Failure to Provide Notice to Excess Insurer Dooms Insurance Recovery for Environmental Settlement
Jenner & Block Webinar: The Top Environmental, Health and Safety Issues for 2016 - What You Need to Know

Supreme Court Grants Stay of Clean Power Plan

Torrence_Allison_COLOR By Allison A. Torrence


In an unusual step, on Tuesday, February 9, 2016, the U.S. Supreme Court granted a stay of EPA’s “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” 80 Fed. Reg. 64,662 (October 23, 2015) (a/k/a “the Clean Power Plan”). The stay is unusual because the challenges to the Clean Power Plan are still before the D.C. Circuit Court, which denied a request for a stay in January.

There have been more than 15 separate cases filed challenging EPA’s Clean Power Plan, which was finalized in October 2015. Opponents of the Clean Power Plan – twenty-nine states, operators of coal-fired plants, and other companies in the coal industry – have raised numerous legal theories in their challenges to the GHG rules, including that that EPA is overstepping its authority under Section 111(d) of the Clean Air Act to regulate broad segments of the economy. The cases have been consolidated and are being litigated on an expedited basis before the D.C. Circuit Court. The court has scheduled the hearing for these cases on June 2, 2016, and a decision is expected by late summer or early fall of this year.

Five groups that are challenging the Clean Power Plan in the D.C. Circuit sought relief from the Supreme Court after their stay request was rejected by the lower court. Five Justices agreed to grant the stay, with Justice Ginsburg, Justice Breyer, Justice Sotomayor, and Justice Kagan stating that they would deny the application for a stay.  

The first deadline under the Clean Power Plan is September 2016, when states are required to submit to the EPA their draft plans for compliance or request a 2-year extension. Compliance plans must be finalized within the next two years and compliance deadlines for industry are phased in starting in 2022. The parties seeking the stay argued that they would have to start getting ready to comply with GHG limits now, which could entail significant new investments or closure of certain power plants. The Supreme Court’s stay means that EPA will not be able to enforce the September deadline or any future deadlines until the legality of the rules is determined by the D.C. Circuit and then, likely, by the Supreme Court. EPA and the Obama Administration have expressed disappointment with the Supreme Court’s ruling and are continuing to defend the Clean Power Plan in court.