Yes, Scalia Messed Up. But He Was Right. Sort of. (Although not about his claim that in 2001 the EPA was masquerading as a trucking association and arguing both sides of a lawsuit.)

(Important update below.)

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Well, I’m sure y’all have heard by now about Scalia’s hilarious confusion of the EPA with the American Trucking Association, even if you didn’t read this post of mine about.  The two cases at issue are Whitman v. American Trucking Associations., from 2001, and EPA v. EMA Homer City Generation, the case decided earlier in the week in which Scalia, in his dissent, accused the federal gummint of trying get away with something in Whitman that in fact the Trucking Association was trying to get away with. Yikes.

At the heart of these cases is a Court-created doctrine called the Chevron doctrine. I’ve mentioned it here at AB a few times and would not be mentioning it again–trust me!–except that Harvard Law professor/Bloomberg Law writer Noah Feldman has an article at Bloomberg today that pretty much sums up the 2001-opinion-vs.-this-week’s-opinion stuff, and the doctrine he describes but does not identify by name is the Chevron doctrine.  The article is headlined “Yes, Scalia Messed Up. But He Was Right.”.

That title, though, which probably was written by a headline writer at Bloomberg, isn’t complete. Feldman says Scalia was partly right and partly wrong. (Okay, okay; what do I expect from a headline?!)  Yes, Feldman says, there is a tension between the Court’s claim about the specificity of the section of the Environmental Protection Act at issue in Whitman and the (different) section of that statute at issue in EMA, because the two sections are pretty equally specific (or nor) about what the EPA can consider.  And Scalia was right to point that out.

But, he says, the actual respective issues in the two cases were significantly different from each other.  In Whitman, the issue was whether the EPA was required to make a cost assessment before ordering compliance with EPA environmental standards. The agency said it did not, and in a unanimous opinion written by Scalia the Court said it did not.  In EMA, by contrast, there apparently was no question but that air pollution in the state downwind of the power plant at issue was higher than permissible under EPA regulatory standards, and also apparently no dispute that some of the pollution was coming from the power plant.  The EPA apparently saw the case as entirely about whether the power plant company could be forced to contribute to the cost of reducing the level of air pollution in the downwind state.

(I used all those qualifiers, like “apparently,” in that last paragraph because I have no expertise whatsoever in environmental law and because I haven’t read either the majority opinion written, by Ruth Bader Ginsburg, or Scalia’s dissent, joined by Clarence Thomas, who probably would have joined Scalia’s dissent even if it had claimed that the federal gummint back in 2001 was impersonating plaintiff Vladimir Lenin. (Okay, especially if it had.)

Someone, whether the corporate person who challenged the EPA ruling or instead the sovereign downwind state (who are people only when they want to be), was going to pay the costs to reduce the pollution.  And the EPA apparently argued that the sovereign downwind state should be assisted in this by the corporate person that was causing some of the pollution, even though that corporate person resides in another sovereign state. Remember: I don’t actually know anything about this case. But Feldman does. He explains:

The answer to why the EPA wanted to weigh costs in setting the good neighbor rule is more complicated. In her opinion, Justice Ginsburg explained the EPA was primarily concerned with allocating costs fairly among different states that might have in the past spent different amounts on reducing pollution. Considering cost was therefore a solution to what she called an “allocation problem.” Equity, not efficiency, was driving the bus. Because the EPA didn’t think of itself as setting standards to protect the environment directly, just as distributing costs among different actors, it didn’t mind weighing costs and benefits in this case.

There’s a lesson here for how the environmental community thinks about cost-benefit analysis: not as a mechanism for identifying the right amount of environmental protection, but as a tool for handing out the burdens fairly. To Scalia, this might well be a distinction without a difference; but to the EPA, it’s what separates clean air from the question of who pays for it.

But in my opinion (which isn’t worth much; I don’t know anything about the law or the case!), the tension between Whitman and the majority opinion in EMA–a tension solely concerning the specificity of the two respective statutory sections at issue in the two cases–is beside the point, if, as Feldman says, there was no dispute about excessive air pollution and that the power plant was a significant cause.  The dispute concerned only who would pay for the necessary reduction in pollution. If I understand him correctly, this is what Feldman is saying, too.

If I’m not mistaken, though–and I may well be–what Scalia really is arguing is that the EPA violated the rights of a power company that is entitled to invoke its state’s sovereignty, which could be abridged by a regulatory change allowing the EPA to consider costs, but which hasn’t been abridged because there has been no such regulatory change.

That regulatory change will have to await a Koch-sponsored White House administration.  As Feldman points out, when the issue is whether or not there will be a change ordered at all, rather than who will pay for the change, it is the corporate folks who insist that the EPA must make a cost analysis before ordering a reduction in (or bar to) pollution.

I don’t really understand this apples-and-oranges conflation of these two separate issues, in two separate, unrelated contexts that use the word “cost.”  It seems to me that the “good neighbor” provision of the statute–the statutory section at issue in EMA–has as its very purpose exactly what was at issue in that case: allocation of costs between neighbor states and communities. But what do I know?  Maybe I should read the opinion and dissent in EMA. But I probably won’t. Instead, I’ll just wait until Scalia explains this conflation the next time he speaks at some law school or to an interviewer. I’m sure it won’t be a long wait.

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UPDATE: Reader Bloix posted this terrific comment to my post this morning:

Bloix

May 4, 2014 4:32 am

Here’s the problem the EPA faced:

Suppose the permissible level of air pollution is ten. Suppose downwind State D has a level of 12, all caused by pollution sources in upwind states A, B, and C. Suppose A contributes 5, B contributes 4, and C contributes 3.

The EPA must impose regulations to bring the amount in D to 10, and it must do so by regulating the sources that contribute “significantly” to the violation. Not contribute significantly to the pollution – to the violation.

Obviously, each upwind state contributes significantly to the pollution. But do all of them contribute significantly to the violation? After all, if State A stopped polluting entirely, then B and C could keep on polluting with no reduction and D’s air would be in compliance. And the same is true for B and C.

EPA thinks that it can use cost benefit analysis to bring the level into compliance without violating the statute, even if that means requiring no reduction for some upwind states. So, if State A’s polluting sources can be reduced from 5 to 3 for a million dollars a point, but reducing State B’s contribution costs $10 million a point and State C costs $100 million a point, the EPA will require State A’s sources to cut two points from their pollution. The pollution is reduced to 10 and the problem is solved for $2 million.

But, Scalia says, “significant” means you look at the pollution, not the cost of cleaning up. So you must reduce the costs pro rata. From 12 to 10 is a 16.67% cut, so each upwind source must reduce by that much: State A must go from 5 to 4.17, State B from 4 to 3.33, and State C from 3 to 2.5.

This will cost $57.53 million, which is an insane imposition a deadweight loss of $55.53 million on private businesses. It also enacts a penalty on states that have been out front in reducing pollution – the reason it costs so much more to reduce pollution in State C is that C has already enacted regs imposing the cheap controls that State A hasn’t bothered with.

But Scalia says it must be done, because the word “significant” does not allow for costs to be taken into effect.

Does Scalia really believe this? And do the companies opposing the regs really want to force the waste of $55 million (or, in real life, many billions?)

No, of course not. What they want is to make the regulations unworkable. And requiring pro rata reductions without regard to cost would be so expensive and so obviously unfair that genuine progress in reducing upwind pollution would become very difficult if not impossible. That is the whole point of Scalia’s position.

Again: I wasn’t joking when I said in my post that I know nothing to speak of about environmental law (I wish I did), and that I know very little about this case–or did until I read about the argument in the case last week; now I know more, but not all that much more.  I do, as I said, know a bit about the Chevron doctrine, which is the Supreme Court-created doctrine that sets out the permissible parameters of federal regulatory agency regulations.  But Bloix, who to my knowledge is not a regular AB reader or comment poster, sure does know a lot about this particular case and relevant environmental law, or so it certainly appears. (And now that I’ve read his comment, I know more than I did.)

I’m not sure how he happened upon my post, but I’m glad he did.  (“Regs,” by the way, is legalese shorthand for “regulations,” as I learned the hard way when in my first year of law school one of my profs started babbling away one morning, when I still needed another cup of coffee or three, about “the regs.”  I sat there suppressing a yawn and saying to myself: “What the hell are ‘the regs?’”  And eventually, “Ahhh. The regulations.”) — 4/4

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