This commentary originally appeared in The Federalist on July 8, 2015.
The decision in King v. Burwell left many Americans feeling that some laws were more equal than others. Yet there may be a silver lining.
Justice John Roberts, in sidestepping the Chevron deference test and flatly ignoring the plain meaning of the statutory language in the Affordable Care Act (ACA), may have handed the states the keys to the vehicle that they will drive over the Environmental Protection Agency (EPA), and through the heart of its Clean Power Plan (CPP).
If, under Burwell, congressional intent is on the table and open for judicial interpretation (or activism), the beginning of the Clean Air Act (CAA) presents a statutory challenge that the EPA will not easily overcome. In a relevant part, the “Congressional Findings and Declaration of Purpose” states, “air pollution prevention … and air pollution control at its source is the primary responsibility of States and local governments[.]” (emphasis added). This is meaningful because the EPA is seeking to nationalize the entire American electric grid through CPP.
In 1984, the Supreme Court established a two-part test for analyzing an agency’s interpretation of ambiguous statutory language in Chevron USA Inc. v. Natural Resources Defense Council, Inc.[1] In what has become known as “Chevron deference,” a court must first ask if the statute is ambiguous, then, if so, is the agency’s interpretation reasonable?
As Justice Scalia states in the majority opinion in Michigan v. EPA, “Chevron allows agencies to choose among competing reasonable interpretations of a statute[.]” Deference under Chevron affords agencies wide latitude in interpreting law. Recently, however, deference has amounted to agency-created law, rather than simple clarifications. As the Supreme Court noted in Burwell, “a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in statutory gaps.” Nevertheless, Justice Roberts went on to say that in some instances, “there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.”
Simply, the importance of Chevron deference cannot be overstated, nor can the court’s refusal to use it in King v. Burwell.
King v. Burwell Unsettles Chevron Deference
The dispute in King v. Burwell centers on the Internal Revenue Service’s interpretation of the ACA, and the language of the law itself. The disputed provisions of the ACA establish tax credits for low-income Americans that are available to residents of a state that created its own health-care exchange. For the 34 states that refused to create a state exchange, and where a federal exchange was set up instead, the challengers in Burwell claimed federal tax credits were not allowed because those exchanges were not “established by the state”—they were established by the federal government.
In what dissenting Justice Scalia refers to as a “bit of interpretive jiggery-pokery,” the majority opinion attempts to justify why years of Supreme Court precedence was overlooked, and instead, why the court would now look to congressional intent and correct the ACA themselves, where “inartful drafting” excluded residents of states with no state created exchange. Certainly, the plain language of the law meant states that didn’t set up exchanges could not get federal tax credits. However, to Justice Roberts, a “rigorous application of the canon does not seem a particularly useful guide to a fair construction of the statute.”
From the ashes of the decision in Burwell a glimmer of hope arises. If Chevron deference to agency interpretation can be easily evaded to interpret congressional intent, and plain meaning applied when our highest court finds it convenient, the progressive sword, which dealt the fatal blow to state sovereignty through nationalized health care, may yet be wielded against the EPA to strike down CPP.
If the Supreme Court’s precedents can still be trusted, that they “cannot interpret federal statutes to negate their own stated purposes,” the EPA will face an uphill battle in with its brazen attempt to nationalize the entire American electric grid through the CPP.
The EPA’s Plan Relies on Rewriting the Law
CAA authorizes EPA to regulate pollutants at the physical source of the emissions from individual industrial facilities—commonly described as “inside the fence” of the power plant. Yet, the core measures in EPA’s proposed CPP require wide-ranging actions “outside the fence” extending—state by state—to the entire national system of electric generation. Once EPA asserts authority beyond the source, “inside the fence,” EPA’s power to compel lacks a limiting principle under the law.
To wit, through the CPP, the EPA seeks to dictate the energy mix used in each state by setting a “state goal” for emissions that would be infeasible for most of the existing coal-fired electric generation. In setting state goals, the EPA would effectively change how energy is generated, consumed, and transmitted across the country, having calamitous effects on grid stability and cost, while affecting “climate change” infinitesimally (0.02ºC, according to EPA).
EPA’s justifications for this unconstitutional power grab were weak to begin with, but King v. Burwell appears to erode the soil beneath its feet. Unlike the ACA, where Congress passed a new law in 2010, EPA is attempting to nationalize the nation’s system of electric power under the CAA, enacted in 1970 and last amended in 1990. Relying on Chevron, EPA tries to establish legal authority for the CPP through a specific section of the CAA, §111(d), claiming that the 1990 amendments provide them broad regulatory authority to fill purported statutory gaps in such a way that EPA would now be able to “cover the full range of dangerous emissions from stationary sources.”
But that’s not how the law works. Under the CAA if a stationary source (power plant) is regulated under §112 it may not be regulated by §111(d)—since 2000 EPA has regulated power plants under §112. Power plants are regulated by §112 of the CAA and have been since 2000. If a source is regulated by §112, it may not be regulated by §111(d) under the plain statutory language of the CAA—a fact that EPA itself admits. Moreover, §112 of the CAA that regulates power plants lists 188 pollutants and creates programs to protect against them. Notably absent from that list is CO2.
To pursue this power grab to its illogical ends, the EPA has extended yet another absurdity: that two distinct versions of §111(d) now exist as a result of the 1990 amendments to the CAA. The fact that the U.S. Code reflects only one version does not dissuade them. The EPA is claiming ambiguity that does not exist in order to rewrite the CAA.
How Burwell Undermines the EPA’s Plan
In light of Burwell, there now appears to be three tests through which the Supreme Court can justify the outcome of its choosing. Herein lies the rub. First, pursuing plain meaning alone, the EPA’s attempt to impose the CPP will fail. Agencies are obligated to harmonize statutory ambiguity where present, but not to create ambiguity in order to usurp congressional authority.
Section 112 of the CAA is nothing if not explicit, and the imagined ambiguity of multiple versions of §111(d) would have vast implications for U.S. Code as a whole. It is far from uncommon to have one version of a statute mooted by another and it has always been an accepted practice to harmonize the versions in order to prevent ambiguity rather than promote it.
Second, deference under Chevron may only be invoked where there is actual ambiguity; where more than one meaning is possible, reasonable agency interpretation may be upheld. “[Chevron] does not license interpretative gerrymanders under which an agency keeps parts of statutory context it likes while throwing away parts it does not.”
The CPP relies on Chevron to create law, not to gap-fill. Had Congress intended the EPA to regulate CO2 from existing sources, Congress could have provided them that ability. Instead, Congress clearly and unequivocally stated that regulation under §111(d) could only occur if the existing source was not already regulated by §112 of the CAA.
Lastly and remarkably, it seems that the decision in Burwell affords even less ground for the EPA to retreat to. The EPA will no doubt argue that §111(d) and §112 should be read alone—that interpretation of the law should only be derived only from those sections in isolation—and perhaps they should focus on this argument given that the court in King v. Burwell showed its willingness to look to the entirety of the questioned statute and interpret congressional intent.
But if applying Burwell to the CPP, the question becomes: what is a fair construction of the Clean Air Act? The congressional findings—“that air pollution prevention … and air pollution control at its source is the primary responsibility of States and local governments”—should prove an insurmountable feat (emphasis added). The EPA will find little solace under Chevron or a plain-meaning interpretation of the Clean Air Act. Fortunately, if, like in King v. Burwell, the Supreme Court finds it necessary to “turn to the broader structure of the Act to determine meaning of the section,” it will be clear: the states have primary responsibility.
Leigh Thompson is a policy analyst with the Armstrong Center for Energy and the Environment at the Texas Public Policy Foundation.