February 15, 2016

In Victory For MSCI, Allies Supreme Court Halts EPA Clean Power Plan

In a 5-4 decision issued last Tuesday evening, the U.S. Supreme Court granted a motion filed by the U.S. Chamber of Commerce, the National Association of Manufacturers and several U.S. states and other industry groups to stay the Environmental Protection Agency’s (EPA) Clean Power Plan while an appeals court in the District of Columbia reviews multiple legal challenges to the regulation’s legality. The request to stay, which MSCI supported, cited numerous legal problems with the regulation, which concerns emissions from existing power plants, and the substantial and immediate harm it will cause to states and to industry while it proceeds through the courts. 

The Supreme Court’s decision means the regulation will not be in effect until all court proceedings in the U.S. Court of Appeals for the D.C. Circuit, as well as any further appeals to the Supreme Court, are concluded. The circuit court case is proceeding on an expedited basis in the D.C. Circuit, with briefing to conclude in April and oral arguments set for June 2. If the Supreme Court ultimately reviews the merits of this challenge, it would likely occur in 2017. 

While the court did not comment in its ruling on the constitutionality of the regulation, U.S. Chamber of Commerce Vice President for Climate and Technology Stephen Eule noted, “This is a remarkable and unprecedented decision, as the legal hurdles that have to be jumped over to get the court to agree to stay a new regulation are many and high” and argued, “[T]he court wouldn’t have taken such a step unless it thought the petitioners … [had[ a sound legal argument that EPA has overreached its authority and that they could reasonably be expected to prevail on the merits.” 

The U.S. Chamber of Commerce offers a video explanation of the ruling on its website and The Washington Post provides a comprehensive explanation of what the stay means and the legal reasoning behind it. 

President Barack Obama dismissed the ruling and said the EPA is “on strong legal footing despite” the Supreme Court’s action. (The president also noted the Clean Power Plan has not been “struck down.”) 

The Supreme Court issued its decision just days before the death of Supreme Court Associated Justice Antonin Scalia. Scalia was part of the 5-4 majority that stayed the EPA’s regulation and he was a staunch opponent of the EPA’s argument that it has the power to regulate carbon under the Clean Air Act. The Atlantic explores how the court might decide this matter going forward.