Last week, SCOTUSBlog posted two assessments of the oral argument in Environmental Defense v. Duke Power Corp., a case concerning when power plant modifications or repairs trigger federal "New Source Review" regulations that require new and modified stationary sources to adopt state-of-the-art pollution control equipment.

Paul Guterman of Akin Gump observed that the argument "meandered" and, interestingly, that

none of the Justices show[ed] much respect for the jurisdictional arguments raised by the Petitioners or, surprisingly, for the legal reasoning of either the 4th Circuit opinion by Judge Motz or the 7th Circuit opinion by Judge Posner.

Guterman further noted that the justices repeatedly focused on the potential ambiguity of the EPA's regulations; "While seemingly mundane, the issue of whether the regulations are ambiguous has paramount importance for both the substantive and jurisdictional arguments." If the regulations are ambiguous, then it is more difficult to argue both that Duke Energy and other utilities clearly violated federal law when they modified their facilities and that lower courts err when they evaluate the EPA's interpretation of its regulations in the context of an enforcement action.

Baker & Hoestetler's David Rivkin (who authored the amicus brief in which I participated) echoed some of Guterman's observations about the court's focus on the jurisdictional questions.

After Wednesday's oral argument in Environmental Defense v. Duke Energy Corp., it is clear that if the Supreme Court really accepted certiorari to defend the D.C. Circuit's prerogative to decide the validity of agency action (a claim made by many an environmental pundit in the last several months), the Court spent an awful lot of time trying to figure out the answer to merit questions that the government and environmental groups allege it shouldn't even be deciding. And, while it is uncertain which party will ultimately prevail in Duke Energy, it is clear that the case will not be the cakewalk for petitioners that many observers had predicted when the Supreme Court accepted the case for review over the government' and Duke Energy's objections.

Both Guterman and Rivkin seem to think the outcome is uncertain. Whatever the result, the decision could have significant economic, environmental, and legal implications. Several other NSR enforcement cases are still in the courts, and while the EPA has proposed to rewrite the relevant regulations, it is likely the agency will have to defend these changes in court as well.

In closing, Rivkin offered this assessment:

depending on how you view the issue, the government either can't win or can't lose. As has been well publicized, the government has pursued its NSR enforcement actions simultaneous with attempts to promulgate legislative rules that make the conduct in which the enforcement action defendants engaged legal. So if the government loses Duke Energy, it will very likely succeed in its attempts to reform the NSR program, and if the government prevails in Duke Energy, its attempts to reform the NSR program might be dealt a blow, but it will be in a better position in the enforcement actions.