by Chaim Mandelbaum, FME Law Counsel

On May 16th, 2016, the D.C. Circuit issued a surprise decision in the case regarding one piece of the ‘Obama Clean Power Plan’, ordering that the full Circuit Court would hear the case, instead of the three judge panel to which it was originally assigned to.  The case, West Virginia, et al. v EPA, of which E&E Legal is a part, challenges the EPA’s “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units” rule  under section 111(d) of the Clean Air Act, which will decimate coal fired power plants in the US if it goes into effect.

Both sides in the case have already filed briefs, and the oral arguments had been scheduled for June. Now however, oral arguments will occur in late September, 2016. Ordinarily the review of a rule by an executive agency like EPA would be heard by a three judge panel first, and that panel would initially decide the case. The losing party would have the right to appeal, asking the full Circuit Court to have all the active judges hear the case, in what is known as en banc review.

For the Circuit Court to have decided that this case should no long be reviewed by the panel of judges to which it was assigned, and go straight to the full Circuit instead, is extremely rare. The last time the Circuit issued such an order was in United States v. Microsoft which dealt with antitrust allegations made against the technology company. In that case the decision to move directly to en banc review was made more out of practical necessity. Only seven judges were available to hear to the Microsoft case, due to recusals. The Circuit has eleven active judges, but in that case, four felt they could not participate. Thus it was likely that the decision there to go directly to the full Circuit was made due to how few judges would be available to participate in any full review yet not have been part of the original panel.

No such consideration exists in this case. Of the eleven judges on the Circuit, nine participated in the decision to take the case from the three judge panel and move to the full Court. Two chose to recuse themselves. Judge Garland, who has been nominated for the Supreme Court, has recused himself from all cases this term. In addition Judge Pillard, who was appointed by Obama in 2013, also chose not to take part in the decision. This makes it likely, although not a guarantee, that she will not take part in the actual review of the EPA’s rule. Of the nine judges who will certainly take part in the full Circuit Court’s review of the rule, five were appointed by Democrats while four were appointed by Republican Presidents.

The rarity of such an action by the DC Circuit, combined with the timing, coming only a few weeks before oral arguments were set to take place, suggests that the Circuit has decided this is no ordinary case, despite repeated protestations by EPA that this rule is a “garden-variety administrative law case” that can be dealt with under ordinary administrative law precedents such as the Chevron doctrine, which gives agencies like EPA maximum deference. Instead it is clear the Circuit considers this rule, and the legal questions raised by the unprecedented number of challengers to it, which include 27 states and 126 other petitioners from across the spectrum including utilities, unions, and public policy groups, to be of grave importance.

The move by the DC Circuit will also heighten the chances for the rule to be quickly reviewed by the Supreme Court. Ordinarily, the losing party in such a case could seek en banc review, and then appeal the decision to the Supreme Court. In this case however, the only step after the Circuit reaches its decision will be review by the highest court in the land. Given that 44 states have become involved on opposing sides of an issue that threatens to transform the entire energy sector of the country, that is likely this case’s final destination.

EPA Denies Petitions for Reconsideration

On May 2nd, 2015 the EPA acted to deny petitions for reconsideration filed by five parties on another part of the ‘Obama Clean Power Plan.’ E&E Legal and others had asked the EPA to reconsider the Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources—Electric Utility Generating Units rule which functionally prevents any new coal-fired power plants from being built. E&E Legal was among the five parties whose petition for reconsideration was denied, alongside the State of Wisconsin, several energy companies, and the Utility Air Regulatory Group.

E&E Legal had petitioned EPA to reconsider this rule in light of the many emails that FOIA requests had uncovered showing improperly close cooperation on the rule between the agency personnel drafting it and outside green groups, especially since none of these emails or any evidence of this close relationship were put into the public record when EPA asked for public comments on the rule. Most of this evidence was buried until after the rule was finalized.

E&E Legal and the other petitioners had filed these petitions for reconsideration at the end of 2015, with E&E Legal’s being filed December 22, 2015. EPA often doesn’t answer such petitions for months or years after they are submitted, making it very unusual that these five were denied so quickly. Indeed E&E Legal submitted another petition for reconsideration, on another part of the EPA rule, on the very same day, which EPA has not answered. At the same time petitions on older EPA rules, submitted years ago are still sitting at the agency, awaiting a decision.

In denying E&E Legal’s petition, EPA made several curious claims. EPA claimed it had the right to engage in ‘ex parte’ contacts with outside groups, a fact E&E Legal never denied. Yet EPA never responded to the crux of the argument, which is that EPA had a duty to disclose these contacts when it asked the public to comment on the rule. E&E Legal never questioned whether outside groups had a First Amendment right to offer their views to the agency; it merely noted the need for transparency. Indeed the very case EPA cited in denying E&E Legal’s petition noted that “The court notes that the Act does not prohibit ex parte contacts during rulemaking but instead requires that written communications and transcripts of oral communications be entered in the record.” Sierra Club v Costle 657 F. 2d 298, 400-402 (D.C. Cir. 1981).

However the reality remains that EPA did deny the petition for reconsideration, and published this denial in the Federal Register on May 5th, 2016. Thus E&E Legal and other interested parties have the right to file suit and seek Court review of the decision by EPA to issue this denial. Under the Clean Air Act, challengers of this decision have 60 days from the date of publication in the Federal Register to file a challenge, and E&E Legal intends to do so.