Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc.

Background

The Environmental Protection Agency (EPA) issued rules under the Clean Air Act that let states define a “stationary source” plantwide — a so-called “bubble” — so a factory could add or change equipment without a new permit if the plant’s total emissions did not increase. Environmental groups challenged the rule, and the United States Court of Appeals for the District of Columbia Circuit struck down the regulation as inconsistent with the Act. The case reached the Supreme Court for review, with industry groups and the EPA defending the plantwide approach.

Reasoning

The Supreme Court examined whether Congress had clearly decided how to define a stationary source. Finding no clear congressional command in the statute or its history, the Court explained that when a law is ambiguous the administering agency’s choice is reviewed for reasonableness. The Court held that the EPA’s plantwide bubble was a permissible way to balance competing goals of reducing pollution and allowing economic growth. Because the agency’s approach was reasonable and supported by the rulemaking record, the Court reversed the Court of Appeals and upheld the EPA’s regulations.

Real world impact

The decision lets states and plant owners use the plantwide bubble in many situations, which can reduce the paperwork and costs of upgrades and encourage replacement of older, dirtier equipment. States must still meet national air quality goals and enforce other requirements, but the ruling gives the EPA latitude to fashion flexible rules. The opinion also makes clear that courts should defer to reasonable agency interpretations when Congress has not spoken clearly on a technical issue.