By Michael Brooks and Rich Heidorn Jr.

The D.C. Circuit Court of Appeals granted the Trump administration’s requests to hold in abeyance lawsuits challenging EPA’s Clean Power Plan and Mercury and Air Toxics Standards, small but important victories for the president — just before his 100th day in office — as he tries to reverse the Obama administration’s regulations on fossil fuel-fired power plants.

The orders also come just before a march in D.C. protesting President Trump’s policies on climate change.

The administration filed its requests on the CPP and MATS cases — along with several others regarding numerous lawsuits concerning Obama-era environmental regulations — shortly after Trump signed an executive order at EPA headquarters last month directing agencies to review all existing regulations “that potentially burden the development or use of domestically produced energy resources.” (See Trump Order Begins Perilous Attempt to Undo Clean Power Plan.)

The court on Friday ordered the suit against the CPP, filed by 26 states , to be paused for 60 days, with EPA required to file a status report in 30 days.

Stay

Implementation of the CPP was stayed by the Supreme Court in February 2016, shortly after the states filed their challenge, and the D.C. Circuit heard more than seven hours of oral arguments in September. The stay was a surprise to many and came without explanation, but it’s likely the Supreme Court wanted to avoid what happened with MATS.

The court in June 2015 found that rule illegal because EPA had not considered its costs. But because the rule, first proposed in March 2011, had not been stayed during the years of litigation, companies had been making investments and closing power plants in order to comply by the April 2015 effective date.

Instead of voiding the rule, the Supreme Court remanded the case back to the D.C. Circuit, which ordered EPA to rewrite the rule with a proper cost-benefit analysis. The court’s Thursday order suspended the case until further notice. EPA is required to file a status report in 90 days.

The holds give the administration more time to figure out how to revise — or potentially rescind — the rules. It is unclear how it intends to do this. But in the case of the CPP, the order does stave off the court from potentially upholding the rule.

Chief Judge Merrick Garland did not participate in the order, as he had recused himself from cases while his nomination to the Supreme Court by President Obama was pending before the Senate.

EPA Request

EPA asked the court to delay action on the CPP challenge on March 28, the day Trump signed an executive order directing EPA Administrator Scott Pruitt to begin the lengthy process of undoing the rule.

“The Clean Power Plan is under close scrutiny by the EPA, and the prior positions taken by the agency with respect to the rule do not necessarily reflect its ultimate conclusions,” EPA said in its motion. “EPA should be afforded the opportunity to fully review the Clean Power Plan and respond to the president’s direction in a manner that is consistent with the terms of the executive order, the Clean Air Act and the agency’s inherent authority to reconsider past decisions. Deferral of further judicial proceedings is thus warranted.”

Environmental groups — including the Sierra Club, Environmental Defense Fund and Natural Resources Defense Council — filed a response April 5 contending that EPA’s request “would have the effect of improperly suspending the rule without review by any court, without any explanation and without mandatory administrative process.”

“The relief EPA seeks flouts the terms of the order by which the Supreme Court temporarily stayed enforcement of the rule. The Supreme Court did not invalidate the rule; consistent with the authority granted courts by the Administrative Procedure Act, it issued a stay pending a decision by this court and an opportunity for Supreme Court review. Now EPA wants the stay, but not the judicial review that formed the basis for it,” they wrote. “Granting EPA’s motion would effectively convert that temporary enforcement relief pending judicial review into a long-term suspension of the rule likely continuing for years, without any court having issued any decision on the rule’s merits.”

CPP’s Vulnerabilities

Based on the judges’ questions and comments during oral arguments in September, it appeared four of the five challenges — a Constitutional issue; a bill drafting error; EPA’s alleged failure to provide sufficient notice of changes between the original and final plan; and a claim that it relied on dubious assumptions on the growth of renewables — had little chance of prevailing. But the judges seemed to be seriously considering the argument that EPA overreached its authority by creating CO₂ emission limits that coal-fired generators can’t meet, forcing a “generation switch” to natural gas and renewables. (See Analysis: No Knock Out Blow for Clean Power Plan Foes in Court Arguments.)

Some observers say the administration may not succeed in killing the CPP, and that if it does, it will have little impact because the power industry’s decarbonization will continue without the rule.

At a panel discussion at the Energy Bar Association annual conference in April, David Doniger, director of the NRDC’s Climate and Clean Air program, said that most of the players in the electric industry have adjusted to the CPP’s goals and are unlikely to reduce decarbonization efforts because of Trump’s action.

“Whatever its noble objectives, it’s relatively irrelevant whether or not [the CPP is] enforced,” added panelist Ian C. Connor, global co-head of J.P. Morgan’s Power & Utility Group. “I have little doubt … that the industry will materially decarbonize and outstrip what the CPP is trying to do.” (See EBA Panel: CPP’s Demise not Certain — and it Doesn’t Matter.)

CPP Supporters: EPA Must Act on Carbon

New York Attorney General Eric T. Schneiderman tweeted in response to the court’s action Friday: “Despite today’s temporary pause in litigation, the facts remain the same: @EPA is still legally obligated to limit carbon pollution.”

“We are in a race against time to address the climate crisis,” EDF General Counsel Vickie Patton said. “The Supreme Court is clear that EPA has a duty to protect Americans from dangerous climate pollution under our nation’s clean air laws, and Environmental Defense Fund will take swift action to ensure that EPA carries out its responsibilities under the law. Climate progress and clean energy cannot be stopped by the litigation tactics of polluters.”

CPP Opponents: Good Riddance

William Yeatman, senior fellow at the Competitive Enterprise Institute, which opposes the CPP, said the action means one of two potential outcomes: “1) Either the rule is nixed because the EPA determines that it is precluded from issuing a climate rule for existing power plants because they are already regulated under the Clean Air Act’s hazardous air pollution program, or 2) the EPA significantly revises the rule to bring it ‘inside the fence line’ of electricity generating units, such that the agency no longer claims the authority to dictate to the states what their energy choices must be.

“Either way, the outcome will pardon the American economy from the ill-effects of the Clean Power Plan, which would have empowered the EPA to remake the electric industry,” Yeatman said.

Jeff Holmstead, a partner with the Bracewell law firm who headed the EPA’s Office of Air and Radiation from 2001 to 2005, called the news “important but not terribly surprising.”

“I don’t think the D.C. Circuit has ever gone ahead and decided on the legality of a rule when a new administration says it plans to rescind or revise it. The only question now is whether the case will be held in abeyance or remanded back to EPA. If the court had upheld the rule, it wouldn’t have prevented the new administration from revoking it, but it might have made this effort harder.  At the very least, today’s ruling means that it will not take as long for the administration to undo the Clean Power Plan.”