EPA v. EME Homer City Generation, L.P.

The Clean Air Act delegated authority to the Environmental Protection Agency (EPA) (defendant) to promulgate regulations setting national ambient air quality standards (NAAQS). The act directed states to propose State Implementation Plans (SIPs) to comply with the NAAQS. Any time the EPA revised the NAAQS, states had three years to file new SIPs. If the EPA determined that a state failed to do so, the act required the EPA to create a Federal Implementation Plan (FIP) for the state within two years. The act required each SIP to include a Good Neighbor Provision for intergovernmental cooperation with respect to interstate air pollution. In 1990, Congress amended the provision to require a SIP to prohibit emissions that would contribute significantly to another state’s NAAQS noncompliance. As part of its implementation of the amended provision, in 2011, the EPA promulgated a regulation (called the Transport Rule) under which a state violated the Good Neighbor Provision if (1) the state produced at least 1 percent of the NAAQS in another state and (2) the pollution could be eliminated cost-effectively. At the same time, the EPA found that states that had violated the Transport Rule had also failed to submit an adequate SIP. Accordingly, the EPA crafted a FIP for each such state. EME Homer City Generation, L.P. (plaintiff), challenged the regulations. The United States Court of Appeals for the District of Columbia Circuit invalidated the regulations because they effectively required states to implement a comprehensive solution to interstate air pollution without first receiving any EPA guidance. The United States Supreme Court granted certiorari.