In a rare move, the U.S. Supreme Court stayed the U.S. Environmental Protection Agency's (EPA) Clean Power Plan even before the merits of the rule have been decided by the U.S. Court of Appeals for the District of Columbia Circuit, where the rule is currently under review. The Clean Power Plan calls for reductions in emissions of carbon dioxide from existing fossil fuel-fired power plants. The lower court previously denied requests to stay the rule pending the outcome of litigation. Objectors—including 27 states, coal companies, trade associations, utilities, and the U.S. Chamber of Commerce—then filed applications for a stay with the Supreme Court. 

After receiving responses from the EPA, 18 states, utilities, public health, and environmental organizations, in a brief order, the Supreme Court voted 5-4 to stay the Clean Power Plan. The vote reflected the Court's liberal/conservative divide, with Chief Justice Roberts and Justices Scalia, Kennedy, Thomas, and Alito voting to grant the stay, and Justices Ginsburg, Breyer, Sotomayor, and Kagan voting to deny the applications. The Court's order stays the Clean Power Plan until after the D.C. Circuit decides whether to uphold the rule or strike it down. If review of the D.C. Circuit's decision is sought in the Supreme Court, the stay will remain in effect until after the Supreme Court decides the case. Meanwhile, the D.C. Circuit—where 39 lawsuits filed by 157 parties challenging the rule are pending—will hear oral argument on the rule on June 2, 2016. It is highly anticipated that the Supreme Court will review the merits of any decision by the D.C. Circuit. We expect the Supreme Court to complete its review by June 2017, but procedural delays in the D.C. Circuit could push the Supreme Court's decision (and thus the resolution of the stay) back to 2018.

The Clean Power Plan's first compliance period does not begin until 2022, but the rule calls for states to submit initial plans to EPA by September 2016 and final plans by September 2018 describing how they will implement the rule and meet their emission goals. The stay order effectively eliminates the September 2016 deadline for submitting initial state plans. It is likely the Supreme Court will complete its review of the case before final state plans would have been due even without the stay. However, even if the Supreme Court ultimately upholds the rule, the stay could delay the submission of final state plans and could even delay the start of the first compliance period beyond 2022. 

Ballard Spahr's Environment and Natural Resources Group has extensive experience helping clients educate state and federal regulators as they develop rules affecting the clients' businesses. The Group also advises on federal and state compliance, permitting, development, business planning, and contamination matters arising in connection with environmental and natural resources laws and claims, and includes a particular focus on climate change and sustainability.

Copyright © 2016 by Ballard Spahr LLP.
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