Supreme Court Hears Emergency Bid From States to Stay EPA's "Good Neighbor" Rule

The Supreme Court heard oral argument in Ohio v. Environmental Protection Agency, No. 23-349, on an emergency application by a coalition of states seeking a stay of the EPA's "good neighbor" federal plan for interstate ozone pollution.

Applicant counsel told the Court the EPA adopted a single cost-threshold method across 23 states and then failed to account for the possibility that many states would be removed from the plan. "The plan now regulates under half of the states and a quarter of the emissions that the EPA originally set out to regulate," counsel said, arguing that EPA's methodology becomes arbitrary and imposes unfair costs and reliability risks on the states and industries left in the plan.

The applicants asked the Court for emergency relief, saying compliance spending is already under way and that some industry declarations warn of imminent reliability and energy risks if the rule is enforced without reconsideration. Petitioners urged that the agency had a duty to analyze contingencies and explain why the chosen cost threshold still made sense after the geographic composition of the plan changed.

EPA counsel responded that the agency's authority under the Clean Air Act's good neighbor provision is limited to regulating a state's emissions that "contribute significantly to downwind nonattainment," and defended the rule's design and record. "EPA's authority under the good neighbor provision is limited to regulating a state's emissions that contribute significantly to downwind nonattainment," counsel said, urging the Court to weigh statutory purpose and the agency's analysis.

The Solicitor General's office and supporting counsel told the justices that a stay would undercut statutory protections for downwind states and harm public health and industry there. The Solicitor General warned that a stay could "undermine that statutory goal and the public interest by sending ozone pollution into downwind states," and cited cost comparisons used in the record, saying some Connecticut sources face costs "up to $13,000 per ton" while near-term power-plant controls cost about $1,600 per ton.

Justices focused on several recurring questions: whether the interdependence claim was adequately raised in the administrative record or in a motion for reconsideration; whether EPA's severability statement in the final rule sufficed to permit enforcement against a smaller set of states; whether the agency needed to perform numerous recalculations to account for every possible mix of participating states; and what showing is required for Supreme Court emergency relief when a case is pending in the lower courts.

Several justices expressed skepticism about the applicants's vehicle and record-based arguments, asking whether the petitioners had given the agency or the DC Circuit a fair chance to address the problem; other justices pressed EPA counsel on whether the rule's cost calculus and the trading program remain sensible with fewer states participating.

After argument and a short rebuttal from EPA counsel emphasizing the statute's protection of downwind states and the rule's substantive choices, the Court announced the case was submitted.

What happens next: The justices have heard argument on the emergency application; the Court will issue a ruling from the bench or in an opinion at a later date. The oral argument focused on whether the agency adequately explained how a national method should operate when many states drop out and on the appropriate standard for Supreme Court intervention in an ongoing lower-court proceeding.