Day: July 10, 2015

Michigan v. EPA – SCOTUS Rules EPA Must Consider Costs in Initial Decision to Regulate

Posted on by Hamilton

Scalia, writing for the Court, stated that “[EPA] gave cost no thought at all, because it considered cost irrelevant to its initial decision to regulate,” he continued, writing, “It is unreasonable to read an instruction to an administrative agency to determine whether ‘regulation is appropriate and necessary’ as an invitation to ignore cost.” With that the Court found the Obama Administration’s most monumental environmental regulation to date unreasonable and remained to the D.C. Circuit Court of Appeals.

The regulation in question was the EPA’s Mercury and Air Toxics Standards (MATS). MATS required coal-burning power plants to reduce emissions of mercury, arsenic, and lead by installing control technologies or retiring plants. The rule was finalized in December 2012. While reducing the amount of hazardous emissions may seem admirable, the direct benefits of the regulation were valued at $4 million to $6 million, while the annual cost to industry would be approximately $9.6 billion. EPA contested the direct benefit of the program saying that, fully implemented, the MATS would yield between $37 billion and $90 billion in health benefits. EPA did not contest the cost of the program.

Opponents of the rule argued the costs imposed on business and society versus the limited benefits were unreasonable and that the practical implication of the MATS standard would be to put many coal-burning plants out of business. Environmentalists, and the EPA, have pointed out the health benefits to the program which they argue would protect vulnerable populations, such as pregnant women.

The practical effects this ruling may be limited. Because the rule has been implemented for two years just under 70% of coal burning power plants are already in compliance with the regulation. Furthermore, SCOTUS did not vacate the rule, only remanded it, therefore MATS will stay in effect while the D.C. Circuit reconsiders the case.

Furthermore, initial discussions make it seem unlikely that this case will have a broader effect on other EPA regulations. Some legal commentators contend that Justice Scalia seemed to cabin his analysis within the confines of the MATS program. As evidence of this, Justice Scalia took several pages drawing distinctions between the National Ambient Air Quality Standard, EPA’s largest Clean Air regulatory regime, and MATS making it unlikely that the rationale from this ruling can easily be applied more broadly throughout the Clean Air Act. Time will tell if these preliminary analyses correct.

Read the full opinion.

House Judiciary Committee Passes Fairness in Class Action Litigation Act

Posted on by Hamilton

Further reform to class actions may be on the horizon after the House of Representatives Judiciary Committee passed the Fairness in Class-Action Litigation Act (FICALA) of 2015 on June 24. The legislation was introduced by House Judiciary Committee Chair Bob Goodlatte (R-VA) and Civil Justice Subcommittee Chair Trent Franks (R-AZ). FICALA seeks to limit which potential plaintiffs can opt into a class action lawsuit based on the severity of the potential plaintiff’s injuries compared to the injury of the party. In a press release the Judiciary Committee stated, “uninjured or non-comparably injured parties can still join class actions, but must do so separately from parties that experienced more extensive injury.” The legislation is short and to the point:

§1716. Limitation on certification of class

(a) In General.—No Federal court shall certify any proposed class unless the party seeking to maintain a class action affirmatively demonstrates through admissible evidentiary proof that each proposed class member suffered an injury of the same type and extent as the injury of the named class representative or representatives.

(b) Definition.—In this section, the term ‘injury’ means the alleged impact of the defendant’s actions on the plaintiff’s body or property.

(c) Clerical Amendment.—The table of sections at the beginning of chapter 114 of title 28, United States Code, is amended by adding at the end the following new item:

In its present form this bill would only affect class actions with economic or monetary losses, not civil rights cases. Proponents of the bill, such as the U.S. Chamber of Commerce, argue the reform is necessary to prevent lawyers from “gaming the system” to inflate their legal fees. Opponents argue that the bill could effectively end class actions by forcing individuals to have identical injuries in order to join class action lawsuits.

The Wisconsin Civil Justice Council will keep you updated as the bill moves forward.