A Banner Day for Rule of Law, Constitution, and Common Sense

In an unexpected and unprecedented decision, the Supreme Court last evening granted an application by more than two dozen states to stay implementation of the Clean Power Plan during pendency of petitions for review.  

Absent a stay, the imminent danger was that EPA could effectively escape judicial review in implementing the rule, which is President Obama’s marquee climate policy. Last year, for example, the Supreme Court checked EPA’s absurd Utility MACT, but not before 80 percent of utilities spent billions of dollars implemented the rule during the three years that it took for the legal challenge to run its course through federal courts. So, EPA had already won, even before the Court ruled the rule was impermissible.

The Clean Power Plan posed the same threat. Capital-intensive businesses like utilities must plan on a multi-year horizon, at least five years out. Indeed, power plants take years to build. The electric sector simply cannot wait for the slow wheels of justice to turn. As such, utilities likely would have locked in compliance during judicial review, regardless whether the regulation was determined to be illegal.

With last evening’s decision, the Court avoided a repeat of the Utility MACT injustice and, in so doing, scored a win for the rule of law, the Constitution, and common sense. Regarding the rule of law, I explained yesterday that the Clean Air Act plainly prohibits EPA’s Clean Power Plan, and the agency’s argument to the contrary is a “monument to disingenuousness.” From a constitutional perspective, the Court’s stay prevents EPA from “commandeering” states—in violation of the Tenth Amendment—by forcing them to spend significant administrative resources implementing federal climate policy they oppose. And from a common sense standpoint, the Court’s decision arrests EPA’s attempt to overhaul the nation’s electricity sector in order to achieve climate “benefits” that are too small to be measured.

The states submitted their application in late January to Chief Justice Roberts, who, in turn, sought counsel from his peers. As per usual, Justice Kennedy was the swing vote in the 5-4 decision. Justice Kennedy has a history of being solicitous of states’ “dignity” within American federalism, so I suspect he was impressed by the number of states that opposed the Clean Power Plan.

Where do we go from here?

The Court’s decision is unprecedented, so it’s tough to predict the ramifications. The key question is: How will this influence the D.C. Circuit, where judicial review will now proceed on the merits.

In mid-January, the D.C. Circuit demurred on a stay request by the states. Notably, the criteria for winning a stay is different in the lower and higher courts.

In the D.C. Circuit, the factors to be weighed include: 1) likelihood of petitioners’ success on the merits; 2) whether petitioner would suffer irreparable harm absent a stay; 3) would others be harmed without a stay; and 4) does the public interest favor granting a stay.

In the Supreme Court, by contrast, the criteria are: 1) is there a reasonable probability that 4 justices would vote to grant review; 2) is there a fair prospect that a majority of justices would side with the petitioners on the merits; 3) would the petitioners suffer irreparable harm absent a stay; and 4) does the balance of equities favor a stay.

So, the D.C. Circuit denied the stay, under a standard that asks the court to determine the petitioners’ “likelihood” of success. On the other hand, the Supreme Court granted the stay, under a standard that asks the Court to determine if there is a “fair prospect” of the petitioners succeeding. Thus, the higher court’s standard is less onerous. It follows that the lower court is not boxed in. However, in the words of Jerry Seinfeld, the Supreme Court’s decision last night is “one big matzo ball hanging out there” for the D.C. Circuit. The three judge panel on the lower court now knows that there’s a “reasonable probability” their decision to uphold the EPA would be reviewed by the Court, and a “fair prospect” it would be overturned.