Social Cost of Carbon Litigation – Who Will Have the Last Laugh?

The 10-State litigation led by Louisiana Attorney General Jeff Landry to block the Biden administration’s use of social cost of greenhouse gases (SC-GHG) estimates in policy making was always bold, but now it’s funny too.

Here is a very bare-bones recap.

• April 22, 2021: Louisiana joined by Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming, petitions the U.S. District Court for Western Louisiana to bar federal agencies’ use of the Biden administration’s SC-GHG estimates as arbitrary and capricious, contrary to law, and injurious to the petitioning States’ economies.

• June 28, 2021: The Department of Justice (DOJ) asks Louisiana District Court Judge James D. Cain to dismiss the petition, arguing, in part, that plaintiffs cannot show injury because federal agencies do not “rely on” SC-GHG estimates in rulemakings or other actions.

• February 11, 2022: Judge Cain grants a preliminary injunction to prohibit six federal agencies and several cabinet and White House officials, including Joseph R. Biden, from “adopting, employing, treating as binding, or relying upon” the administration’s SC-GHG estimates in policymaking.

• February 19, 2022: DOJ files a motion to stay Judge Cain’s injunction, arguing that numerous regulatory and administrative proceedings in which SC-GHG estimates inform agency benefit-cost analyses will now have be delayed or abandoned.

• March 4, 2022: Louisiana et al. ask Judge Cain to reject the motion to stay, arguing in part that DOJ asserts contradictory positions.

• March 9, 2022. Judge Cain denies the motion to stay, arguing in part that federal agencies are using SC-GHG estimates “to justify final agency action that will artificially increase costs in the cost/benefit analysis and systematically increase regulatory burdens on Plaintiff States.”

When DOJ filed its February 19 motion to stay, White House official Dominic Mancini predicted the injunction would backfire, making life harder, not easier, for plaintiff states’ fossil fuel industries.

As summarized by E&E News, the injunction could “affect dozens of pending agency analyses—including those for federal oil and gas activity—leading to increased costs and more uncertainty for industry.” E&E further reported: “A spokesperson for Interior confirmed it was expecting delays in permitting—the approval of individual oil and gas wells—as well as leasing for its oil and gas programs in the wake of the court decision.”

But DOJ also claims SC-GHG estimates are not used to make regulatory or permitting decisions, so omitting such metrics should not change the outcome of any rulemaking or project review. And how hard can it be for a federal agency to recalculate benefits, costs, and net benefits after deciding not to input certain numbers?

Biden officials’ “prediction” of an administrative slowdown looks suspiciously like a threat of retaliation.

If that’s what it is, it is not working. Landry’s reply to the government’s motion begins with the funniest jab I have seen in a court filing:

Before this motion was filed, Defendants consistently maintained that the Executive Branch does not rely on the SC-GHG Estimates to justify administrative actions. Now, however, they are singing a very different tune. Now they say enjoining the Estimates will have dramatic consequences and interfere with the entire Executive Branch’s ability to function. Both assertions cannot be true.

The extent of the contradiction between Movants’ stay brief and their prior representations—and even between parts of Movants’ stay brief—is striking. To demonstrate they are likely to succeed on the merits, Movants must argue that the Estimates are not in use and do not raise major questions. But to try to prove irreparable harm, Movants must concede that the Estimates are in use and do represent major questions. Plaintiff States agree that the Estimates are in use across the Executive Branch and also that this use represents questions of major political, economic, and social importance. Indeed, the Movants’ assertions only prove the point. That is precisely why the injunction must not be stayed despite Movants’ nebulous and unsubstantiated allegations of irreparable harm to the Executive Branch.