High court boosts bid to get coal burners to install pollution controls

HeÂ’s glad it wasnÂ’t.

In a 9-0 ruling, the Supreme Court vacated a decision by the 4th U.S. Circuit Court of Appeals, saying the appeals court implicitly invalidated 1980 EPA regulations without considering whether it had jurisdiction to do so.

But before reaching that result, the Supreme Court considered the meaning of the word modification, and gave a boost to EPA efforts begun during the Clinton administration to force older coal-fired power plants to install pollution-control equipment when upgrading facilities.

Washington, D.C., attorney Sean H. Donohue, who argued before the high court for environmental groups that intervened in the case, says he is glad the Supreme Court did not confine its ruling to the narrow question of which appeals court has jurisdiction.

“We recognized that one possibility would be a very, very narrow ruling merely saying that this is a matter of exclusive… jurisdiction” for the U.S. Court of Appeals for the D.C. Circuit, instead of the Richmond, Va.-based 4th Circuit, he says. “We think that what the court did in the decision was more helpful for us because it addresses a lot of these specific arguments about the regulations. We are very happy with it.”

The opinion for the court by Justice David H. Souter said the 4th CircuitÂ’s invalidation of the 1980 regulations implicated provisions of the Clean Air Act that vest jurisdiction with the D.C. Circuit.

The decision also endorsed the EPAÂ’s interpretation of its regulations, which require a permit when major modifications to power plants result in an increase in annual pollution emissions.

Duke Energy Corp. had claimed the 1980 regulations needed to be consistent with 1975 regulations defining modification as a physical change that increases the hourly rate of pollution, rather than an increase for the year. Duke had upgraded 29 of its plants so it could operate them more often, resulting in a net annual increase in pollution even though its maximum hourly pollution discharge had not increased.

The 4th Circuit had said that under the terms of the Clean Air Act, the definition of modification had to be consistent in both regulations, and so it interpreted the later regulation as requiring an increase in the hourly pollution rate. Souter rejected that approach as “too far a stretch,” saying the EPA can assign more than one meaning to the word. “Principles of statutory construction are not so rigid,” he wrote.

Justice Clarence Thomas wrote separately to say he concurred in the decision to vacate the 4th Circuit ruling, but not with the majority’s “dicta” stating there is no need for a uniform definition of modification.

While the legal issues may be arcane, the impact of the decision is not, Donahue says.

“The problem with the decision is, to explain the details, you have to get so lost in these arcane regulatory weeds that you have lost your audience or run out of column inches,” Donohue says. But the outcome “really is a major boost for these much-maligned enforcement suits” brought by the EPA to force older power plants to install pollution equipment when making upgrades.

“Environmentalists haven’t had a lot of significant victories at the federal level in recent years,” Donohue says. “It’s a very good day, and we hope a harbinger of further progress.”

But it's likely to be a short-lived victory. The EPA has been discussing since 2005 a proposed regulation that, in effect, adopts the meaning of modification endorsed by Duke Energy and the 4th Circuit. Agency spokeswoman Jennifer Wood says the Duke Energy decision will not affect its plan to narrow the rule.

Attorneys for Duke Energy did not respond to requests for comment on the Supreme Court ruling.

The EPA had filed the initial suit against Duke Energy in 2000, during the last days of the Clinton administration. The intervening environmental groups sought certiorari, but the agency opposed it. The EPA then defended the regulations after the court accepted the case, the first time it had granted cert over government opposition in an environmental case in nearly 30 years, says Marisa Martin, a Chicago lawyer in Baker & McKenzieÂ’s environmental group.

“The position the EPA was in was kind of unique,” says Martin, who analyzed the pending case for Preview of United States Supreme Court Cases, an ABA periodical. “They were promulgating regulations contrary to what they were arguing in front of the Supreme Court. It will be interesting to see what happens next in this case.”

David Friedland of Washington, D.C., who chairs the Air Quality Committee of the ABA Section of Environment, Energy and Resources, sees the decision as a narrow one that leaves a lot of other legal arguments still in play.

Still, he says a unanimous decision in the case was something of a surprise, given vigorous questioning during oral arguments. He points to this comment by Justice Antonin Scalia: “What I am concerned about is that the companies can get whipsawed.”

Now the lower courts will have to sort out the Supreme Court’s dicta, says Paul Kamenar, senior executive counsel with the Washington Legal Foundation in Washington, D.C. “I can see future litigation springing forward from this ruling,” says Kamenar, who filed an amicus brief on behalf of the WLF supporting Duke Energy.

On remand, he says, the 4th Circuit could still decide to exempt Duke Energy from the 1980 regulation on the ground it retroactively targets practices that were routine under 20 years of contrary interpretation of the Clean Air Act.

Another unresolved issue is whether upgrades that constitute merely minor modifications are exempt from the permit requirements. There is “still a lot of room to litigate application of the rules in the case-by-case context,” Kamenar says.