On June 29, the United States Supreme Court nixed the United States Environmental Protection Agency’s 2012 Mercury and Air Toxics Standard, limiting emissions of mercury and other pollutants from power plants. The challengers argued that the $9.6 billion cost of complying with the standard outweighed the benefit of its application, and that EPA impermissibly failed to consider cost in deciding whether to regulate toxic emissions from power plants.
The Supreme Court held that EPA abused its discretion by ignoring cost, even under the deferential standard established in Chevron USA Inc. v. Natural Resources Defense Council, Inc. The Court held that in directing EPA to regulate power plants if it “finds such regulation is appropriate and necessary,” Section 112 of the Clean Air Act requires “at least some attention to cost.” Writing for the majority, Justice Scalia said, “One would not say that it is even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.”
EPA argued that it is not required to consider cost in the initial decision regarding whether to regulate power plants because it can consider cost when deciding on the extent of regulation. The Court rejected this argument, finding that “[c]ost may become relevant again at a later stage of the regulatory process, but that possibility does not establish its irrelevance at this stage.” The majority found that cost must be considered, but went on to say that it is within the agency’s discretion to consider how to evaluate costs, and even what constitutes a “cost.” The Court stated that cost “includes more than the expense of complying with regulations; any disadvantage could be termed a cost.”
--Kathryn Oehlschlager
For more information, contact Kathryn Oehlschlager at klo@bcltlaw.com or (415) 228-5458.
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