On Monday, June 29, 2015, the U.S. Supreme Court issued a 5-4 opinion in Michigan v. EPA, holding that the EPA must consider costs to the regulated industry in determining whether limiting mercury in power plant emissions is “appropriate and necessary”, in the words of the Clean Air Act. The decision reverses a ruling of the D.C. Circuit Court upholding EPA’s mercury regulation and sends the litigation back to the Circuit Court for further proceedings.

The specific regulation at issue is known as MATS (mercury and air toxics standards) and requires power plants to comply with emission limits on mercury and other common toxic pollutants produced by fossil fuel-fired electric generation. The original deadline for compliance was April 16, 2015, but many plants received extensions providing extra time to install scrubbing equipment or shut down.  The EPA estimated that compliance with the regulations would cost “nearly $10 billion a year,” but did not “consider whether the costs of its decision outweighed the benefits.”

There is disagreement over what will become of the MATS regulations while the Circuit Court considers the case further. The regulations may remain in force awaiting the lower court’s decision and/or the EPA may be required to conduct a full analysis of the public health and environmental benefits versus the costs of compliance borne by power generators if regulation of emissions from plants is deemed “appropriate and necessary.”

Justice Scalia authored the majority opinion joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Alito with a concurrence by Justice Thomas. Justice Kagan wrote the dissent joined by Justices Ginsburg, Breyer, and Sotomayor.

For more information, contact Phillip Hoover.