Supreme Court rulings offers new playbook to polluters

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Over the past week, the U.S. Supreme Court handed down four decisions bound to upend federal energy and climate regulations.

The first blow to the Biden administration’s pollution-cutting rules came Thursday, when the court ruled 6-3 to block the U.S. EPA from enforcing its “good neighbor” emissions regulation. The rule was finalized last year and aimed to restrict power plant and industrial pollution that travels over state lines.

The second came in the 5-4 ruling overturning the Chevron deference, which has its origin in a fossil-fuel-related case 40 years ago. The Natural Resources Defense Council had challenged the Reagan administration’s polluter-friendly interpretation of the Clean Air Act, and the Supreme Court ruled that judges should generally defer to federal agencies when statutes are ambiguous. Now, the case’s reversal opens a new legal playbook for challenging federal regulations if they venture beyond the letter of the law, potentially delaying or derailing efforts by the U.S. EPA to curb power plant emissions or FERC to spur new transmission lines.

Two other rulings could meanwhile invite more lawsuits over longstanding federal rules, and make it harder for agencies to fine rule violators.

In one, the conservative majority found a hedge fund manager facing Securities and Exchange Commission fraud charges was first entitled to a jury trial. Legal observers tell E&E News that the ruling could make it harder for federal energy regulators to levy civil penalties, especially against well-funded energy companies. 

And in another 6-3 ruling, the court decided companies affected by federal rules could challenge them in court, even if they’ve been in place for decades. In her dissent, Justice Katanji Brown Jackson warned it could open up regulatory agencies to a “tsunami of lawsuits.”

None of these rulings are a surprise given the conservative supermajority on the court. But they’re likely to be a problem as the Biden administration continues to roll out and preserve its climate agenda — especially if a new administration takes over next year.

— Kathryn Krawczyk

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