July 4, 2020

Volume X, Number 186

July 03, 2020

Subscribe to Latest Legal News and Analysis

July 02, 2020

Subscribe to Latest Legal News and Analysis

July 01, 2020

Subscribe to Latest Legal News and Analysis

United States Supreme Court Reverses Utility MACT Rule

Today, the United States Supreme Court ruled that EPA unreasonably interpreted the Clean Air Act (CAA) when the agency failed to consider cost in determining whether regulation of air toxics from power plants was appropriate and necessary. The U.S. Court of Appeals for the District of Columbia (D.C. Circuit) upheld the EPA regulations in 2014, but the high court has reversed and remanded the lower court’s ruling. Michigan v. EPA, U.S., No. 146 (June 29, 2015). Justice Scalia delivered the majority opinion in which justices Roberts, Kennedy, Thomas and Alito joined. Justice Thomas also filed a concurring opinion. Justices Kagan, Ginsburg, Breyer, and Sotomayor dissented.

The rule, commonly referred to as the Mercury and Air Toxics Standards (MATS), was finalized in 2012 to require coal- and oil-fired power plants to reduce emissions of mercury and other air toxics. The rule established technology-based emission limitations and work practice standards that became applicable on April 16 of this year, unless a source was granted a one-year compliance extension. Writing for the majority, Justice Scalia explained that the CAA treats power plants differently from other sources for regulation of hazardous air pollutants by requiring EPA to first determine that regulation was “appropriate and necessary.” EPA determined that regulation of hazardous air pollutants was appropriate and necessary but specifically did not consider costs in the determination.

The Supreme Court found that EPA is required to consider cost as a relevant factor in the appropriate and necessary determination. First, the Court found that the term “appropriate and necessary” is broad and all-encompassing and should include consideration of cost, noting that administrative agencies have long treated cost as relevant when deciding to regulate. Second, the Court found that the statutory context, which required a study considering the cost of control technology, showed the relevance of cost in the appropriate and necessary finding. The Court further rejected EPA’s claim that the CAA makes cost irrelevant to the initial decision to regulate other sources under Section 112, pointing out that Congress crafted a separate provision in Section 112 specifically to address power plants.

The Court specifically stated that EPA “must consider cost - including, most importantly, cost of compliance - before deciding whether regulation is appropriate and necessary”. The Court, however, left to EPA the discretion “within the limits of reasonable interpretation” to decide how to account for cost.

© 2020 Dinsmore & Shohl LLP. All rights reserved.National Law Review, Volume V, Number 180


About this Author

Carolyn M. Brown, Dinsmore, environmental litigation Lawyer, Compliance Issues

Carolyn M. Brown’s understanding of environmental law makes her an invaluable resource to her clients. Her practice focuses on all areas of environmental law and includes counseling on regulatory requirements, permitting and transactional issues as well as environmental litigation. She spends a significant amount of time dealing with air permitting and compliance issues, water discharge permitting and compliance issues, as well as waste management and site remediation matters. 

(859) 425-1092
Robin B. Thomerson, Dinsmore, Environmental Lawyer, Energy Attorney
Of Counsel

Robin Thomerson is a member of the litigation department and focuses her practice on environmental law including issues arising regarding permitting and compliance with the Clean Air Act, Clean Water Act, RCRA and CERCLA. She has represented various entities, including utilities and manufacturing companies, in maintaining compliance with environmental laws.

Prior to entering private practice, Robin served as an attorney with the Kentucky Energy and Environment Cabinet where she represented the Kentucky Divisions of Waste and Water and served as the lead attorney for the Kentucky Division for Air Quality where she handled numerous compliance, permitting and programmatic matters. Robin’s experience with the regulatory agencies gives her a unique perspective that aids in addressing her clients’ needs.     

(859) 425-1094