In West Virginia v. EPA, decided in June, the Supreme Court struck down EPA’s attempt to force a nationwide transition away from fossil fuel electricity generation to more renewables. In doing so, the Court resolved a Clean Air Act (CAA) interpretation question lurking at the Court since 2016 when it stayed the Obama Administration’s Clean Power Plan (CPP): does CAA Section 111(d) authorize EPA, in the interest of addressing climate change, to mandate “generation shifting” as part of the “best system of emission reduction”? In a 6-3 ruling, the Supreme Court held that it does not.

But the Court didn’t stop there, taking the opportunity to expressly recognize—for the first time—a “major questions doctrine” (MQD):

[I]n certain extraordinary cases, both separation of powers principles and a practical understanding of legislative intent make us reluctant to read into ambiguous statutory text the delegation claimed to be lurking there. To convince us otherwise, something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to clear congressional authorization for the power it claims.

Slip op. at 19 (internal citations and quotations omitted).

Further illuminating the notion of “extraordinary,” the Court noted that “precedent teaches that there are ‘extraordinary cases’ that call for a different approach—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. . .” Id. at 17. “Extraordinary grants of regulatory authority are rarely accomplished through ‘modest words,’ ‘vague terms,’ or ‘subtle device[s].’” Id. at 18. Where an agency asserts authority in this manner, the Court will require the agency to “point to clear congressional authorization for the power it claims.” Id. at 19 (internal quotations omitted). “The last place one would expect to find [such significant regulatory power over the nation’s electricity system] is in the previously little-used backwater of Section 111(d).” Id. at 26. This conclusion was, according to the Court, reinforced by the reality that Congress never adopted—and even expressly rejected—legislative proposals to create programs similar to the CPP. Id. at 27. 

By formally recognizing this doctrine, the Supreme Court placed federal regulatory agencies (and the regulated community) on notice that there is a category of significant agency actions—with a “plausible” or “colorable” basis in ambiguous statutes—that nevertheless run afoul of “common sense” notions of when clear statutory authority is required.

Concerning impacts to environmental law more generally, a key question will be whether federal courts and federal agencies take the MQD seriously. Will they consider this doctrine rarely or routinely?

It’s an open question, but the Supreme Court seems to have an open mind as to the range of circumstances in which the MQD should be employed. The Court placed the CPP among a list of five other cases over the last two decades involving “extraordinary circumstances” where agencies asserted “highly consequential power beyond what Congress could reasonably be understood to have granted,” including:

  • FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), where the Court held the FDA lacked power to ban tobacco products;
  • Gonzales v. Oregon, 546 U.S. 243 (2006), where the Court rejected the notion that the Attorney General could rescind medical licenses;
  • Utility Air Regulatory Group v. EPA, 573 U.S. 302 (2014), where the Court found that EPA’s air permitting programs for stationary sources did not encompass greenhouse gases;
  • Alabama Assn. of Realtors v. DHHS, 594 U.S. — (2021) (per curiam), where the Court held that DHHS’s disease prevention powers did not support a national eviction moratorium; and
  • NFIB v. OSHA, 595 U.S. — (2022) (per curiam), where the Court invalidated OSHA’s vaccine mandate.

Notably, in West Virginia v. EPA, the Supreme Court did not dwell long on whether Section 111(d) was ambiguous. In a footnote, the Court distinguished between so-called “ambiguity canons” of interpretation, which “merely instruct courts on how to choose between equally plausible interpretations of ambiguous text,” and the kinds of interpretative questions raised in the MQD context. Id. at 8 n.3. The Court found that the CPP was proper for application of MQD principles, not the traditional ambiguity principles like those found in Chevron (where agencies receive deference for reasonable interpretations of ambiguous statutes). For the Court, EPA’s attempt to employ an obscure statute to “restructur[e] the Nation’s overall mix of electricity generation” was an easy case for using the MQD.

In the past, EPA and other federal environmental and resource agencies may have felt comfortable taking aggressive regulatory positions in hopes that Chevron deference would save them from judicial scrutiny. At least for truly economically-significant or politically-sensitive regulations built upon longstanding and ambiguous statutes, agencies will need to proceed with caution where new rules lack a clear statutory basis. Where a clear statement in the statute is lacking, agencies may need to seek authority from Congress, which is obviously the point that the Court is ultimately making here. Separation of powers requires respect for the lawmaking function of Congress.

Agencies may also want to be more modest when heralding the “significance” of new environmental regulations where the statutory basis for the power is not crystal clear. While agencies are out looking for clear statements in statutes, the public should be on the lookout for attempts by agencies to simply cloak modest statutes with a “clear statement” covering.

The MQD may be at the forefront of legal debates on a host of environmental issues even beyond the Clean Air Act and climate change contexts. For example, some have already raised MQD concerns with the SEC’s climate disclosure proposals. Various other financial regulatory agencies have also been tasked with incorporating climate-based concerns into their decisionmaking. Others have suggested that the Corps of Engineers’ longstanding attempts to extend federal jurisdiction under the Clean Water Act could implicate the MQD. And the Biden Administration’s focus on using a “whole of government” approach to tackling ESG, climate, PFAS contamination, and other issues may also eventually require consideration of potential MQD-based limitations. Indeed, any time there is a disconnect between an agency’s core competency or a statute’s primary purpose and that agency’s attempt to tackle a major policy issue, the MQD may be viewed as a potential restraint. In that regard, the field of environmental law may prove fruitful for those interested in seeing greater use of the Major Questions Doctrine.

Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. To join the debate, please email us at info@fedsoc.org.