Texas v. Environmental Protection Agency

In 2007, the Supreme Court ruled that the Clean Air Act (CAA) gave the Environmental Protection Agency (EPA) (defendant) authority to regulate greenhouse-gas (GHG) emissions. The EPA subsequently issued a finding that GHG emissions from new vehicles endangered public health and welfare and adopted the tailpipe rule, which set GHG-emission limits for such vehicles. Because the finding and rule established GHGs as pollutants subject to regulation, CAA provisions also required regulation of GHG emissions from sources like factories. If a new major emitting facility was to be built in an area already compliant with the EPA’s National Ambient Air Quality Standards (NAAQS), known as a prevention-of-significant-deterioration (PSD) area, then CAA § 165 required a preconstruction permit that imposed strict, technology-based limitations on the facility for each regulated pollutant. Although the EPA issued the NAAQS, states were responsible for implementing those standards via state implementation plans (SIPs) approved by the EPA. If a SIP was disapproved, the EPA could impose a federal implementation plan (FIP) on the state. When GHGs became regulated pollutants, the EPA issued a SIP call requiring states to submit revised SIPs that included GHGs within three years. The EPA claimed that the inclusion of GHGs under § 165 was self-executing, meaning that during that three-year period, state-issued PSD permits needed to include GHG limitations. Texas and Wyoming (plaintiffs) filed suit in the District of Columbia Circuit to challenge the EPA’s construction of § 165, arguing that during the three-year period, states could continue to issue PSD permits that did not limit GHG emissions.