Supreme Court Decides Ohio, et al. v. Environmental Protection Agency, et al.

On June 27, 2024, the U.S. Supreme Court decided Ohio, et al. v. Environmental Protection Agency, et al., Nos. 23A349, 23A350, 23A351 and 23A384. The Court stayed the enforcement of EPA’s rule against certain States pending the disposition of the States’ petitions for review in the U.S. Court of Appeals for the D.C. Circuit.

In 2015, EPA revised its air-quality standards, which required States to submit new State Implementation Plans (SIPs) to comply with EPA’s standards under the Clean Air Act. In 2022, EPA announced its intention to disapprove 23 States’ SIPs and proposed a single Federal Implementation Plan (FIP) to bind all 23 States. EPA sought to impose nitrous oxide emissions-control measures that maximized cost-effectiveness in achieving downwind ozone air quality improvements.

During and after the agency’s rule promulgation, several courts issued stays preventing the rule from applying to 12 of the 23 States. The remaining States and industry groups challenged the FIP in the D.C. Circuit. They argued EPA’s decision to apply the FIP to them, even after so many other States had dropped out, was arbitrary or capricious. The D.C. Circuit denied relief.

The Supreme Court concluded that EPA’s decision was likely arbitrary or capricious and stayed the enforcement of EPA’s rule while the parties’ appeals unfold. According to the Court, the problem with EPA’s final FIP stemmed from the way EPA chose to determine which emissions contributed significantly to downwind States’ difficulty meeting national ozone standards.

EPA’s plan rested on an assumption that all 23 States would adopt emissions-reduction tools, but the agency failed to offer a reasoned response to the applicants’ concern: “What happens — as in fact did happen — when many of the upwind States fall out of the planned FIP and it may now cover only a fraction of the States and emissions EPA anticipated?” Commenters on EPA’s rule raised this issue during the rule’s notice and comment period, but EPA’s final rule did not address the issue.

The Court rejected EPA’s argument that it had considered the concern when it added to its final rule a severability provision that stated the FIP would continue to be implemented without regard to the number of States remaining. Although the Court recognized that the provision may show EPA’s awareness of the concern, the provision did not provide an explanation. The Court reasoned that EPA needed to explain why it believed its rule would continue to offer cost-effective improvements in downwind air quality with only a subset of the States it originally intended to cover. The Court also held that EPA had notice of the applicants’ objection and that applicants were not required to return to EPA to raise a concern EPA already had a chance to address.

Justice Gorsuch delivered the opinion of the Court, in which Roberts, C.J., and Thomas, Alito, and Kavanaugh, JJ., joined. Justice Barrett filed a dissenting opinion, in which Sotomayor, Kagan, and Jackson, JJ., joined.