Legal Challenge to EPA’s Proposed Clean Power Plan Rejected as Premature, Final Rule Sent to OMB for Review

The proposed Clean Power Plan introduced by the U.S. Environmental Protection Agency (EPA) in June 2014 has been met with considerable opposition, including a court battle that pitted energy companies and more than twenty States against each other in an effort to prevent the agency from implementing a final rule mandating the reduction of CO₂ emissions from existing power plants.  On June 9, the D.C. Circuit Court of Appeals issued its opinion in In re: Murray Energy Corp., No. 14-1112 (consolidated with other cases) denying the petitions for review and a writ of prohibition on the basic principle that the court does not have authority to review a proposed agency rule.  Petitioner Murray Energy, joined by a dozen states, argued that the EPA does not have authority under the Clean Air Act to limit carbon dioxide emissions from existing power plants and sought court action to prevent the EPA from issuing the final rule.  Although all three Circuit Court Judges agreed to deny the petitions, Judge Henderson disagreed with the majority view that the court was powerless to act.  Judge Henderson opined that the All Writs Act provides the court with the necessary authority to act and issue a writ of prohibition.  Nonetheless, she concurred in the judgment on the finding that it would be inappropriate, particularly in light of the expectation that the EPA would issue the final rule shortly after the court’s opinion in the matter was issued.  In the court’s view, the unfortunate reality that companies incur costs associated with compliance while wading through the rulemaking process is a collateral consequence that will not justify early review of a proposed rule.

The EPA has reported that the final Clean Power Plan rule was sent to the White House Office of Management and Budget (OMB) for review on June 1, 2015.  The agency’s projection is that the final rule will be published in August.  Those with standing will be able to challenge the legality of the final rule at that point, and we can expect to see continued, significant opposition to the Plan.