Supreme Court Justice Antonin Scalia compared the Environmental Protection Agency's rulemaking to buying a Ferrari without looking at the price tag, and even claimed that a regulation that restricts mercury pollution from coal-fired power plants could hurt human health and the environment.
In a 5-4 decision Monday, the Court returned the case to the D.C. Circuit Court of Appeals on a technicality, siding with industry claims that the administration failed to consider the estimated cost of mercury and air toxics (MATS) regulation at an early enough stage in the rulemaking process. Scalia, writing for the majority, said that the “EPA strayed far beyond those bounds when it read to mean that it could ignore cost when deciding whether to regulate power plants.” To explain how the EPA failed its due diligence of estimating cost when it first deemed it "appropriate and necessary" to reduce mercury, Scalia wrote, “By EPA’s logic, someone could decide whether it is 'appropriate' to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system.”
Scalia’s analogy fails him, and not only because he compares a lifesaving regulation to a luxury item. The EPA did consider the costs of its Ferrari, but at the second stage of its rulemaking process, while it drafted the regulation. Justice Elena Kagan responded to Scalia’s argument in her dissent, joined by Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor:
“The comparison is witty but wholly inapt. To begin with, emissions limits are not a luxury good: They are a safety measure, designed to curtail the significant health and environmental harms caused by power plants spewing hazardous pollutants. And more: EPA knows from past experience and expertise alike that it will have the opportunity to purchase that good in a cost-effective way. A better analogy might be to a car owner who decides without first checking prices that it is “appropriate and necessary” to replace her worn-out brake-pads, aware from prior experience that she has ample time to comparison shop and bring that purchase within her budget. Faced with a serious hazard and an available remedy, EPA moved forward like that sensible car owner, with a promise that it would, and well-grounded confidence that it could, take costs into account down the line.
Scalia floated a fictitious, exaggerated scenario where the EPA regulated a pollutant at a benefit that’s 2,000 times smaller than the cost. “If (to take a hypothetical example) regulating power plants would yield $5 million in benefits, the prospect of mitigating cost from $11 billion to $10 billion at later stages of the program would not by itself make regulation appropriate," he wrote. "In all events, we need not pursue these points, because EPA did not say that the parts of the regulatory program mentioned by the dissent prevent the imposition of costs far in excess of benefits.”
In another section, Scalia echoed the coal industry's arguments. “It is not rational, never mind 'appropriate,' to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits,” Scalia wrote. From an industry brief: “No rational person would see spending $9.6 billion for $4 million to $6 million in return as an appropriate exchange.”
The MATS rule—which will remain in effect until the D.C. Circuit takes action on it—is one of the most expensive regulations of the Obama administration's EPA, costing an estimated $9.6 billion. But the agency found the boon to human health would account for anywhere between $37 billion to $90 billion each year—nine times the cost of imposing the regulation. (The challengers in Michigan v. Environmental Protection Agency had countered that the regulation only created $6 million in benefits.) Meanwhile, the EPA claims the rule would prevent as many as 11,000 premature deaths and 130,000 cases of asthma annually. The power plant sector is responsible for half of all U.S. mercury emissions and 62 percent of arsenic emissions, which can irritate the eyes, skin, and breathing and causes diseases and birth defects in the long run.
Scalia mentioned none of these health benefits. Instead, he suggested that the regulation might do more harm to human health than good: "EPA’s interpretation precludes the Agency from considering any type of cost—including, for instance, harms that regulation might do to human health or the environment."
Tom Donnelly, counsel with the Constitutional Accountability Center, noted, “This the first time that the Supreme Court has required the EPA to consider compliance costs for industry without any mention by Congress of such a requirement.”
This likely ensures yet another delay to a regulation that's been tied up for a very long time, even by Washington's standards. Congress first asked the EPA to decide whether it's “appropriate and necessary” to regulate air pollution 25 years ago, in an amended Clean Air Act in 1990. The Obama administration's MATS rule kicked in this April, after surviving a legal challenge in the D.C. Circuit last year. In the span of the last two decades, hundreds of thousands of people might have lived longer if regulations on mercury and other coal pollutants had not been tied up in court battles.