States May Win at Supreme Court in Initial Battle Over Fighting Smog, Lawyers Say

The logo of the Environmental Protection Agency, in Washington, on March 16, 2017. Getty Images

Legal experts say there is a good chance that the Supreme Court will rule in favor of Republican-led states and the energy industry and will put the U.S. Environmental Protection Agency’s (EPA’s) “good neighbor” rule on hold. The rule aims to crack down on states whose industries are blamed for contributing to smog.

The states say the regulation could lead to blackouts, while the EPA says it’s urgently needed to fight air pollution. The states and various companies also say the EPA’s plan is an illegal overreach that undermines the principles of the federal Clean Air Act, which allows states leeway to propose their own air pollution control measures.

The case comes as the Supreme Court has become increasingly reluctant in recent years to side with the EPA in legal battles.

In 2022, the court held in West Virginia v. EPA that the Clean Air Act doesn’t give the EPA widespread power to regulate carbon dioxide emissions. And in 2023, in Sackett v. EPA, the court voted to rein in the power of the EPA to regulate wetlands.

In the case at hand, on Dec. 20, 2023, the court declined to block the smog regulation itself but agreed to expedite consideration of the case. Oral arguments will be heard in Ohio v. EPA on Feb. 21.

The hearing will also encompass applications filed against the EPA by Kinder Morgan Inc., American Forest and Paper Association, and U.S. Steel Corp., which have been consolidated.

Over the objection of states and energy companies, the EPA finalized its “Federal ‘Good Neighbor Plan’ for the 2015 Ozone National Ambient Air Quality” regulation on June 5, 2023. The plan imposes emissions standards on 23 “upwind” states.

According to the EPA, cross-state air pollution, also called interstate air pollution or transported air pollution, is emitted at an “upwind” location and then blown to a “downwind” location.

The plan is intended to address the interstate effect of air pollution in accordance with the Clean Air Act’s Good Neighbor Provision in 42 U.S.C. Section 7410(a)(2)(D), which requires upwind states to make sure their emissions don’t hinder the ability of downwind states to meet federal air-quality standards.

The EPA toughened ozone standards and ordered states to file updated state implementation plans, or SIPs, demonstrating how they would comply with the new standards. This new top-down regulation sparked opposition in many states that are now litigating the issue in the courts.

EPA’s Good Neighbor Plan

Last year, the agency didn’t approve 21 of the SIPs submitted by states and instead published its blueprint known as the Good Neighbor Plan. This plan encompasses 23 states, establishes an emissions trading program for power plants, and imposes restrictions on various industrial sources, according to a Congressional Research Service (CRS) report.

The EPA argued that its rule would reduce ground-level ozone, which “can cause respiratory issues, aggravate asthma and other lung diseases, and lead to missed days of work or school, emergency room visits, and premature deaths.”

The agency said these “costly public health impacts can be especially harmful to children and older adults, disproportionately affecting people of color, families with low incomes, and other vulnerable populations.”

The rule would also “significantly cut smog-forming nitrogen oxide pollution from power plants and other industrial facilities in 23 states” and “improve air quality for millions of people living in downwind communities, including Connecticut.”

Connecticut would be the main beneficiary, the EPA acknowledged.

“Southern [Connecticut] experiences the highest ground-level ozone levels in the eastern half of the [United States] ... Connecticut cannot reach attainment with EPA’s ozone air-quality standard without upwind emission reductions from sources in states south and west of Connecticut,” the agency stated.

The states counter that air quality is largely affected by out-of-state emissions, so it can be difficult for them to control. Some pollutants linger in the atmosphere and can travel great distances from the point of emission. Among these pollutants are nitrogen oxide and volatile organic compounds that react in sunlight to form ground-level ozone, the main ingredient in smog.

Ozone and ozone precursor emissions can move hundreds of miles in the air and when carried by wind can make up a large fraction of the concentrations of those pollutants in downwind states, particularly in the eastern United States, according to CRS.

The ozone-control program for power plants is currently being implemented in 10 states: Illinois, Indiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and Wisconsin.

Meanwhile, courts have blocked the program in 12 states: Alabama, Arkansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma, Texas, Utah, and West Virginia, according to the EPA.

In Ohio v. EPA, the U.S. Court of Appeals for the District of Columbia Circuit declined to stay the Good Neighbor Plan while litigation was proceeding in the courts. No court has yet issued a final ruling on the EPA’s disapproval of the SIPs, nor the Good Neighbor Plan itself.

EPA Versus ‘Cooperative Federalism’

Although the justices may touch upon the merits of the Good Neighbor Plan during the Feb. 21 hearing, the dispute currently before the nation’s highest court is about whether the plan should be in effect while the controversy is sorted out by lower courts. After the Supreme Court rules in the current case, the issue may return to the court again in the future.

U.S. Solicitor General Elizabeth Prelogar previously urged the Supreme Court to allow the rule to remain in force.

“Staying the rule’s implementation would significantly harm the public interest,” she wrote in a brief.

“It would delay efforts to control pollution that contributes to unhealthy air in downwind states, which is contrary to Congress’s express directive that sources in upwind states must assume responsibility for their contributions to emissions levels in downwind states.”

“By leaving air pollution caused by upwind states unabated, applicants’ requested extraordinary relief would impose negative health consequences and additional regulatory burdens on downwind states and their citizens,” which violates the central aim of the Good Neighbor provision, she noted.

In October 2023, Ohio Deputy Solicitor General Mathura Sridharan urged the Supreme Court to immediately block the plan, which she described as “already a failed experiment.”

The rule “inflicts irreparable economic injuries on the states and others every day it remains in effect.”

The plan may also cause blackouts as power suppliers struggle to adhere to its terms, she wrote in a brief.

“In reality, the federal plan was always doomed, the EPA’s carefully timed gambit to work around the Clean Air Act’s structure of cooperative federalism was never going to work,” she added.

‘Virtually Impossible’ to Meet Standards

Jim Burling, vice president of legal affairs for the Pacific Legal Foundation, said the Clean Air Act’s embrace of a cooperative federalism paradigm means the states get to write their own state implementation plans for how to combat air pollution.

The act was set up that way so “states and their sovereignty would not be overtaken by a federal agency, and EPA has chafed over that for the past half-century, and they do what they can now and then to undercut that,” he said in an interview.

The state plans are supposed to receive “a relatively ministerial approval,” he said. Ministerial approvals are those involving little or no discretion, for which government officials compare plans against a prescribed checklist with clear requirements.

The EPA is supposed to approve plans to make sure that the state is making a credible effort to reduce pollution according to certain standards, he said.

In this case, the EPA wasn’t happy with the state plans and disapproved virtually every plan, but “conveniently had its own regulation to put in place,” Mr. Burling said.

The states and affected industries were unhappy with the Good Neighbor Plan standards because it was going to be “virtually impossible” for them to meet them, so they sued, he said.

The states argue that they complied with the federal Clean Air Act and that the EPA’s decision to disapprove the state plans was arbitrary and capricious and therefore a violation of the federal Administrative Procedure Act, he said.

EPA ‘Thumbing Its Nose at Congressional Intent’

The states contend that the EPA is “running roughshod over the states’ sovereignty that Congress preserved when it passed the Clean Air Act,” Mr. Burling said.

The Clean Air Act spells out the essential role that states play in cleaning up the nation’s air “rather than it being a purely top-down federal government rule governing everybody.”

Mr. Burling said, “[Congress] wanted the states to be an integral part of the rulemaking process, and the EPA is essentially thumbing its nose at that congressional intent, saying, ‘No, we don’t like what a vast majority of the states are doing.’”

Longtime court watcher Curt Levey, president of the conservative nonprofit group Committee for Justice, said that it wasn’t clear to him why the EPA rejected the state solutions. He said he believes this is “indicative of federal bureaucrats thinking they know better than everyone else, whether it’s individual citizens or states.”

The nation has survived for decades without EPA-imposed Good Neighbor plans, and “there’s not an emergency of any kind” justifying the federal rule, while the harms that the states and companies are complaining about really “could be urgent,” he said.

“Given that the urgency really is on one side, it makes sense for the court to stay [the federal rule] while this litigation continues,” he said.

He added that those challenging the federal regulation say its implementation will cause disruptions in the supply of natural gas that is going to affect both consumers and businesses.

“I think the alleged effects are serious enough that it merits ... a temporary stay ... until we get a final resolution of the plaintiffs’ suits,” Mr. Levey said in an interview.

Steven J. Allen, a distinguished senior fellow at Capital Research Center, a watchdog group, said that although the Supreme Court ought to stay the federal rule in Ohio v. EPA, that doesn’t mean the court will do it.

Even if the states and companies in the lawsuit convince the Supreme Court to stay the Good Neighbor Plan, that won’t be the end of the case, he said.

“Keeping the case going is not winning, in terms of the final decision.”

The Good Neighbor Plan is an example of the kind of overreach the agency has participated in for a long time, he said.

When the EPA was created in the 1970s, there were serious environmental problems, such as water being so heavily polluted that it caught fire, but since then, 99 percent of the nation’s environmental problems have been solved, Mr. Allen said in an interview.

Although the EPA succeeded in its mission, it has engaged in “mission creep” and “chronic overreach” to justify its continued existence, he said.

The EPA is “highly ideological” and supports the work of “radical environmentalists,” he said. “There’s nothing the EPA does that doesn’t involve overstepping.”