Michigan v. EPA, 135 S. Ct. 2699 (2015).
The Clean Air Act requires EPA to determine whether regulation of hazardous air pollutants from power plants was “appropriate and necessary.” 42 U.S.C. § 7412(n)(1)(A). EPA found power plant regulation “appropriate” because the plants’ emissions pose risks to public health and the environment and because controls capable of reducing these emissions were available. It found regulation “necessary” because the imposition of other Clean Air Act requirements did not eliminate those risks. EPA declined to consider cost when it issued the rule regulating the emission of mercury at power generating plants. It estimated, however, that the cost of its regulation would be $9.6 billion a year but the benefits would be $4 to $6 million a year. Petitioners (including 23 states) sought review of EPA’s rule in the D.C. Circuit, which upheld the regulations. The Supreme Court reversed. The Court held that EPA unreasonably interpreted the Clean Air Act when it set limits on such emissions from power plants without first considering the costs to industry. Justice Scalia’s opinion for the Court concludes that the phrase “appropriate and necessary” plainly encompasses cost and that EPA must consider cost, including cost of compliance, before deciding whether regulation is appropriate and necessary. Justice Kagan’s dissent opines that EPA reasonably decided to trigger the regulatory process given that costs were taken into account in multiple ways when setting the emission limits.