Blog Post

Standing and the Tailoring Rule

Aug 28, 2012 | Nathan Richardson

At the Volokh Conspiracy, Jonathan Adler posts a good discussion of the prospects of en banc review of the DC Circuit ruling earlier this year throwing out challenges to EPA's program for regulating greenhouse gases. It's good analysis and worth a read. On the substance, he's skeptical that review would be granted, but he points to the court's holding that plaintiffs lacked standing to challenge the Tailoring Rule as the most likely grounds for review. (Recall that the Tailoring Rule redefines permitting thresholds in the CAA to avoid what EPA claimed were "absurd results" - regulation of a vast number of small GHG sources).

I think Adler is correct that standing is the most vulnerable (or at least most review-worthy) part of the case. He goes on to speculate that an en banc panel could reject the three judge panel's standing analysis:

While the strict application of Article III standing requirements is nothing new on the D.C. Circuit, here the panel applied the standing rules to prevent the object of a government action from challenging the lawfulness of that action, on the grounds that the harm would not be redressable by a favorable ruling on the merits. Though a plausible reading of the relevant standing precedents, this is a holding that could insulate all manner of regulatory action from judicial review, and expand the already troubling, de facto agency authority to issue “waivers” or otherwise disregard applicable legal requirements.

I further think Adler is right that there's tension with standing precedents here. But I think he goes too far when he suggests that the holding would lock the courtroom doors:

In Lujan v. Defenders of Wildlife, Justice Scalia explained “there is ordinarily little question” that one who is the object of government action has standing to challenge that action. Yet under the D.C. Circuit’s decision, no entity subject to the Tailoring Rule has standing to challenge it — and that might be enough to make the issue en banc-worthy.

The three judge panel did conclude that none of the plaintiffs had standing to challenge the Tailoring Rule. But that doesn't mean, as Adler implies, that it ruled that nobody could challenge it, or even that "no entity subject to" it could challenge it.

As some have suggested, the ideal plaintiff for challenging the rule is neither a large emitter (who would be subject to the rule regardless of the outcome, and therefore has not suffered redressable harm) nor a small one (who has escaped regulation under the rule and therefore has not suffered any harm). Instead, the ideal plaintiff is probably a firm in a competitive industry with players that straddle the bright permitting line set (allegedly arbitrarily and illegally) by EPA. An emitter just over EPA's threshold could be harmed relative to a competitor just below it. And, crucially, throwing out the Tailoring Rule would redress this harm. Such a plaintiff might have standing - we at least cannot assume based on the ruling that they would not.

One might complain that this a minor exception, and that courts shouldn't require such careful plaintiff-hunting. That might be true as a policy matter, but in practice those challenging rulemakings often are very careful about the plaintiffs they select, partly for standing purposes but for other reasons too.

In any case, and despite other possible problems with the standing portion of the holding, it does not bar the door to challenges of regulation like the Tailoring Rule. It remains open, if only a crack.