Newly confirmed U.S. Supreme Court Justice Brett Kavanaugh is no stranger to cases involving federal regulations for the energy sector.
While he was a judge with the U.S. Court of Appeals for the District of Columbia Circuit, Kavanaugh weighed in on some of the most pivotal issues impacting energy producers in the past decade, including the U.S. Environmental Protection Agency's efforts to regulate mercury and greenhouse gas emissions.
Below is a recap of Kavanaugh's views and decisions on some of the most consequential legal cases for the energy industry during his time at the D.C. Circuit, where he has served since 2006.
In December 2012, Kavanaugh dissented from a majority decision upholding EPA regulations for greenhouse gas emissions from power plants.
In his dissent, Kavanaugh called the task of dealing with climate change "urgent and important." But he disagreed with the EPA's move to regulate greenhouse gases from power plants under the Clean Air Act's Prevention of Significant Deterioration, or PSD, provisions. Kavanaugh said the PSD program was meant to ensure compliance with National Ambient Air Quality Standards, which were established for six criteria pollutants that do not include greenhouse gases.
Expanding the PSD program to regulate greenhouse gases, which are emitted in much larger amounts than criteria pollutants, would mean "a far greater number of facilities would fall within the Prevention of Significant Deterioration program and have to obtain pre-construction permits," Kavanaugh said. "That in turn would impose significantly higher costs on businesses and individuals that are building new commercial or residential property."
Kavanaugh also objected to the EPA's attempt to get around that problem by essentially rewriting the PSD permitting language.
The Clean Air Act establishes a maximum level of emissions a facility can emit per year without applying for a permit under the PSD program. To reduce the number of regulated facilities under its new greenhouse gas regulations, the EPA developed what has been referred to as the "tailoring rule," which would radically raise that threshold for greenhouse gases and then gradually reduce it over time.
According to Kavanaugh, such a rewrite of statutory language was beyond the EPA's powers.
"Allowing agencies to exercise that kind of statutory re-writing authority could significantly enhance the Executive Branch's power at the expense of Congress's and thereby alter the relative balance of powers in the administrative process," Kavanaugh said in his dissent. "I would not go down that road."
The Supreme Court in 2014 eventually upheld the EPA's ability to regulate greenhouse gases from large emitters under the PSD program so long as those sources were required to get permits for other, non-greenhouse gas emissions. But in a partial win for Kavanaugh, the high court struck down the tailoring rule.
In a tone similar to Kavanaugh's, the Supreme Court in Utility Air Regulatory Group v. EPA (No. 12-1146) said a federal agency "has no power to 'tailor' legislation to bureaucratic policy goals by rewriting unambiguous statutory terms."
In June 2006, Brett Kavanaugh was sworn in as a judge for the U.S. Court of Appeals for the District of Columbia Circuit during a ceremony in the Rose Garden of the White House.
Source: Associated Press
Kavanaugh also broke with the majority on a three-judge panel of the D.C. Circuit with respect to a challenge to the EPA's Mercury and Air Toxics Standards, or MATS, in White Stallion Energy Center v. EPA (No. 12-1100).
The majority upheld the MATS rule, deferring to the EPA's conclusion that it did not have to consider the cost to the industry and the public when determining whether regulating mercury emissions is appropriate and necessary. But in a partial dissent, Kavanaugh said the notion that Congress would authorize the agency to regulate without considering costs was unreasonable. The case later moved to the Supreme Court, which ruled that the EPA did not properly consider the cost of compliance when developing MATS.
The EPA eventually determined that the rule still was appropriate and necessary even when considering its costs. But the agency under the Trump administration has a pending proposal that could weaken the MATS rule by eliminating consideration of the standards' co-benefits, including from the decline of other air pollutants, the New York Times reported Sept. 30.
Cost considerations also were at the heart of Kavanaugh's objection to the EPA's retroactive veto of a Clean Water Act permit for Arch Coal Inc.'s Spruce No. 1 mountaintop mine in West Virginia. In July 2016, the D.C. Circuit backed the EPA's veto of the permit in a split decision. In a dissenting opinion, Kavanaugh said the EPA "did not come close" to justifying rescinding the permit.
"EPA revoked a Clean Water Act permit without considering the costs of doing so," he said, adding that the agency "must go back to the drawing board and weigh both the costs and benefits of revoking the permit before making its decision."
Additionally, Kavanaugh sat on a panel that in 2012 vacated the EPA's Cross-State Air Pollution Rule, known as CSAPR. He and fellow D.C. Circuit Judge Thomas Griffith found in EME Homer City Generation v. EPA (No. 11-1302) that the rule required states to lower emissions beyond what was legally required and that the EPA did not give states the chance to cut emissions before imposing federal implementation plans.
The Supreme Court subsequently reversed the D.C. Circuit's decision, determining that the EPA's over-control of some states did not require the entire rule to be vacated. However, the high court agreed with the D.C. Circuit that the rule mandated unneeded emissions reductions of smog-forming pollution in some upwind states.
Kavanaugh has handled several cases pertaining to Federal Energy Regulatory Commission matters, where he has "shown a propensity ... to narrow the scope of government authority," said Joel Eisen, a professor at the University of Richmond's School of Law.
In 2017, Kavanaugh wrote a D.C. Circuit opinion in NRG Power Marketing v. FERC (Nos. 15-1452 and 15-1454) that curbed FERC's authority to alter regional power grid operators' market rules. The court determined that the agency overstepped its jurisdiction by conditioning approval of the PJM Interconnection's proposed buyer-side mitigation rules on the grid operator adopting substantial changes crafted by FERC.
Kavanaugh also upheld many FERC orders and decisions during his time on the D.C. Circuit. In July 2016, Kavanaugh joined two other judges in backing a FERC policy to bar federal rights of first refusal for incumbent utilities to build new transmission facilities in their service territories, saying the policy could improve competition in wholesale markets.