On October 6, 2014, a federal district court in Nebraska dismissed the state of Nebraska’s lawsuit challenging the Environmental Protection Agency’s (“EPA”) proposed rule that would limit emissions of carbon dioxide from newly-built fossil fuel-powered generators. The court ruled that the state of Nebraska’s challenge “jumped the gun” and would have to wait until there was a final agency action.
The case concerned the EPA’s effort under the Clean Air Act (“CAA”) to draft new Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources (“Proposed Rule”) that would limit emissions of carbon dioxide from newly-built fossil fuel-fired electric utility generating units. The state of Nebraska challenged EPA’s Proposed Rule, arguing that since EPA had based the Proposed Rule on energy facilities that received federal assistance, EPA had violated the Energy Policy Act of 2005 (“EPAct 2005”). Among other things, EPAct 2005 provided federal funding for the development of coal-based energy projects which were designed to “advance efficiency, environmental performance, and cost competitiveness well beyond the level of technologies” then in commercial service. Although EPAct 2005 sought to encourage the development of cleaner energy facilities, it also includes several provisions that limit the EPA’s authority to rely on information from those facilities in conducting rulemakings or taking other actions under various provisions of the CAA. Specifically, the state of Nebraska alleged that since EPA had used data from facilities that received federal assistance to prove that certain technology was “adequately demonstrated” for CAA purposes, that EPA had violated EPAct 2005 by relying on data from federally subsidized facilities to prove that the technology was viable for CAA purposes.
In response, EPA moved to dismiss the complaint for failure to state a claim and lack of jurisdiction. The court agreed with EPA. In its analysis, the court noted that review of agency action under the Administrative Procedure Act is only available in two situations: when made reviewable by statute or after final agency action for which there is no other remedy in a court. Although the state of Nebraska argued that the there was final agency action, the court held that the proposed rule was not a final agency action, and a remedy was available to the state of Nebraska under the CAA, although it was available in the Court of Appeals for the District of Columbia Circuit. The court stated that the proposed rule, as a proposal, was not final agency action, and regardless of whether or not the proposed rule violated EPAct 2005, the rule was not reviewable until the rule was finalized by EPA.
A copy of the of the court’s order is available here.