US Federal Court Rules Against Social Cost of Carbon

Following a Biden Executive Order, in April 2021 several states went to Louisiana District Court to stop implementation of Social Cost of Carbon with respect to federal regulations.  The Memorandum Ruling regarding that case is State of Louisiana et al Versus Joseph R. Biden Jr. et al.  The Plaintiff States are Louisiana, Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming. Excerpts in italics with my bolds.  H/T Francis Menton

The Issues

The Plaintiff States seek injunctive and declaratory relief on three grounds. First, they assert that the SC-GHG Estimates violate the procedural requirements of the Administrative Procedure Act (“APA”) as a substantive rule that did not undergo the requisite notice-and-comment process. See 5 U.S.C. § 553.

Second, the Plaintiff States claim that President Biden, through EO 13990, and the IWG lack the authority to enforce the estimates as they are substantively unlawful under the APA and contravene existing law. See 5 U.S.C. § 706(2)(A)–(C).

Third, the Plaintiff States maintain that the Government Defendants acted beyond any congressional authority by basing regulatory policy upon global considerations.

The Plaintiff States request a preliminary injunction:
(1) ordering Defendants to disregard the SC-GHG Estimates and prohibiting them from adopting, employing, treating as binding, or relying upon the work product of the Interagency Working Group (“IWG”);
(2) enjoining Defendants from independently relying upon the IWG’s methodology considering global effects, discount rates, and time horizons; and
(3) ordering Defendants to return to the guidance of Circular A-4, explained infra, in conducting regulatory analysis.

To be clear, the Court is ruling only on the actions of the federal agencies and whether the agencies, by implementing the estimates and considering global effects— violate the APA and whether President Biden upon signing EO 13990, violated the separations of powers clause of the United States Constitution. The Court has the authority to enjoin federal agencies from implementing a rule—mandated by an executive order or not—that violates the APA or violates the separation of powers clause. Importantly, the Court is not opining as to the scientific issues regarding greenhouse gas emissions, their effects on the environment, or whether they contribute to global warming.

The Findings

The Court is persuaded that the Biden Administration’s agencies are using the SCGHG. The Court finds that the Plaintiff States have established injury-in-fact.

Plaintiff States argue that the SC-GHG Estimates “affect[] the states’ ‘quasi-sovereign’ interests by imposing substantial pressure on them to change their” practices and laws to remain in compliance with federal standards. Id. at 153. The Court finds that the Plaintiff States also have standing as they are entitled to special solicitude in the standing inquiry.

The Court finds that EO 13990 contradicts Congress’ intent regarding legislative rulemaking by mandating consideration of the global effects. The Court further finds that the President lacks power to promulgate fundamentally transformative legislative rules in Case 2:21-cv-01074-JDC-KK Document 98 Filed 02/11/22 Page 33 of 44 PageID #: 4175 Page 34 of 44 areas of vast political, social, and economic importance, thus, the issuance of EO 13990 violates the major questions doctrine.

The Court finds that EO 13990 was promulgated without complying with the APA’s notice and comment requirements.

The Plaintiff States thus argue that they have demonstrated multiple independently sufficient grounds to vacate the SC-GHG Estimate and therefore have shown a strong likelihood of success on the merits. The Court agrees and finds that the Plaintiff States have shown a strong likelihood of success on the merits.

Plaintiff States have sufficiently identified the kinds of harms to support injunctive relief. Moreover, the Court finds that the Plaintiff States have made a clear showing of an injury-in-fact, and that such injury “cannot be undone through monetary remedies,” Louisiana v. Biden, 2021 WL 2446010, at *21 (W.D. La. June 15, 2021), such that they need immediate relief now, lest they be unable to ever obtain meaningful judicial relief in the future.

The Court finds that the balance of the injuries weighs substantially in favor of the Plaintiff States.

The Court agrees that the public interest and balance of equities weigh heavily in favor of granting a preliminary injunction.

CONCLUSION For the reasons set forth herein above, the Motion for Preliminary Injunction will be granted in its entirety.

Comment from Manhattan Contrarian

On taking office, the Trump administration took steps to neutralize the SCC, so that not much has been heard from it for a while. But Biden’s EO 13990 caused the Obama-era version to get re-instated. The Biden people claim that they are working on further tweaks to the regulations, but meanwhile a large group of Republican-led states went ahead and commenced litigation.

With a regulatory initiative obviously intended to force a gigantic transformation of the economy without statutory basis, the Biden people defended against the Complaint using every shuck and jive and technicality known to man. The SCC rules were not “final” because the administration was still working on a few more tweaks (and then a few more, and then a few more); the state plaintiffs lacked “standing” because the harm was to citizens rather than the state itself; and so forth. The court was having none of it.

The heart of the court’s decision is its determination that the SCC falls under the Supreme Court’s “major questions doctrine,” under which the bureaucracy cannot on its own authority impose “new obligations of vast economic and political significance” unless Congress “speaks clearly.” The states had identified some 83 pending projects involving something in the range of $447 and $561 billion dollars as affected by the SCC rule. That impressed the court as easily within the concept of “major questions.”

We are at the beginning of what could be a very long battle. The bureaucracy has many ways to wear down its opponents. For example, a permit can simply be delayed indefinitely, without any reason being stated, as occurred for example with the Keystone XL pipeline. But at least here battle lines have finally been drawn.

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