McGuireWoods has won an important U.S. Supreme Court case involving a challenge to the Environmental Protection Agency’s rule known as the Good Neighbor Plan, a federal program that seeks to regulate ozone-forming emissions from power plants and other industrial sources in 23 states.
On June 27, 2024, the U.S. Supreme Court granted an emergency stay application sought by McGuireWoods’ clients —utilities Associated Electric Cooperative Inc., Deseret Power Electric Cooperative, Ohio Valley Electric Corp. and Wabash Valley Power Alliance, and trade associations National Rural Electric Cooperative Association, America’s Power and the Portland Cement Association.
McGuireWoods had challenged the Good Neighbor Plan in the U.S. Court of Appeals for the D.C. Circuit and sought a stay on the grounds that, among other things, the removal of 12 states — as a result of stays of State Implementation Plan disapprovals — from a 23-state program rendered the rule unlawful in all 23 states. The D.C. Circuit denied the stay, and McGuireWoods filed an emergency stay application in the Supreme Court.
McGuireWoods argued that the Clean Air Act gives states, not the EPA, the primary responsibility for regulating air emissions within a state and for ensuring that those in-state emissions do not adversely affect neighboring states. The firm maintained that before the EPA can issue a federal program like the Good Neighbor Plan, it must find that the states’ plans for regulating air emissions are inadequate and disapprove them. Challenges were filed to EPA’s disapprovals of 12 states’ plans in seven separate U.S. courts of appeals, all of which granted stays of those disapprovals. As a result, those 12 states were removed from the Good Neighbor Plan, leaving it “a shell of its original design.”
In Ohio v. EPA, the high court granted a stay of the rule, noting that the 12 states removed from the plan “accounted for over 70 percent of the emissions EPA had planned to address.” The court also found that the EPA plan “likely runs afoul of [the Clean Air Act’s] long-settled standards” and the stay applicants were likely to prevail.
Partners Allison Wood and Makram Jaber led the McGuireWoods team, which included partners Jonathan Ellis and Aaron Flynn and associates W. Dixon Snukals and Charles Kuo.
“Our clients are pleased that the Supreme Court granted the emergency stay application they sought. Environmental regulations generally have an over-sized impact. While the EPA’s Good Neighbor Plan would have accomplished little, if any, meaningful emissions reductions, it would have significant effects on the costs of consumer goods and services, jobs, and the reliability and affordability of electricity,” Wood said.