With the Supreme Court handing down significant rulings on such issues as housing, Obamacare, and same-sex marriage, it’s not surprising other decisions handed down last month received less attention. A prime example is the defeat the Court handed to President Obama administration’s agencies.
In the 5-4 ruling, the Supreme Court recently struck down forthcoming EPA regulations concerning emissions of mercury and other toxins at power plants. the Court pointed out that the EPA did not properly consider the costs of regulating such emissions from coal-fired power plants before imposing the regulations.
Congress had previously authorized the EPA to take any “appropriate and necessary” action to regulate power plants. In this case, the EPA found power plant regulation to be “appropriate” since the plants’ emissions pose risks to the environment and because controls capable of reducing these emissions were available. The agency also found regulation “necessary” because the imposition of other Clean Air Act requirements did not eliminate those risks.
But five of the nine justices found the EPA had failed to due diligence. “Read naturally in the present context, the phrase ‘appropriate and necessary’ requires at least some attention to cost,” wrote Justice Scalia in his opinion for the Court. “One would not say that it is even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.”
According to the Court ruling, the regulations would cost around $9.6 billion a year, but the quantifiable benefits from the resulting reduction in hazardous-air-pollutant emissions would be $4 to $6 million a year. The Court ruled that the EPA “must consider cost—including cost of compliance—before deciding whether regulation is appropriate and necessary.” The justices left it to the EPA, though, to “decide (as always, within the limits of reasonable interpretation) how to account for cost.”
Perhaps even more important than the common-sense consideration of how regulations should be decided in this case is the Court’s willingness to put a check on the regulatory agencies. As Justice Thomas wrote in his concurrence:
Although we hold today that EPA exceeded even the extremely permissive limits on agency power set by our precedents, we should be alarmed that it felt sufficiently emboldened by those precedents to make the bid for deference that it did here. As in other areas of our jurisprudence concerning administrative agencies, we seem to be straying further and further from the Constitution without so much as pausing to ask why. We should stop to consider that document before blithely giving the force of law to any other agency “interpretations” of federal statutes.