it seems more likely that the benefits do not exist making the regulation appear less reasonable. This was both a logical fallacy, since the quantifiable nature of benefits does not determine whether the benefits exist, and ignores the connection between HAPs and PM2.5. 373 The Solicitor General missed an opportunity to show that the direct benefits of HAP regulations are actually more substantial than the $4-6 million figure cited in the majority’s opinion. This point may have rendered the Michigan v. EPA Court’s opinion moot. If in fact HAP regulations were cost effective, there would be no point in the Court’s decision. 374 The Clean Power Plan’s cost-benefit analysis includes many other potential pitfalls like the one the Solicitor General encountered above. 375 First, the direct climate benefits in the analysis are “global” climate benefits. 376 This means that it 366. Id. 367. See id. at 2707 (showing skepticism to regulations that do not pass a cost-benefit analysis). 368. See Transcript of Oral Argument, supra note 342, at 64 (featuring Solicitor General’s response to a question about co-benefits). 369. Id. 370. Id. 371. Id. 372. Id.; see also Michigan v. EPA, 135 S. Ct. at 2707 (expressing skepticism that regulations with small direct benefits could be reasonable). 373. See Hodan and Bernard, supra note 296 (explaining the connection between HAPs and PM2.5). 374. See Michigan v. EPA, 135 S. Ct. at 2707 (questioning whether inefficient regulations are appropriate). 375. See Clean Power Plan Regulations, supra note 242, at 64679–82 (outlining costs and benefits of the Clean Power Plan). 376. Id. at 64681. accounts for climate benefits in other countries, which the Court may find suspicious. 377 However, there are certainly benefits in mitigating climate change that would affect the United States, and the government should take care to explain these benefits to the Court. 378 Second, the Clean Power Plan cost-benefit analysis includes co-benefits from reduction in PM2.5 and ozone emissions. 379 The government needs to defend these benefits. This includes explaining why PM2.5 is not more properly addressed in other CAA statutes and explaining that PM2.5 reduction produces health benefits no matter the source. 380 Third, Clean Power Plan benefits grow almost exponentially in the analysis. 381 For example, in one model climate benefits increase from $3.3 billion in 2020 to $20 billion in 2030. 382 The government must advocate for a longer view of cost-benefit analysis because with time the Clean Power Plan benefits far outweigh the costs. 383 This comprehensive view of Clean Power Plan benefits will help defenders analogize the case with the Massachusetts v. EPA decision. In Massachusetts v. EPA, the state appellants were able to impress upon the Court the severity of refusing to address climate change. 384 The opinion notes rising sea levels and other adverse weather effects as specific harms facing states without federal intervention under the CAA. 385 However, Utility Air Regulatory Group and Michigan v. EPA emphasize the burden CAA regulations could have on market actors. 386 By explaining Clean Power Plan benefits thoroughly, its defenders can introduce 377. Id. 378. See id. at 64679–82 (detailing climate and health benefits); see also U.S. ENVTL. PROT. AGENCY, FACT SHEET: CLEAN POWER PLAN BENEFITS (2014 ), www.epa.gov/sites/production/files/2014-05/documents/20140602fsbenefits.pdf (asserting that the Clean Power Plan could prevent up to 6,400 premature deaths and 150,000 asthma attacks in children). 379. See Clean Power Plan Regulations, supra note 242, at 64680 (listing benefits from PM2.5 and ozone reduction). 380. See Transcript of Oral Argument, supra note 342, at 63 (Chief Justice Roberts questioning why the EPA can claim benefits from PM2.5 when PM2.5 is regulated under other CAA provisions); see also World Health Organization, Health Effects of Particulate Matter 6 (2013), www.euro.who.int/__data/assets /pdf_file/006/189051/Health-effects-of-particulate-matter-final-Eng.pdf (explaining the effect PM2.5 has on people with pre-existing heart conditions and the elderly). 381. See Clean Power Plan Regulations, supra note 242, at 64679–82 (showing large increases in Clean Power Plan benefits over time). 382. Id. at 64681. 383. Id. 384. See Massachusetts v. EPA, 549 U.S. at 521 (describing the risks of rising sea levels and water scarcity from climate change). 385. Id. 386. See Util. Air Regulatory Grp., 134 S. Ct. 2444 (nothing that the EPA’s actions would extend its regulatory authority to many small businesses); see also Michigan v. EPA, 135 S. Ct. 2708 (implying that regulatory actions that do not consider costs are unreasonable). 2016] the same scenarios where the US does nothing about climate change that motivated the Massachusetts v. EPA court. Without the Clean Power Plan, it will be difficult for the US to meet its climate change goals under the 2015 Paris Agreements and thereby maintain the international credibility of the Paris Agreements. 387 The same disasters that motivated the Court to find carbon an air pollutant under the CAA in Massachusetts v. EPA are possible without the Clean Power Plan. 388 This shift in focus may persuade a majority of the Court to return to the concerns about GHG emissions that motivated the Massachusetts v. EPA decision. CONCLUSION The Michigan v. EPA decision presents many challenges and opportunities. With its misapprehension of case law and statutory context, the Court’s reasoning in the decision is suspect. 389 The Court also employed a novel application of the Chenery doctrine to limit the scope of its judicial review. 390 This application distorts the benefits of the Chenery doctrine in the non-delegation framework. 391 Finally, Michigan v. EPA could have a substantial impact on the fate of the Clean Power Plan. 392 Clean Power Plan 387. See Eric Anthony DeBellis, In Defense of the Clean Power Plan: Why Greenhouse Gas Regulations Under Clean Air Act Section 111(D) Need Not, and Should Not, Stop at the Fenceline, 42 ECOLOGY L.Q. 235, 260 (2015) (explaining that striking down the Clean Power Plan would prevent the US from meeting the 2015 Paris Agreement) ; Ben Adler, Will One of These Clowns Destroy the Paris Climate Deal?, MOTHER JONES (Dec. 18, 2015, 6:00 AM), www.motherjones.com/environment/2015 /12/republicans-paris-climate-change -deal-cop21 (predicting that any domestic reversal of the Clean Power Plan could kill the Paris Agreement). But cf. Fiona Harvey and Suzanne Goldenberg, US Clean Power Plan Setback ‘Will Not Affect Paris Climate Change Deal, THE GUARDIAN (Feb. 10, 2016 12:27 PM), www.theguardian.com/environment/2016/feb/10/us-clean-power-plan-setbackwill-not-affect-paris-climate-change-deal (reporting that European nations and the United States remained faithful to the Paris Agreement despite Supreme Court stay of the Clean Power Plan). The Paris Agreement depends on nations setting voluntary emissions reductions goals, and US leadership in reductions is critical to maintain the Agreement’s international credibility. Jorge E. Vinuales, The Paris Climate Agreement: An Initial Examination 5 (Cambridge Ctr. for Env’t, Energy, and Nat. Res., Working Paper No. 6, December 15, 2015) . 388. Massachusetts v. EPA, 549 U.S. at 521. 389. See discussion supra Part III. A (explaining problems with the Michigan v. EPA decision). 390. See discussion supra Part III. B (criticizing the Court’s application of the Chenery doctrine in Michigan v. EPA). 391. Id. 392. See discussion supra Part III. C (predicting the effect of the Michigan v. EPA decision on the Clean Power Plan). challengers could use the decision alongside other statutory attacks on the EPA’s plan to reduce GHG emissions. 393 In anticipation of future Clean Power Plan litigation, the Michigan v. EPA decision reveals three goals Clean Power Plan defenders should set for themselves. 394 First, the defenders must invest in the major questions doctrine. 395 Second, Clean Power Plan defenders need to focus on existing energy market conditions. 396 Third, the defenders need to define the Plan’s cost and benefits. 397 While these goals do not form a comprehensive litigation strategy, they are important lessons that Clean Power Plan defenders need to take from the Michigan v. EPA case. 398 These goals will help defend the Clean Power Plan from a major questions challenge. 399 While Michigan v. EPA does not address GHG emissions, the case fits well within a family of cases defining the scope of the CAA and GHG regulations. 400 These cases sometimes give deference to the EPA in regulating GHG emissions, while other times limit the Agency’s authority. 401 If Clean Power Plan defenders can see the flaws in the Michigan v. EPA decision and understand the case’s implication for their litigation strategy, they are more likely to succeed in their task. 402 Ignoring the case will increase the likelihood that the Clean Power Plan will fail. Michigan v. EPA represents a unique data point in the Court’s thinking concerning the scope of the CAA. 403 Hopefully, environmental advocates will adjust to the Court’s decision and use it to further their efforts to tailor CAA provisions to fight climate change. 393. Id. 394. See discussion supra Part IV. (describing potential litigation strategies for Clean Power Plan defenders). 395. Supra discussion Part IV. A. 396. Supra discussion Part IV. B. 397. Supra discussion Part IV. C. 398. Supra discussion Part IV. 399. Id. 400. See Massachusetts v. EPA, 549 U.S. at 532 (finding that GHGs fit under the CAA definition of air pollutant); see also Util. Air Regulatory Grp., 134 S. Ct. at 2444–50 (denying the EPA authority to regulate GHG emissions under Title V and PSD programs generally but allowing the EPA to regulate GHG emissions from sources already coved under Title V and the PSD program); see also EME Homer City Generation, L.P., 134 S. Ct. at 1606–07 (allowing the EPA to consider costs in implementing the CAA’s Good Neighbor Provision). 401. Compare Massachusetts v. EPA, 549 U.S. at 532 (holding that GHGs are an air pollutant under the CAA), with Util. Air Regulatory Grp., 134 S. Ct. at 2444 (limiting the EPA’s authority to regulate GHG emissions under Title V and the PSD program). 402. See discussion supra Part IV. 403. See discussion supra Part III. A. I. INTRODUCTION...................................................................1257 AT ISSUE IN MICHIGAN V. EPA............................................1261 A. Structure and Policy of the Clean Air Act 1970- 1990 ..1261 B. The 1990 CAA Amendments .......................................1264 Power Plants at Issue in Michigan v . EPA ..................1267 D. The Court's Reasoning in Michigan v . EPA .................1268 DIFFERENT LEVELS............................................................1270 A. Problems with the Court's Michigan v . EPA Decision..1270 1 . The EPA Considered Costs at Other Points in the Rule Making Process ............................................ 1271 2 . Michigan v. EPA Fails to Give Deference to the Prevailing Trend in Chevron Cases.......................1273 the Chenery Doctrine.................................................. 1277 1 . Chenery Defined................................................... 1277 2. The Court's Use of Chenery Distorts the Limits Judicial Review .........................................1278 the Clean Power Plan ................................................. 1282 1. The Clean Power Plan .......................................... 1283 2. Michigan v. EPA Shows the Supreme Court's Lack of Deference to the EPA's Decisions ..............1285 CLEAN POWER PLAN ..........................................................1289 A. Invest in the Major Questions Doctrine.......................1291 B. Focus on Existing Energy Market Conditions .............1293 C. Define Co-Benefits ......................................................1296 V. CONCLUSION .....................................................................1299 18 . See GARY C. BRYNER , BLUE SKIES , GREEN POLITICS : THE CLEAN AIR ACT OF 1990 , 81 - 115 ( 1993 ) (considering environmental problems that lead to Critique: An Overview of the Clean Air Act Amendments of 1990 , 21 ENVTL. L. 1721 , 1733 - 43 ( 1991 ) (focusing specifically on the problems leading to the 1990 CAA Amendments ) . 19 . See BRYNER , supra note 18, at 79-100 ( exploring changes to the CAA) . 20. BRYNER, supra note 18, at 81. 21. Id. 22. Air Quality Act of 1967 , Pub. L. No. 90 - 148 , 81 Stat. 485 ( 1967 ). 23. BRYNER, supra note 18, at 81. The Air Quality Act also contained developing air pollution control plans . See ROY S. BELDEN, CLEAN AIR ACT , 6 (2d ed. 2011 ) (listing Air Quality Act provisions ). 24. BRYNER, supra note 18 , at 81 . 25. See id. (discussing Air Quality Act); see also BELDEN , supra note 23 , at 6 (analyzing the advantages and drawbacks of The Air Quality Act of 1967 ). 40 . Id. at 86-91, 173 - 74 . See also id. at 176 ( describing stalled rulemaking for a 25 percent recycling goal in December 1990 even though President George H.W. Bush supported the goal in the 1988 presidential campaign ). 41 . See OFFICE OF MANAGEMENT AND BUDGET , REPORT TO CONGRESS ON THE COSTS AND BENEFITS OF FEDERAL REGULATIONS ( 1997 ), www.whitehouse. gov/omb/inforeg_chap1 (examining changes in the Executive Office under administration goals . BRYNER, supra note 18, at 173. 42. Id. at 29-32 , 174 - 76 . 43 . Id. at 117 . 44. Id . (detailing story where the new EPA administrator William Director David Stockman) . 45 . Id . 46 . Waxman, supra note 18, at 1723- 34 . 47 . Id . 48 . Id. at 1728-29 ( analyzing acid rain and hazardous air pollutants controls introduced in the House). 49. BRYNER, supra note 18, at 92. 50. Id. 51. Id. at 91-93 (explaining congressional gridlock in the late 1980s) . 52 . See id. at 94 . (describing election of CAA supporter President George H.W. Bush and Senator George Mitchell). 53 . Waxman, supra note 18, at 1723-34 ( noting especially the effect of the Bhopal accident) . 54 . See BRYNER , supra note 18, at 165-84 (considering the significance of the 1990 CAA Amendments) . 55 . See id. at 62 (discussing Superfund legislation) . 56. Id . 57 . Id . (showing that businesses released about 2.7 billion pounds of pollutants leading to between 300 and 1500 annual cancer fatalities) . 58. Id. at 74 . 59. See Waxman, supra note 18 , at 1729 (detailing the Bhopal accident ). Bhopal , India released 60 , 000 pounds of methyl isocyanate killing over 2,500 people and leaving 100 , 000 with permanent disabilities . Id . The accident The Bhopal Disaster: How It Happened , N.Y. TIMES , Jan. 28 , 1985 , www.nytimes.com/ 1985 /01/28/world/the-bhopal -disaster-how-it-happened .html 270 , 000 barrels of oil into Prince William Sound, Alaska after it ran aground . See Philip Sahecoff , Largest U.S. Tanker Spill Spews 270 ,000 Barrels of Oil Off Alaska , N.Y. TIMES , Mar. 25 , 1988 , www.nytimes.com/learn ing/general/onthisday/big/0324.html (describing the effects of the Exxon Valdez oil spill); see also Waxman , supra note 18 , at 1729 , 1735 (discussing the Exxon Valdez oil spill) . 60 . See BRYNER , supra note 18, at 92-94 ( describing events leading to the CAA) . 61 . See id. at 93-110 (recounting the 1988 Presidential election and the resignation of Robert Byrd from Senate Democratic leadership) . 62. Id. at 94 . 63. Id . See also Videotape: The Clean Air Act of 1990 Featuring Robert Grady , Roger Porter , and Alan K. Simpson , C-SPAN ( Apr . 4, 2014 ), www.c- span.org/video/?318654- 3 /clean-air-act-1990 [hereinafter Videotape discussion] issues in Boston, Massachusetts). 64 . BRYNER, supra note 18, at 94- 97 . 65 . Id. at 97-100 ( listing several points in the legislative process where of his bill); see also Waxman , supra note 18 , at 1736-39 (discussing veto threats) . 66 . See BRYNER , supra note 18, at 94 (detailing George Mitchell's assent to Senate leadership) . 67. Id . 68 . Id .; Waxman, supra note 18, at 1727 . 69. BRYNER, supra note 18, at 105 . 70. Id. at 80 ( Senator Mitchell had a long standing commitment to the in 1987-1988). 71. See id. 91- 115 (explaining the compromises that lead to the 1990 CAA) . 72 . Waxman, supra note 18, at 1737 ( including a story of detailed became the framework for 1990 CAA Amendments) . Congressman Dingell emissions and felt the auto industry had done enough to protect the 85 . BRYNER, supra note 18, at 117 . 86. U.S. ENVTL. PROT. AGENCY, THE CLEAN AIR ACT IN A NUTSHELL: HOW IT WORKS ( 2013 ), www2 .epa.gov/sites/production/files/2015-05/documents/ caa_nutshell.pdf. 87 . 42 U.S.C. § 112 (d) ( 2016 ); BRYNER, supra note 18, at 125- 26 . 88. BRYNER, supra note 18, at 124 . 89. Michigan v. EPA, 135 S. Ct. at 2705 . 90. 42 U.S.C. § 7412(n)(1)(A) ( 2016 ). 91 . Id . 92 . Congressional Research Service, A Legislative History of the Clean Air Act Amendments of 1990 , 1414 - 16 ( 1993 ), http://babel.hathitrust.org/cgi/ pt?id=uc1.$b561714;view=1up;seq=1436 [hereinafter Legislative History]. 93. Id. at 1416 . The substances were arsenic, beryllium, cadmium, hexavalent chromium, formaldehyde, and radionuclides . Id . 94 . White Stallion Energy Ctr ., LLC v. EPA , 748 F.3d 1222 , 1264 107 . Id. at 2707- 11 . 108 . Id. at 2708 (describing 42 U.S.C. § 7412(n)(1)(A)) . 109 . Id . 110 . Whitman , 531 U.S. at 457 . 111. Michigan v. EPA, 135 S. Ct. at 2709 (analyzing Whitman) . 112 . Whitman , 531 U.S. at 467 ( citing Union Elec . Co. and General Motors Corp. v. United States , 496 U.S. 530 ( 1990 ) in support of its holding); Michigan v . EPA 135 S. Ct. at 2707 . 113. Michigan v. EPA, 135 S. Ct. at 2709 . 114. Id . 115 . Id . 116 . Id . 117 . Id . The Court included another analogy in this section drawing from Id . Just because 42 U.S.C. § 7412(n)(1) excludes costs while 42 U .S.C. § 7412(n)(2) includes cost considerations does not mean the Court can read out costs from 42 U.S.C. § 7412(n)(1) . Id. 118. Id . 119 . See generally Wolff, supra note 8 (detailing industry compliance with HAP regulations); see also Michigan v . EPA , 135 S. Ct . at 2706 (listing the Energy Ctr ., LLC 748 F. 3d at 1233 (discussing the industry's challenge at the appellate level) . 120. White Stallion Energy Ctr., LLC 748 F.3d at 1233 (challenging the Circuit) . 121 . Michigan v. EPA , 135 S. Ct . at 2706 (challenging the regulations at the Supreme Court) . 122 . Michigan v. EPA , 135 S. Ct . at 2707-11 (reviewing statutory context and the Whitman precedent) . 123. Id. at 2710-11 . 124 . See Kevin M. Stack , The Constitutional Foundations of Chenery , 116 YALE L.J . 952 , 992 - 1005 ( 2007 ) (analyzing how Chenery promotes the non- judicial manageability) . 125 . See Carlson & Herzog, supra note 12, at 28-35 (framing the ultimate Util . Air Regulatory Group or EME Homer ruling) . 126 . See 42 U.S.C. § 7412 (d) ( 2016 ) (describing the different ways to regulation) . 127. See Whitman , 531 U.S. at 467-68 ( refusing to find implicit cost consider costs); Union Elec . Co., 427 U.S. at 256 ( declining to find that EME Homer City Generation , L.P. , 134 S. Ct . at 1606-07 (allowing the EPA to 146 . Michigan v. EPA, 135 S. Ct. at 2707 . 147. Chevron , 467 U.S. at 840. Chevron was concerned with the EPA construction of the statute . Id. at 845 ( holding that Congress did have any specific intention on the applicability of the bubble concept ). 148 . Michigan v. EPA, 135 S. Ct. at 2707 . 149. Id . 150 . See Union Elec. Co., 427 U.S. at 488 ( holding that the EPA need not consider costs in its NAAQS program); see also Whitman , 531 U.S. at 469 “requisite to protect the public health” ). 151 . Union Elec . Co., 427 U.S. at 256 . 152. Id. at 488 . 153. Whitman , 531 U.S. at 471 . 154. Id. at 468 . 155. Id. at 469; Michigan v . EPA, 135 S. Ct. at 2709 . 156. Brown & Williamson Tobacco Corp., 529 U.S. at 159- 60 ; MCI Telecomm. Corp. v. Am. Tel. & Tel . Co., 512 U.S. 218 , 231 ( 1994 ) (holding that Regulatory Grp ., 134 S. Ct . at 2444 (applying Brown & Williamson to strike permitting) . 157 . Brown & Williamson Tobacco Corp., 529 U.S. at 159-60 (holding that Drug , and Cosmetic Act). 158. Id. 159. Id. at 160 . 160. Id . 161 . See id. (expressing skepticism that Congress could delegate power to FDA through a cryptic statutory construction) . 162. See Whitman , 531 U.S. at 468 ( analogizing that Congress does not hide elephants in mouse holes) . 163 . Brown & Williamson Tobacco Corp, 529 U.S. at 160 . 164. Util . Air Regulatory Grp., 134 S. Ct. at 2444. 165. Id. at 2434. 166. Id. at 2435 . 167. Id. at 2444; see also BRYNER, supra note 18 , at 123-28 (providing an GHG emissions) . 168 . Util . Air Regulatory Grp., 134 S. Ct. at 2436. 169. Id. at 2437. 170. Id. at 2444 . 171. Id . 172 . 42 U.S.C. § 7412(n)(1) ( 2016 ) ; see also Michigan v . EPA , 135 S. Ct . at 2709 , 2714 (showing that both the majority and dissent in Michigan v . EPA HAP regulations); New Jersey , 517 F. 3d at 582 (implying that Congress meant to regulate HAPs under § 7412(n)(1)) . 173 . See 42 U.S.C. § 7412(n)(1) ( 2016 ) (showing that HAP regulations of the statute and not the section); see also Legislative History , supra note 92 , at 1415 (detailing that Congress subjected coal and oil power plants to extensive regulations under the CAA acid rain provisions). 174. See Wolff, supra note 8 (proving that the coal and oil industry has also Emission Control Companies as Amici Curiae, supra note 8 , at 19- 20 regulations) . 175. See Legislative History, supra note 92 , at 1415 (detailing CAA acid rain controls); see also Wolff, supra note 8 (asserting industry compliance with HAP regulations) . 176 . Util . Air Regulatory Grp., 134 S. Ct . at 2449 (characterizing GHG jurisdiction over already-regulated companies) . 177. Id . 178 . Id .; see also BRYNER, supra note 18, at 126-27 , 146 - 47 (describing chemical contributing to acid rain); Legislative History , supra note 92 , at 1416- 17 ( recording the Congressional debate concerning HAP regulations for coal and oil power plants) . 207. Hananel, supra note 7 . 208. See Phillip A. Wallach , Michigan v. EPA: Competing Conceptions of Deference Due to Administrative Agencies, BROOKING INST. (Oct. 23 , 2015 , 2 : 37 PM), www .brookings.edu/blogs/fixgov/posts/2015/06/29-michigan -v-epa-admini the EPA's Crackdown on Mercury Pollution , VOX (Oct. 23 , 2015 , 2 :38 PM), www.vox.com/ 2015 /6/29/8861167/supreme -court-EPA-ruling-mercury-coal remain in force) . 209 . See Friendly, supra note 195 , at 210 ( explaining that it is is not in question) . 210 . See Wallach, supra note 198 (questioning the effect of the Michigan v . EPA decision on HAP regulation of coal and oil power plants ). 211. Stack, supra note 124, at 991-1000. 212. Id. at 991-96. 213. Id. 214. Id. at 996-98. 215. Id. at 998-1000 . 216 . See National Emission Standards for Hazardous Air Pollutants From Coal and Oil Fired Electric Utility Steam Generating Units , 77 Fed. Reg. 9304 , 9311 - 67 (Feb. 16, 2012 ) (codified at 40 C.F.R. Pts . 60 , 63) [hereinafter and oil power plants) . 240 . Michigan v. EPA, 135 S. Ct. at 2710 . 241. See id. at 2705 (summarizing the legislative history of § 7412(n )). 242 . Carbon Pollution Emissions Guidelines for Existing Stationary Sources: Electric Utility Generating Units , 80 Fed. Reg. 64662 , 64710 (Oct. 23 , 2015 ) (to be codified at 40 C.F.R. Pt . 60 ) [hereinafter Clean Power Plan Regulations]. 243. EXECUTIVE OFFICE OF THE PRESIDENT, THE PRESIDENT'S CLIMATE ACTION PLAN 6 ( 2013 ), www.whitehouse.gov/sites/default/files/image/ president27sclimateactionplan. pdf, (noting that GHG emissions from the power sector account for 1/3 of total emissions); see also Clean Power Plan Regulations , supra note 242, at 64665 (characterizing the rules as a major part of President Obama's Climate Action Plan) . 244 . Mario Loyola , Federal Coercion and the EPA's Clean Power Plan , THE ATLANTIC (Oct. 24 , 2015 , 6 :05 PM), www.theatlantic.com/politics/archive / 2015 /05/federal -coercion-and-the-epas-clean-power-plan/393389/ (explaining the Clean Power Plan); Clean Power Plan Regulations, supra note 242 , at 64665. 245. Clean Power Plan Regulations, supra note 242 , at 64462; Petition for Review at 2, West Virginia v . EPA, No. 15 - 1363 (D.C. Cir . Oct. 23 , 2015 ), www.ago.wv.gov/pressroom/2015/Documents/File-stamped%20petition% 2015 - 1363 % 20 %28M0108546xCECC6% 29 - c1 . pdf (broadly outlining challenges to the Clean Power Plan) . 246 . Petition for Review, supra note 245, at 2 . 247. Clean Power Plan Regulations, supra note 242 , at 64712 (analyzing two versions of 42 U.S.C. § 7411(d) passed with the 1990 CAA Amendments ); Unclear After Supreme Court Denies Agency Deference , BLOOMBERG , June 30, 2015, www.bna.com/clean-power-plan-n17179928897/ (addressing the conflicting versions of 42 U.S.C. § 7411 (d)). 248 . Petition for Review, supra note 245 , at 2. (asserting challenges to the Clean Power Plan on constitutional and statutory grounds) . 249 . THE PRESIDENT'S CLIMATE ACTION PLAN , supra note 243, at 6; Clean Power Plan Regulations , supra note 242 , at 64665 . 250. Clean Power Plan Regulations, supra note 242 , at 64663 (reviewing and mass-based emissions goals for states) . 251. Id. at 64666 . The three choices for state plans include increasing meet their state plan goals . Id. at 64663; see also Loyola, supra note 244 (listing Clean Power Plan compliance options) . 252. Clean Power Plan Regulations, supra note 242 , at 64665- 67 . These programs involve increasing demand-side energy efficiency . Id. 253. See id. at 64666 (explaining compliance options) . This hypothetical 64663. 254. Id. at 64666-67; see also Patrick Parenteau, The Clean Power Plan Will Survive: Part 2 , LAW360 (Sept. 29, 2015 10:15 AM), www. law360.com/articles/704048/the-clean -power-plan-will-survive-part-2?art icle_related_content=1 (detailing the Clean Power Plan's structure) . 255. Parenteau, supra note 254 . 256. Standard of Performance for Greenhouse Gas Emissions From New, Power Plan Regulations , supra note 242 , at 64714. The real issue facing the the ambiguities in § 7411(d ). Parenteau, supra note 260 . 267. Valerie Volcovici & Lawrence Hurley , U.S. States, Business Groups Challenge Obama's Carbon Rules in Court , REUTERS, Oct. 23 , 2015 , www.reuters.com/article/us-usa -climatechange-lawsuit-idUSKCN0SH1JH201 51023. 268. Id .; Parenteau, supra note 260. Justice Scalia's death may change the action' in D.C. Circuit , E & E PUBLISHING , LLC, Feb . 19 , 2016 , www.eenews.net/stories/1060032665. If there are not nine justices on the D.C. Circuit Court of Appeal's decision will govern the outcome of the case . Id. 269. See Clean Power Plan Regulations, supra note 242 , at 64665 (listing examples of beyond the fence-line regulations); Loyola, supra note 244 (noting the uniqueness of beyond the fence-line regulations in the EPA's history). 270. See Loyola, supra note 244 (describing difference between within-the- fence-line and outside-the-fence-line regulations ). 271. Id . 272 . See Scott . C. Oostdyk, A Constitutional Challenge to EPA's 'Clean Power Plan' , LAW360 (Oct. 27 , 2015 , 1 :05 PM), www.law360. com/articles/590762/a-constitutional-challenge-to-epa-s-clean-power-plan beyond-the-fence-line); see also Parenteau, supra note 254 (noting the regulations are willful state choices to meet federal goals ). 273 . Brown & Williamson Tobacco Corp., 529 U.S. at 159- 61 . 274 . See U.S. ENERGY INFO. ADMIN ., FREQUENTLY ASKED QUESTIONS: WHAT IS U.S. ELECTRICITY GENERATION BY ENERGY SOURCES ? ( Apr . 1, 2016 ), www.eia.gov/tools/faqs/faq.cfm?id=427& t=3 (showing that coal accounted for 39% of total U.S. electricity generation in 2014, while petroleum accounted for 1 %). 275 . See U.S. DEPARTMENT OF COMMERCE, BUREAU OF ECONOMIC ANALYSIS , GDP BY INDUSTRY , (Sept. 5 , 2016 ), www.bea.gov/industry /gdpbyind_data.htm (listing the value of the utility industry in 2014 at approximately $291 billion, while the value of the food and tobacco manufacturing sector was around $235 billion) . 276 . Brown & Williamson Tobacco Corp., 529 U.S. at 136-40 (showing that withdrawal symptoms) . 277. Id. 278. See Clean Power Plan Regulations, supra note 242, at 64663 requirements) . 279. Id . 280 . See Brown & Williamson Tobacco Corp., 529 U.S. at 136-40 (limiting 243, at 64663 (reviewing system of cooperative federalism to meet GHG emissions reduction targets) . 281 . See Util . Air Regulation Grp., 134 S. Ct . at 2444 (rejecting PSD permitting requirements for GHG emissions on major questions grounds ). 282. See Clean Power Plan Regulations, supra note 242, at 64664 from fossil fuel power plants); see also Util. Air Regulatory Grp ., 134 S. Ct . at 2436 (linking Massachusetts decision and subsequent efforts to regulate GHG emissions) . 283 . See Oostdyk, supra note 272 (describing the one other time in the Parenteau, supra note 244 (noting uniqueness of beyond-the-fence-line Williamson Tobacco Co. holding); see also BRYNER, supra note 18 , at 123- 28 (reviewing the structure of the 1990 CAA Amendments) . 284 . See Groten, supra note 12 , at 10124-25 (analyzing the link between Util . Air Regulatory Group and beyond-the-fence-line regulations ). 285 . Util . Air Regulatory Grp., 134 S. Ct. at 2444 . 286. See id. (striking down PSD permitting requirements for GHG emissions) . 287. New Source Greenhouse Gas Standards, supra note 256 , at 64512 . 288. See Kevin Bullis , The Cost of Limiting Climate Change Could Double Without Carbon Capture Technology , MIT TECH. REV. (Oct. 27 , 2015 , 4 : 10 PM), www .technologyreview.com/news/526646/the-cost -of-limiting-climate- the lack of scale in industry's use of the technology ). 289. New Source Greenhouse Gas Standards, supra note 256 , at 64512- 13 (implying that CCS technology implicates costs concerns ). 290 . See id. (detailing compliance costs) . 291 . See id. (projecting compliance costs for regulations of new or modified fossil fuel fired power plants); Clean Power Plan Regulations , supra note 202, at 64679 (projecting total compliance costs for the Clean Power Plan at $2.5 billion) . 292. See New Source Greenhouse Gas Standards, supra note 256 , at 64512- 13 ( noting that the EPA increased GHG emissions limits for new fossil Power Plan Regulations , supra note 243 , at 64665 ( detailing cost concerns built into the Clean Power Plan) . 293 . New Source Greenhouse Gas Standards, supra note 256, at 64512-13 . 294 . Clean Power Plan Regulations, supra note 242, at 64664-66 . 295 . Michigan v. EPA, 135 S. Ct. at 2705-06 , 2711 . 296. HAPs Regulations, supra note 216, at 9305; see also W. VA. DEP'T OF ENVTL. PROT. , HAZARDOUS AIR POLLUTANTS (HAPS) LIST ( 2016 ), www.dep.wv.gov/daq/Air%20Toxics/Pages/HazardousAirPollutants%28HAPs% 29List. aspx (listing many HAPs as VOCs as well ); William M. Hodan & William R. Barnard , Evaluating the Contribution of PM2 .5 Precursor Gases and Re-entrained Road Emissions to Mobile Source PM2 .5 Particulate Matter Emissions , www3.epa.gov/ttnchie1/conference/ei13/mobile/hodan.pdf (describing the effects of VOCs on HAPs ambient air pollution ). 297 . Michigan v. EPA, 135 S. Ct. at 2708 . 298. Id . 299 . See C Boyden Gray, EPA's Use of Co-Benefits, THE FEDERALIST SOCIETY (Sept. 24 , 2015 ), www.fed-soc.org/publications/detail/epas-use-of-co- reductions across programs) . 300. Compare Clean Power Plan Regulations, supra note 242, at 64679 (showing direct benefits of $2.8 billion) with HAPs Regulations, supra note 216, at 9305 ( showing direct benefits of $4 to $6 million) . 301. See Clean Power Plan Regulations, supra note 242, at 64679 pollutants from limiting GHGs) . 310 . See EPA 's Proposed 111(d) Rule For Existing Power Plants: Legal and House Committee on Energy and Commerce, 114th Cong . ( 2015 ) (statement of supported by the subsequent analysis . 311. Petition for Review, supra note 245, at 2. 312. See New Source Greenhouse Gas Standards, supra note 256, at 64512 Power Plan) . 313 . See Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 , 124 - 25 ( 1978 ) (highlighting that regulatory takings are almost always valid unless the regulatory action renders property completely unproductive) . 314 . See Parenteau, supra note 254 (detailing federal plan option for states) . 315 . See New York v. U.S., 505 U.S. 144 , 166 ( 1992 ) (recounting Congress' power to create laws under many different parts of the constitution ). 316 . Writ of Certiorari, Michigan v. EPA , 135 S. Ct . 702 ( 2014 ) (No. 14 -26) consider costs in regulating HAPs from coal and oil power plants) . 317. Id . 326 . Parenteau, supra note 260 (predicting that the Clean Power Plan will Plan); but c.f. Oostdyk, supra note 272 (questioning whether Clean Power Plan beyond-the-fenceline regulations can survive a major questions challenge ). 327 . See New York v. U.S., 505 U.S. at 160 ( holding that federal actions do administers the regulatory program); see also Penn Cent . Transp. Co., 438 U.S. at 124-25 (showing that regulatory actions are not takings if there remains some productive use for the regulated property ); see also Texas , 726 F.3d at 196- 97 ( rejecting anti-commandeering argument in a CAA case). 328. See Oostdyk, supra note 272 (supporting major questions challenge to the Clean Power Plan); see also Monast and Hoppock, supra note 322 , at 11068- 72 ( detailing prevailing trends in the energy market ). 329 . See Oostdyk, supra note 272 (predicting failure of the Clean Power Plan on major questions grounds) . 330. See Monast and Hoppock, supra note 322 , at 11068-70 (reporting on from natural gas) . 331. Id . 332 . See Missouri River Energy Services , Environmental Protection Agency (Mar., 2015 ), www.mrenergy.com/uploads/files/2015_EPA_Clean_Power_Plan High-Cost Coal , BLOOMBERG (Oct. 27 , 2015 , 11 :28 PM),


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Thomas Skelton. At What Costs? Environmental Regulations and Cost-Benefit Analysis in Michigan v. EPA, 49 J. Marshall L. Rev. 1257 (2016), The John Marshall Law Review, 2017,