Administrative Agency Scope of Authority in Question

In West Virginia v. Environmental Protection Agency, 597 U.S. __ (2022), the United States Supreme Court faced the question of whether the Environmental Protection Agency (EPA) had the authority to regulate green gas house emissions, regardless of the industry, as long as it considers factors such as cost, non-air impacts, and energy requirements.  Specifically, the Court had to decide whether EPA’s use of Section 111 (d) of the Clean Air Act to implement an emission cap guideline by inevitably forcing plants to transition from non-renewable energy sources to renewable ones as part of the authority already granted by Congress to the agency.  Consequently, the Court’s decision would be based on how the justices view statutory interpretation, especially in the realm of administrative law.  The Executive sought ample powers to combat climate change without additional Congressional action considering the subject is divisive and there is little bipartisan support.

On June 30th, 2022, the Court decided that Section 111(d) did not grant EPA such authority.  The Court’s ruling was based on the major questions doctrine, which requires that an agency demonstrate a clear authorization of Congress for the authority it purports to hold.  The Court stated that, according to judicial precedent, there are “extraordinary cases in which the history and the breadth of the authority that [the agency] has asserted, and the economic and political significance of that assertion, provide a reason to hesitate before concluding that Congress meant to confer such authority.” See West Virginia v. Environmental Protection Agency, 597 U.S. ___ (2022) (quoting FDA v. Brown Williamson Tobacco Corp., 529 U.S. 120, 159-160).  The Court held that the EPA could only offer a vague authorization that was not close to the clear authorization required by judicial precedent.  Particularly, the Court determined that the agency only provided evidence of its authority “[t]o establish emissions caps at a level reflecting the application of the best system of emission reduction…adequately demonstrated.” Id. Consequently, the Court held that the EPA did not have such authority and that agencies, including the EPA, cannot implement regulations that have extensive social and economic impact without clear authorization from Congress to do so.

While the question in this case revolved solely around the agency’s authority to regulate carbon dioxide emissions, the Court’s use of the major question doctrine in interpreting statutes may impact how agencies can regulate the matters delegated to them by Congress.  In administrative law, courts would grant agencies deference, known as the Chevron deference, when interpreting statutes. Deference is given because agencies are thought to be the experts in the matter delegated to them.  If they do not act opposite to the powers delegated by Congress, they are better positioned to regulate those matters.  Yet, the question remains regarding how federal and state courts will now use the major questions doctrine in administrative law.  Specifically, it leaves questions as to how lower courts will interpret the phrase “economic and political significance” and would the use of the major question doctrine replace the Chevron deference. Will the major question doctrine be used as an alternative statutory interpretation method when an ordinary reading of a statute does not suggest Congress’s intent?

The potential effects of this ruling are important in both the state and federal level since it seems that agency regulations and decisions can now be subject to greater judicial scrutiny.  In Puerto Rico we have a recent tradition of local courts adopting administrative law interpretation and doctrines from federal case law.

Alfredo Fernández Martínez
787.522.0524
afernandez@delgadofernandez.com

Sashmarie Z. Rivera López
787.523.3819
srivera@delgadofernandez.com

Eduardo L. Hernández Freire
787.626.1855
ehernandez@delgadofernandez.com

If you have any questions about the matters addressed in this News Alert, please contact Delgado & Fernández, LLC.

This communication does not constitute legal advice and is distributed with the understanding that the author, publisher, and distributor of this communication are not rendering legal, accounting, or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use.  Receipt of this News Alert constitutes acceptance of these conditions.  This News Alert does not reflect the views or legal arguments of our clients.  This communication may be based on authorities that are subject to change and is not a substitute for professional advice or services. You should consult a qualified professional advisor before taking any action based on the information herein.  This communication does not create an attorney-client relationship.  Pursuant to applicable rules of professional conduct, this communication may constitute Attorney Advertising.  It is possible that you may not need an attorney to handle any or all the matters described in this alert. © 2022 Delgado & Fernández, LLC.  All rights reserved.