January 24, 2016. An earlier post described the basic requirements of a new federal rule (the Clean Power Plan) requiring existing power plants to reduce carbon dioxide (CO2) emissions. Note: That post described the draft rule out for public comment in 2014; the final rule approved by the U.S. Environmental Protection Agency in August 2015 differed from the draft rule in some details — including the specific state CO2 reduction targets — but the basic requirements did not change.
North Carolina’s Department of Environmental Quality (formerly DENR) opposed the rule early on and in October of 2015 joined 23 other states in a lawsuit challenging the final rule. (More on the McCrory administration’s objections to the EPA rule here.) Both the states and several business/industry groups attacking the rule in separate lawsuits asked the federal court to issue a preliminary injunction (or “stay”) to prevent EPA from implementing the Clean Power Plan rule until the lawsuits are resolved.
On January 21, the federal Court of Appeals for the District of Columbia denied all requests to stay implementation of the Clean Power Plan rule. The court’s order did not discuss the basis for denial in detail; the court simply said the requests failed to meet the high standards for issuance of a preliminary injunction, citing the U.S. Supreme Court decision in Winter v. Natural Resources Defense Council (2008). First, the court must be persuaded that the plaintiff is ultimately likely to win the case. A court will not give a plaintiff the immediate advantage of a stay restricting the defendant’s actions if the plaintiff’s arguments are unlikely to win out in the end. Even if the court finds the plaintiff has a likelihood of winning the case, the court will not issue a stay unless the plaintiff also shows that:
— The plaintiff is likely to suffer irreparable harm if the court doesn’t issue a preliminary injunction. In this case, the plaintiffs had to convince the court that allowing EPA to move ahead with implementation of the Clean Power Plan rule would cause immediate harm to the plaintiffs and that harm could not be remedied by a later ruling in the plaintiffs’ favor.
— The balance of equities tips in the plaintiff’s favor. In very simplified terms, the plaintiffs had to show that a stay would do more good than harm.
— An injunction is in the public interest. The public interest standard can work in favor of either the plaintiff or the defendant depending on the case. In the Winter v. Natural Resources Defense Council case, the U.S. Supreme Court decided that a preliminary injunction was not in the public interest because it would have restricted a particular type of military training exercise.
Since the Court of Appeals for the D.C. Circuit did not provide specific reasons for refusing to stay the Clean Power Plan rule, it is impossible to know exactly which of those standards the plaintiffs failed to meet. The decision doesn’t necessarily mean the court thinks the state and business/industry plaintiffs have a weak case against the rule; failure to meet the other criteria could also lead to denial of a stay. It is probably safe to say, however, that the court did not believe the states or the business/industry plaintiffs will be harmed by allowing the Clean Power Plan rule to go into effect.
In asking for a stay, the states identified two kinds of harm — waste of state resources to comply with a federal rule that may be struck down by the courts and a much more nebulous harm to state sovereignty. On the question of potentially wasted state resources, EPA pointed out: 1. the federal rule gives states until 2018 to develop a state plan to meet the CO2 reduction targets; and 2. a state can also simply opt out and let EPA develop a CO2 reduction plan for its electric utilities. The first actual CO2 reduction target comes several years after approval of the state plans. The court seemed persuaded that the long planning and implementation timeline means states will not have to sink major, unrecoverable costs into Clean Power Plan compliance before the lawsuits are resolved.
It is hard to know what the court made of the somewhat novel argument that immediate implementation of the Clean Power Plan rule would irreparably harm state sovereignty. EPA pointed out that the Clean Power Plan rule gives states a lot of flexibility in developing plans to meet the CO2 emissions reduction targets. It is also difficult to argue the Clean Power Plan rule attacks state sovereignty without going to the next — much more radical step — of arguing that the federal government has no authority to regulate to protect air quality in the first place. In any case, if the federal court strikes down the Clean Power Plan rule as either unconstitutional or beyond EPA’s statutory authority that would seem to adequately remedy any hypothetical harm to state sovereignty.
The Court of Appeals agreed to expedite the Clean Power Plan lawsuits and set the case for hearing on June 2, 2016.
Practical effects — States will continue to face a 2018 deadline for submission of CO2 reduction plans. In one way, the impact on N.C. will be minimal because the state is already on a fast track to submit a plan to EPA in 2016. The catch, however, is that the plan proposed by N.C.’s Department of Environmental Quality relies entirely on tighter emissions limits for a small set of existing coal-fired power plants and will only result in a fraction of the CO2 reductions the federal rule requires. See another post for background on the McCrory administration’s intent to submit a plan that does not take credit for CO2 reductions associated with increased renewable energy generation and energy efficiency improvements already required under state law. The shortfall in CO2 reductions in the plan being prepared by DEQ will almost certainly result in EPA disapproval. Given the federal court’s denial of a stay, N.C.’s decision to deliberately fast track an unapprovable plan may mean the state will have to revisit the plan sooner rather than later.