Yesterday the Supreme Court granted certiorari in Environmental Defense v. Duke Energy Corp.. The case arises out of an EPA enforcement action against Duke, alleging violations of the Clean Air Act's New Source Review (NSR) provisions and applicable regulations. Duke prevailed in the district court and before the U.S. Court of Appeals for the Fourth Circuit. (Here is the decision below.)
What is particularly surprising is that the Supreme Court granted the petition filed by environmental group intervenors over the objection of the United States. While the federal government maintained the Fourth Circuit's decision was wrong (and the Justice Department filed an unsuccessful petition for en banc review), the Solicitor General's office argued that Supreme Court review was unwarranted because there was no "square conflict among the courts of appeals" and the EPA was proceeding with additional NSR regulatory proposals that would render the Fourth Circuit's opinion largely irrelevant for future cases. At least four justices found these arguments (and those proffered by Duke Power) unpersuasive, and voted to grant. As Georgetown law professor Richard Lazarus observes, this is "only the third time the Court has granted review at the exclusive request of an environmental organization to hear a case fully on the merits. The other two were standing cases: Sierra Club v. Morton and Friends of the Earth v. Laidlaw."
It is unlikely four justices voted to grant cert because of any burning desire to delve into the complexities of NSR regulation. Rather, it appears the grant was driven by the claim that the Fourth Circuit's decision violated the Clean Air Act's jurisdictional provisions, which grant the U.S. Court of Appeals for the District of Columbia Circuit exclusive jurisdiction over challenges to Clean Air Act regulations of national application. The Fourth Circuit panel, rather than upholding the district court's opinion rejecting the EPA's enforcement action on the various grounds initially urged by Duke Power or supporting amici (of which I was one), held that the Clean Air Act required the EPA to interpret its applicable regulations in a particular way. This holding, Environmental Defense argued, effectively invalidated the applicable EPA regulations, and therefore exceeded the Fourth Circuit's jurisdiction. Moreover, ED maintained, the Fourth Circuit's ruling was in tension, if not direct conflict, with a nearly contemporaneous D.C. Circuit decision involving direct challenges to the relevant EPA regulations.
The cert grant places the federal government in an interesting position. As Professor Lazarus observes, the EPA essentially wanted to walk away from this enforcement action (as it seems to have wanted to walk away from many NSR enforcement cases brought under the Clinton Administration). With this grant, the Supreme Court said no. Having argued both that the Fourth Circuit was wrong and that certiorari was unwarranted, one would expect the Justice Department to revert to its original position, defending the EPA's actions and arguing that the Fourth Circuit had no jurisdiction to rule as it did. A remaining question whether the Supreme Court will confine itself to addressing the jurisidicational question, or will wade more deeply into the intricacies of NSR. I would expect the former, but time will tell.