American Lung Association v. Environmental Protection Agency, No. 19-1140 (D.C. Cir. 2021)

The Environmental Protection Agency (EPA) adopted the 2019 Affordable Clean Energy Rule (ACE Rule), 84 Fed. Reg. 32,520, repealing and replacing the Clean Power Plan as a means of regulating power plants’ emissions of greenhouse gases. The Clean Power Plan was an Obama-era standard that set the first limits for climate change pollution from existing power plants. The EPA considered its authority under the Clean Air Act, 42 U.S.C. 7401, 7411 to be confined to physical changes to the power plants themselves. The ACE Rule determined a new system of emission reduction for coal-fired power plants only and left unaddressed greenhouse gas emissions from other types of fossil-fuel-fired power plants, such as those fired by natural gas or oil. Several groups challenged the action.

The D.C. Circuit vacated the ACE Rule, which expressly rests on the incorrect conclusion that the plain statutory text foreclosed the Clean Power Plan so that complete repeal was “the only permissible interpretation of the scope of the EPA’s authority” under section 7411. The error prevented full consideration of the statutory question and of measures other than those that apply at and to the individual source. The ACE Rule’s amendment of the regulatory framework to slow the process for the reduction of emissions is arbitrary and capricious.