Environmental Defense v. Duke Energy:

Today the Supreme Court hears oral arguments in the first of the term's big Clean Air Act (CAA) cases, Environmental Defense v. Duke Energy Corp.:. The case arises out of claims by the U.S. Environmental Protection Agency that Duke Energy Corporation violated the CAA when made modifications to a number of its power plants without first obtaining New Source Review permits. Duke claims that the modifications were exempt from such requirements under the CAA as it had been historically applied. The EPA argued that the modifications required permits because they extended the hours of the plants could operate, resulting in greater emissions.

Duke Energy won below in the U.S. Court of Appeals for the Fourth Circuit, and the Justice Department declined to file for certiorari. Indeed, the Solicitor General's office opposed certiorari when the intervenors, Environmental Defense, filed a petition arguing both that the Fourth Circuit was wrong on the substance and the the Fourth Circuit's opinion violated jurisdictional provisions of the Clean Air Act that grant the U.S. Court of Appeals for the D.C. Circuit exclusive jurisdiction over challenges to most nationally applicable CAA rules. (This latter argument is likely what led the Supreme Court to grant cert.)

The Supreme Court accepted cert on both the substantive question of when plant modifications trigger CAA permitting requirements and the jurisdictional question. In the latter case, Duke Energy and its amici (of which I am one) will argue that regulated entities must be able to challenge the EPA's regulatory interpretations inthe context of enforcement actions such as this, otherwise they could be denied any meaningful opportunity to challenge an agency's interpretation of a given regulation. Environmental Defense, the Justice Department (now back on the other side as a respondent supporting the petitioner), and their supporting amici counter that Duke is really challenging the EPA's regulations (or, at least, that the Fourth Circuit's opinion favoring Duke effectively invalidated the regulations), and that such challenges must be brought in the D.C. Circuit when the rules were issued.

Sound complicated? It is. I've oversimplified things quite a bit (though I hope not at the expense of accuracy). While the result will turn on questions of statutory interpretation and administrative law, it is an important case. Environmental Defense argues the outcome will determine whether thousands of facilities may continue polluting without effective controls. The electric power industry, on the other hand, points to this study indicating that a loss for Duke will result in dramatically higher electricity prices and reduced reliability for many communities around the nation

For more background, see SCOTUSBlog's preview here. Some of the briefs are also available here. I hope to blog more on this case in the coming days.

UPDATE: This WP report suggests things went well for Duke Power at the oral argument (as one commenter below suggests as well). The transcript is here. I hope to comment on it and the jurisdictional question later tonight or tomorrow.