WASHINGTON — The Supreme Court on Wednesday seemed closely divided over the fate of one of the Obama administration’s most ambitious environmental initiatives.
The case concerns Environmental Protection Agency regulations adopted in 2012 that set limits on emissions of mercury and other toxic pollutants from coal-fired power plants. Environmental groups celebrated the measure as perhaps the greatest clean-air achievement of the Obama administration’s first term.
But industry groups and a score of states said the regulations imposed crippling and unwarranted expenses. They sued, saying the administration had violated the Clean Air Act, which required the regulations to be “appropriate and necessary,” by failing to undertake a cost-benefit analysis.
In their Supreme Court brief, Michigan and other states said the agency’s “decision that it is ‘appropriate’ to achieve $4 to $6 million in health benefits at a cost of $9.6 billion is not reasonable, imposes great expenses on consumers, and threatens to put covered electric utilities out of business.”
The agency responded that the Clean Air Act does not demand that costs be taken into consideration early in the regulatory process, when it determines whether certain pollutants are dangerous. It does consider costs later in the process, the agency said, when it sets emissions standards.
In its brief, the agency said the benefits would exceed the costs by between $27 billion and $80 billion each year. “Those quantifiable benefits,” the brief said, “include the prevention of up to 11,000 premature deaths each year.”
A divided three-judge panel of the United States Court of Appeals for the District of Columbia Circuit ruled last year that the agency’s interpretation of the Clean Air Act was reasonable.
“For E.P.A. to focus its ‘appropriate and necessary’ determination on factors relating to public health hazards, and not industry’s objections that emission controls are costly, properly puts the horse before the cart,” Judge Judith W. Rogers wrote for the majority.
In dissent, Judge Brett M. Kavanaugh said that in context, the statute required attention to costs “as a matter of common sense, common parlance, and common practice.”
“To be sure,” he continued, “E.P.A. could conclude that the benefits outweigh the costs. But the problem here is that E.P.A. did not even consider the costs. And the costs are huge, about $9.6 billion a year — that’s billion with a ‘b’ — by E.P.A.’s own calculation.”
The case is the latest in a series of challenges from industry groups to the Obama administration’s environmental agenda. In the term that ended in June 2014, the justices heard cases on two other sets of environmental regulations — one aimed at limiting power plant pollution that wafts across state lines, the other at cutting planet-warming greenhouse gas emissions.
The E.P.A. won the first case and largely prevailed in the second, though the Supreme Court indicated that it remained prepared to impose limits on the agency’s regulatory authority.
Wednesday’s argument concerned three consolidated cases: Michigan v. Environmental Protection Agency, No. 14-46; Utility Air Regulatory Group v. Environmental Protection Agency, No. 14-47; and National Mining Association v. Environmental Protection Agency, No. 14-49.
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