MICHIGAN v. E.P.A. 2699columbiaclimatelaw.com › files › 2017 › 02 › Michigan-v.-EPA.pdfCite as 135 S.Ct. 2699 (2015) emissions of hazardous air pollutants from certain stationary

2699MICHIGAN v. E.P.A.Cite as 135 S.Ct. 2699 (2015)

praising a plebiscite in a ‘‘banana republic’’that installs a strongman as President forLife. And wrapping the analysis in acloak of federalism does little to concealthe flaws in the Court’s reasoning.

I would dispense with the faux federal-ism and would instead treat the States inan evenhanded manner. That means ap-plying the Constitution as written. Al-though the straightforward text of ArticleI, § 4, prohibits redistricting by an une-lected, independent commission, ArticleIII limits our power to deciding cases orcontroversies. Because I agree with Jus-tice SCALIA that the Arizona Legislaturelacks Article III standing to assert aninstitutional injury against another entityof state government, I would dismiss itssuit. I respectfully dissent.

,

MICHIGAN, et al., Petitioners

v.

ENVIRONMENTAL PROTECTIONAGENCY, et al.

Utility Air RegulatoryGroup, Petitioner

v.

Environmental ProtectionAgency, et al.

National Mining Association,Petitioner

v.

Environmental ProtectionAgency, et al.

Nos. 14–46, 14–47, 14–49.Argued March 25, 2015.

Decided June 29, 2015.Background: State, industry, labor andenvironmental entities petitioned for re-

view of Environmental Protection Agency(EPA) final rule setting standards for reg-ulation of hazardous air pollutants emittedby power plants. The United States Courtof Appeals for the District of ColumbiaCircuit, 748 F.3d 1222, denied the petition,and certiorari was granted.

Holding: The Supreme Court, JusticeScalia, held that EPA unreasonablydeemed cost irrelevant when it decided toregulate power plants.

Reversed and remanded.

Justice Thomas filed a concurring opinion.

Justice Kagan filed a dissenting opinion inwhich Justices Ginsburg, Breyer, and So-tomayor joined.

1. Administrative Law and ProcedureO507

Federal administrative agencies arerequired to engage in reasoned decision-making.

2. Administrative Law and ProcedureO305, 763

Not only must an agency’s decreedresult be within the scope of its lawfulauthority, but the process by which itreaches that result must be logical andrational.


Agency action is lawful only if it restson a consideration of the relevant factors.

4. Environmental Law O276

Environmental Protection Agency(EPA) unreasonably deemed cost irrele-vant when it decided to regulate powerplants under provision of the Clean Air Actdirecting the EPA to regulate emission ofhazardous air pollutants from power plants

2700 135 SUPREME COURT REPORTER

if it finds regulation ‘‘appropriate and nec-essary.’’ Clean Air Act, § 112(n)(1)(A), 42U.S.C.A. § 7412(n)(1)(A).


Courts are directed under Chevron toaccept an agency’s reasonable resolution ofan ambiguity in a statute that the agencyadministers; even under this deferentialstandard, however, agencies must operatewithin the bounds of reasonable interpre-tation.


‘‘Appropriate’’ within meaning of astatute allowing an agency to adopt appro-priate regulations is the classic broad andall-encompassing term that naturally andtraditionally includes consideration of allthe relevant factors; although this termleaves agencies with flexibility, an agencymay not entirely fail to consider an impor-tant aspect of the problem when decidingwhether regulation is appropriate.

See publication Words and Phras-es for other judicial constructionsand definitions.

7. Environmental Law O276Phrase ‘‘appropriate and necessary’’

within meaning of Clean Air Act provisiondirecting the Environmental ProtectionAgency (EPA) to regulate emission of haz-ardous air pollutants from power plants ifit finds regulation ‘‘appropriate and neces-sary’’ requires at least some attention tocost. Clean Air Act, § 112(n)(1)(A), 42U.S.C.A. § 7412(n)(1)(A).

See publication Words and Phras-es for other judicial constructionsand definitions.


Reasonable regulation ordinarily re-quires paying attention to the advantagesand the disadvantages of agency decisions.


Chevron allows agencies to chooseamong competing reasonable interpreta-tions of a statute; it does not license inter-pretive gerrymanders under which anagency keeps parts of statutory context itlikes while throwing away parts it doesnot.


Where the Clean Air Act expresslydirects Environmental Protection Agency(EPA) to regulate on the basis of a factorthat on its face does not include cost, theAct normally should not be read as implic-itly allowing the Agency to consider costanyway. Clean Air Act, § 101 et seq., 42U.S.C.A. § 7401 et seq.


An agency’s preference for symmetrycannot trump an asymmetrical statute.


A court may uphold agency actiononly on the grounds that the agency in-voked when it took the action.


The Environmental Protection Agency(EPA) must consider cost—including, mostimportantly, cost of compliance—beforedeciding whether regulation of powerplants under the Clean Air Act is appropri-ate and necessary. Clean Air Act,§ 112(n)(1)(A), 42 U.S.C.A.§ 7412(n)(1)(A).

Syllabus *

The Clean Air Act directs the Envi-ronmental Protection Agency to regulate

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the


emissions of hazardous air pollutants fromcertain stationary sources (such as refiner-ies and factories). 42 U.S.C. § 7412. TheAgency may regulate power plants underthis program only if it concludes that ‘‘reg-ulation is appropriate and necessary’’ afterstudying hazards to public health posed bypower-plant emissions. § 7412(n)(1)(A).Here, EPA found power-plant regulation‘‘appropriate’’ because the plants’ emis-sions pose risks to public health and theenvironment and because controls capableof reducing these emissions were available.It found regulation ‘‘necessary’’ becausethe imposition of other Clean Air Act re-quirements did not eliminate those risks.The Agency refused to consider cost whenmaking its decision. It estimated, howev-er, that the cost of its regulations to powerplants would be $9.6 billion a year, but thequantifiable benefits from the resulting re-duction in hazardous-air-pollutant emis-sions would be $4 to $6 million a year.Petitioners (including 23 States) sought re-view of EPA’s rule in the D.C. Circuit,which upheld the Agency’s refusal to con-sider costs in its decision to regulate.

Held : EPA interpreted§ 7412(n)(1)(A) unreasonably when itdeemed cost irrelevant to the decision toregulate power plants. Pp. 2706 – 2711.

(a) Agency action is unlawful if it doesnot rest ‘‘ ‘on a consideration of the rele-vant factors.’ ’’ Motor Vehicle Mfrs. Assn.of United States, Inc. v. State Farm Mut.Automobile Ins. Co., 463 U.S. 29, 43, 103S.Ct. 2856, 77 L.Ed.2d 443. Even underthe deferential standard of Chevron U.S.A.Inc. v. Natural Resources Defense Coun-cil, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81L.Ed.2d 694, which directs courts to acceptan agency’s reasonable resolution of anambiguity in a statute that the agencyadministers, id., at 842–843, 104 S.Ct.

2778, EPA strayed well beyond the boundsof reasonable interpretation in concludingthat cost is not a factor relevant to theappropriateness of regulating powerplants. Pp. 2706 – 2707.

(b) ‘‘Appropriate and necessary’’ is acapacious phrase. Read naturally againstthe backdrop of established administrativelaw, this phrase plainly encompasses cost.It is not rational, never mind ‘‘appropri-ate,’’ to impose billions of dollars in eco-nomic costs in return for a few dollars inhealth or environmental benefits. Statuto-ry context supports this reading. Section7412(n)(1) required the EPA to conductthree studies, including one that reflectsconcern about cost, see § 7412(n)(1)(B);and the Agency agrees that the term ‘‘ap-propriate and necessary’’ must be inter-preted in light of all three studies. Pp.2707 – 2708.

(c) EPA’s counterarguments are un-persuasive. That other Clean Air Act pro-visions expressly mention cost only showsthat § 7412(n)(1)(A)’s broad reference toappropriateness encompasses multiple rel-evant factors, one of which is cost. Simi-larly, the modest principle of Whitman v.American Trucking Assns., Inc., 531 U.S.457, 121 S.Ct. 903, 149 L.Ed.2d 1—whenthe Clean Air Act expressly directs EPAto regulate on the basis of a discrete factorthat does not include cost, the Act shouldnot be read as implicitly allowing consider-ation of cost anyway—has no bearing onthis case. Furthermore, the possibility ofconsidering cost at a later stage, whendeciding how much to regulate powerplants, does not establish its irrelevance atthis stage. And although the Clean AirAct makes cost irrelevant to the initialdecision to regulate sources other thanpower plants, the whole point of having aseparate provision for power plants was to

Reporter of Decisions for the convenience ofthe reader. See United States v. Detroit Tim-

ber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct.282, 50 L.Ed. 499.


treat power plants differently. Pp. 2708 –2710.

(d) EPA must consider cost—includ-ing cost of compliance—before decidingwhether regulation is appropriate and nec-essary. It will be up to the Agency todecide (as always, within the limits of rea-sonable interpretation) how to account forcost. Pp. 2710 – 2711.

748 F.3d 1222, reversed and remand-ed.

SCALIA, J., delivered the opinion ofthe Court, in which ROBERTS, C.J., andKENNEDY, THOMAS, and ALITO, JJ.,joined. THOMAS, J., filed a concurringopinion. KAGAN, J., filed a dissentingopinion, in which GINSBURG, BREYER,and SOTOMAYOR, JJ., joined.

Aaron D. Lindstrom, Solicitor General,for State Petitioners.

F. William Brownell, for Industry Peti-tioners and Respondents in support.

Donald B. Verrilli, Jr., Solicitor General,for the Federal Respondents.

Paul M. Smith, Washington, DC, for In-dustry Respondents.

Carroll W. McGuffey III, Justin T.Wong, Troutman Sanders LLP, Atlanta,GA, Peter S. Glaser, Counsel of Record,Troutman Sanders LLP, Washington, DC,for Petitioner National Mining Association.

F. William Brownell, Counsel of Record,Henry V. Nickel, Lee B. Zeugin, ElizabethL. Horner, Hunton & Williams LLP,Washington, DC, for Petitioner.

Leslie Sue Ritts, Ritts Law Group,PLLC, Alexandria, VA, for PetitionerAmerican Public Power Association.

Bart E. Cassidy, Katherine L. Vaccaro,Manko, Gold, Katcher & Fox, LLP, BalaCynwyd, PA, for Petitioner ARIPPA.

Michael Nasi, Jackson Walker LLP,Austin, TX, for Petitioner Gulf Coast Lig-nite Coalition.

Dennis Lane, Stinson Leonard StreetLLP, Washington, DC, Parthenia B. Ev-ans, Stinson Leonard Street LLP, KansasCity, MO, for Petitioner Kansas CityBoard of Public Utilities.

Eric Groten, Vinson & Elkins LLP, Aus-tin, TX, for Petitioner White Stallion En-ergy Center, LLC.

Maura Healey, Attorney General ofMassachusetts, Melissa Hoffer, Tracy L.Triplett, Assistant Attorneys General, En-vironmental Protection Division, Boston,MA, Kamala D. Harris, Attorney Generalof California, Oakland, CA, George Jepsen,Attorney General of Connecticut, Hart-ford, CT, Matthew P. Denn, Attorney Gen-eral of Delaware, Wilmington, DE, LisaMadigan, Attorney General of Illinois, Chi-cago, IL, Thomas J. Miller, Attorney Gen-eral of Iowa, Des Moines, IA, Janet T.Mills, Attorney General of Maine, Augusta,ME, Brian E. Frosh, Attorney General ofMaryland, Baltimore, MD, Lori Swanson,Attorney General of Minnesota, St. Paul,MN, Joseph A. Foster, Attorney Generalof New Hampshire, Concord, NH, HectorBalderas, Attorney General of New Mexi-co, Santa Fe, NM, Eric T. Schneiderman,Attorney General of New York, Albany,NY, Roy Cooper, Attorney General ofNorth Carolina, Raleigh, NC, Ellen F.Rosenblum, Attorney General of Oregon,Salem, OR, Peter F. Kilmartin, AttorneyGeneral of Rhode Island, Providence, RI,William H. Sorrell, Attorney General ofVermont, Montpelier, VT, Karl A. Racine,Attorney General for the District of Co-lumbia, Washington, DC, George A. Nil-son, City Solicitor for the City of Balti-more, Baltimore, MD, Stephen R. Patton,Corporation Counsel of the City of Chica-go, Chicago, IL, Michael A. Siragusa,County Attorney for the County of Erie,


Buffalo, NY, Zachary W. Carter, Corpora-tion Counsel of the City of New York, NewYork, NY, for Respondents.

Neil D. Gordon, Assistant Attorney Gen-eral, Environment, Natural Resources, andAgriculture Division, Bill Schuette, Michi-gan Attorney General, Aaron D. Lind-strom, Solicitor General, Counsel of Rec-ord, Lansing, MI, for Petitioners.

Luther Strange, Attorney General, Stateof Alabama, Office of the Attorney Gener-al, Montgomery, AL, for Petitioner Stateof Alabama.

Michael C. Geraghty, Attorney General,Steven E. Mulder, Assistant AttorneyGeneral, Anchorage, AK, for PetitionerState of Alaska.

Mark Brnovich, Attorney General,James T. Skardon, Assistant AttorneyGeneral, Environmental Enforcement Sec-tion, Phoenix, AZ, Counsel for PetitionerState of Arizona.

Leslie Rutledge, Attorney General, At-torney General, Little Rock, AR, for Peti-tioner State of Arkansas, ex rel. DustinMcDaniel, Attorney General.

Lawrence G. Wasden, Attorney General,Boise, ID, for Petitioner State of Idaho,

Gregory F. Zoeller, Attorney General,Valerie Tachtiris, Deputy Attorney Gener-al, Office of the Attorney General, India-napolis, IN, for Petitioner State of Indiana.

Michael Bousselot, Des Moines, for Peti-tioner Terry E. Branstad, Governor of theState of Iowa on behalf of the People ofIowa.

Derek Schmidt, Attorney General, Jef-frey A. Chanay, Chief Deputy AttorneyGeneral, Office of the Attorney General ofKansas, Topeka, KS, for Petitioner Stateof Kansas.

Jack Conway, Attorney General, Frank-fort, KY, for Petitioner Jack Conway.

Jim Hood, Attorney General, Harold E.Pizzetta III, Assistant Attorney General,Director, Civil Litigation Division, Jack-son, MS, for Petitioner State of Mississip-pi.

Chris Koster, Attorney General, JamesR. Layton, Jefferson City, MO, for Peti-tioner State of Missouri.

Doug Peterson, Attorney General, DaveBydalek, Chief Deputy Attorney General,Blake Johnson, Assistant Attorney Gener-al, Lincoln, NE, for Petitioner State ofNebraska.

Wayne Stenehjem, Attorney General,Margaret I. Olson, Assistant AttorneyGeneral, Office of Attorney General, Bis-marck, ND, for Petitioner State of NorthDakota.

Michael DeWine, Attorney General, Co-lumbus, OH, for Petitioner State of Ohio.

E. Scott Pruitt, Attorney General, Pat-rick Wyrick, Solicitor General, P. ClaytonEubanks, Deputy Solicitor General, Officeof the Attorney General of Oklahoma,Oklahoma City, OK, for Petitioner State ofOklahoma.

Alan Wilson, Attorney General, RobertD. Cook, Solicitor General, James EmorySmith, Jr., Deputy Attorney General, Of-fice of the Attorney General, Columbia,SC, for Petitioner State of South Carolina.

Ken Paxton, Attorney General, CharlesE. Roy, First Assistant Attorney General,James E. Davis, Deputy Attorney Generalfor Civil Litigation, Jon Niermann, Chief,Environmental Protection Division, MarkWalters, Assistant Attorney General, MaryE. Smith, Assistant Attorney General, Of-fice of the Attorney General of Texas, En-vironmental Protection Division, Austin,TX, for Petitioners State of Texas, TexasCommission on Environmental Quality,Texas Public Utility Commission, and Rail-road Commission of Texas,


Sean D. Reyes, Attorney General, SaltLake City, UT, for Petitioner State ofUtah.

Patrick Morrisey, Attorney General,Charleston, WV, for Petitioner State ofWest Virginia,

Peter K. Michael, Attorney General, Mi-chael J. McGrady, Senior Assistant Attor-ney General, Cheyenne, WY, for PetitionerState of Wyoming.

Brendan K. Collins, Counsel of Record,Robert B. McKinstry, Jr., Ronald M. Var-num, Lorene L. Boudreau, Ballard SpahrLLP, Philadelphia, PA, Paul M. Smith,Matthew E. Price, Erica L. Ross, Jenner& Block LLP, Washington, DC, for Indus-try Respondents.

Sanjay Narayan, Sierra Club, San Fran-cisco, CA, for Respondent Sierra Club.

James S. Pew, Neil E. Gormley, Ear-thjustice, Washington, D.C., for Respon-dent Chesapeake, Bay Foundation CleanAir Council, National Association for theAdvancement of Colored People, SierraClub, and Waterkeeper Alliance,

Sean H. Donahue, Counsel of Record,David T. Goldberg, Donahue & Goldberg,LLP, Washington, D.C., Vickie L. Patton,Graham McCahan, Tomás Carbonell, Envi-ronmental Defense Fund, Boulder, CO, forRespondent Environmental Defense Fund.

John Suttles, Southern EnvironmentalLaw Center, Chapel Hill, NC, for Respon-dent American Academy of Pediatrics,American Lung Association, AmericanNurses Association, American PublicHealth Association and Physicians for So-cial Responsibility.

Ann Brewster Weeks, Darin T. Schroe-der, Clean Air Task Force, Boston, MA,for Respondent Citizens for Pennsylvania’sFuture, Conservation Law Foundation,Environment America, Izaak WaltonLeague of America, Natura, Resources

Council of Maine, and Ohio EnvironmentalCouncil.

John D. Walke, Natural Resources De-fense Council, Washington, D.C., for Re-spondent Natural Resource Defense Coun-cil.

For U.S. Supreme Court briefs, see:

2015 WL 1247185 (Reply.Brief)


2015 WL 860737 (Resp.Brief)




2015 WL 294672 (Pet.Brief)

Justice SCALIA delivered the opinion ofthe Court.

The Clean Air Act directs the Environ-mental Protection Agency to regulateemissions of hazardous air pollutants frompower plants if the Agency finds regula-tion ‘‘appropriate and necessary.’’ Wemust decide whether it was reasonable forEPA to refuse to consider cost when mak-ing this finding.

I

The Clean Air Act establishes a series ofregulatory programs to control air pollu-tion from stationary sources (such as refin-eries and factories) and moving sources(such as cars and airplanes). 69 Stat. 322,as amended, 42 U.S.C. §§ 7401–7671q.One of these is the National EmissionsStandards for Hazardous Air PollutantsProgram—the hazardous-air-pollutantsprogram, for short. Established in its cur-rent form by the Clean Air Act Amend-ments of 1990, 104 Stat. 2531, this programtargets for regulation stationary-sourceemissions of more than 180 specified ‘‘haz-ardous air pollutants.’’ § 7412(b).

For stationary sources in general, theapplicability of the program depends in


part on how much pollution the sourceemits. A source that emits more than 10tons of a single pollutant or more than 25tons of a combination of pollutants peryear is called a major source. § 7412(a)(1).EPA is required to regulate all majorsources under the program. § 7412(c)(1)-(2). A source whose emissions do notcross the just-mentioned thresholds iscalled an area source. § 7412(a)(2). TheAgency is required to regulate an areasource under the program if it ‘‘presents athreat of adverse effects to human healthor the environment TTT warranting regula-tion.’’ § 7412(c)(3).

At the same time, Congress establisheda unique procedure to determine the appli-cability of the program to fossil-fuel-firedpower plants. The Act refers to theseplants as electric utility steam generatingunits, but we will simply call them powerplants. Quite apart from the hazardous-air-pollutants program, the Clean Air ActAmendments of 1990 subjected powerplants to various regulatory requirements.The parties agree that these requirementswere expected to have the collateral effectof reducing power plants’ emissions of haz-ardous air pollutants, although the extentof the reduction was unclear. Congressdirected the Agency to ‘‘perform a study ofthe hazards to public health reasonablyanticipated to occur as a result of emis-sions by [power plants] of [hazardous airpollutants] after imposition of the require-ments of this chapter.’’ § 7412(n)(1)(A). Ifthe Agency ‘‘finds TTT regulation is appro-priate and necessary after considering theresults of the study,’’ it ‘‘shall regulate[power plants] under [§ 7412].’’ Ibid.EPA has interpreted the Act to mean thatpower plants become subject to regulationon the same terms as ordinary major andarea sources, see 77 Fed.Reg. 9330 (2012),and we assume without deciding that itwas correct to do so.

And what are those terms? EPA mustfirst divide sources covered by the pro-gram into categories and subcategories inaccordance with statutory criteria.§ 7412(c)(1). For each category or subca-tegory, the Agency must promulgate cer-tain minimum emission regulations, knownas floor standards. § 7412(d)(1), (3). Thestatute generally calibrates the floor stan-dards to reflect the emissions limitationsalready achieved by the best-performing12% of sources within the category or sub-category. § 7412(d)(3). In some circum-stances, the Agency may also impose morestringent emission regulations, known asbeyond-the-floor standards. The statuteexpressly requires the Agency to considercost (alongside other specified factors)when imposing beyond-the-floor standards.§ 7412(d)(2).

EPA completed the study required by§ 7412(n)(1)(A) in 1998, 65 Fed.Reg. 79826(2000), and concluded that regulation ofcoal- and oil-fired power plants was ‘‘ap-propriate and necessary’’ in 2000, id., at79830. In 2012, it reaffirmed the appro-priate-and-necessary finding, divided pow-er plants into subcategories, and promul-gated floor standards. The Agency foundregulation ‘‘appropriate’’ because (1) powerplants’ emissions of mercury and otherhazardous air pollutants posed risks to hu-man health and the environment and (2)controls were available to reduce theseemissions. 77 Fed.Reg. 9363. It foundregulation ‘‘necessary’’ because the imposi-tion of the Act’s other requirements didnot eliminate these risks. Ibid. EPA con-cluded that ‘‘costs should not be consid-ered’’ when deciding whether power plantsshould be regulated under § 7412. Id., at9326.

In accordance with Executive Order, theAgency issued a ‘‘Regulatory Impact Anal-ysis’’ alongside its regulation. This analy-sis estimated that the regulation would


force power plants to bear costs of $9.6billion per year. Id., at 9306. The Agencycould not fully quantify the benefits ofreducing power plants’ emissions of haz-ardous air pollutants; to the extent itcould, it estimated that these benefits wereworth $4 to $6 million per year. Ibid. Thecosts to power plants were thus between1,600 and 2,400 times as great as the quan-tifiable benefits from reduced emissions ofhazardous air pollutants. The Agencycontinued that its regulations would haveancillary benefits—including cutting powerplants’ emissions of particulate matter andsulfur dioxide, substances that are not cov-ered by the hazardous-air-pollutants pro-gram. Although the Agency’s appropri-ate-and-necessary finding did not rest onthese ancillary effects, id., at 9320, theregulatory impact analysis took them intoaccount, increasing the Agency’s estimateof the quantifiable benefits of its regula-tion to $37 to $90 billion per year, id., at9306. EPA concedes that the regulatoryimpact analysis ‘‘played no role’’ in itsappropriate-and-necessary finding. Brieffor Federal Respondents 14.

Petitioners (who include 23 States)sought review of EPA’s rule in the Courtof Appeals for the D.C. Circuit. As rele-vant here, they challenged the Agency’srefusal to consider cost when decidingwhether to regulate power plants. TheCourt of Appeals upheld the Agency’s de-cision not to consider cost, with JudgeKavanaugh concurring in part and dissent-ing in part. White Stallion Energy Cen-ter, LLC v. EPA, 748 F.3d 1222 (2014) (percuriam ). We granted certiorari. 574U.S. ––––, 135 S.Ct. 702, 703, 190 L.Ed.2d434 (2014).

II

[1–3] Federal administrative agenciesare required to engage in ‘‘reasoned deci-sionmaking.’’ Allentown Mack Sales &

Service, Inc. v. NLRB, 522 U.S. 359, 374,118 S.Ct. 818, 139 L.Ed.2d 797 (1998) (in-ternal quotation marks omitted). ‘‘Notonly must an agency’s decreed result bewithin the scope of its lawful authority, butthe process by which it reaches that resultmust be logical and rational.’’ Ibid. Itfollows that agency action is lawful only ifit rests ‘‘on a consideration of the relevantfactors.’’ Motor Vehicle Mfrs. Assn. ofUnited States, Inc. v. State Farm Mut.Automobile Ins. Co., 463 U.S. 29, 43, 103S.Ct. 2856, 77 L.Ed.2d 443 (1983) (internalquotation marks omitted).

[4] EPA’s decision to regulate powerplants under § 7412 allowed the Agency toreduce power plants’ emissions of hazard-ous air pollutants and thus to improvepublic health and the environment. Butthe decision also ultimately cost powerplants, according to the Agency’s own esti-mate, nearly $10 billion a year. EPA re-fused to consider whether the costs of itsdecision outweighed the benefits. TheAgency gave cost no thought at all, be-cause it considered cost irrelevant to itsinitial decision to regulate.

EPA’s disregard of cost rested on itsinterpretation of § 7412(n)(1)(A), which, torepeat, directs the Agency to regulatepower plants if it ‘‘finds such regulation isappropriate and necessary.’’ The Agencyaccepts that it could have interpreted thisprovision to mean that cost is relevant tothe decision to add power plants to theprogram. Tr. of Oral Arg. 44. But itchose to read the statute to mean that costmakes no difference to the initial decisionto regulate. See 76 Fed.Reg. 24988 (2011)(‘‘We further interpret the term ‘appropri-ate’ to not allow for the consideration ofcosts’’); 77 Fed.Reg. 9327 (‘‘Cost does nothave to be read into the definition of ‘ap-propriate’ ’’).

[5] We review this interpretation un-der the standard set out in Chevron U.S.A.


Inc. v. Natural Resources Defense Coun-cil, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81L.Ed.2d 694 (1984). Chevron directscourts to accept an agency’s reasonableresolution of an ambiguity in a statute thatthe agency administers. Id., at 842–843,104 S.Ct. 2778. Even under this deferen-tial standard, however, ‘‘agencies must op-erate within the bounds of reasonable in-terpretation.’’ Utility Air RegulatoryGroup v. EPA, 573 U.S. ––––, ––––, 134S.Ct. 2427, 2442, 189 L.Ed.2d 372 (2014)(internal quotation marks omitted). EPAstrayed far beyond those bounds when itread § 7412(n)(1) to mean that it couldignore cost when deciding whether to reg-ulate power plants.

A

[6] The Clean Air Act treats powerplants differently from other sources forpurposes of the hazardous-air-pollutantsprogram. Elsewhere in § 7412, Congressestablished cabined criteria for EPA toapply when deciding whether to includesources in the program. It required theAgency to regulate sources whose emis-sions exceed specified numerical thresh-olds (major sources). It also required theAgency to regulate sources whose emis-sions fall short of these thresholds (areasources) if they ‘‘presen[t] a threat of ad-verse effects to human health or the envi-ronment TTT warranting regulation.’’§ 7412(c)(3). In stark contrast, Congressinstructed EPA to add power plants to theprogram if (but only if) the Agency findsregulation ‘‘appropriate and necessary.’’§ 7412(n)(1)(A). One does not need toopen up a dictionary in order to realize thecapaciousness of this phrase. In particu-lar, ‘‘appropriate’’ is ‘‘the classic broad andall-encompassing term that naturally andtraditionally includes consideration of allthe relevant factors.’’ 748 F.3d, at 1266(opinion of Kavanaugh, J.). Although thisterm leaves agencies with flexibility, an

agency may not ‘‘entirely fai[l] to consideran important aspect of the problem’’ whendeciding whether regulation is appropriate.State Farm, supra, at 43, 103 S.Ct. 2856.

[7] Read naturally in the present con-text, the phrase ‘‘appropriate and neces-sary’’ requires at least some attention tocost. One would not say that it is evenrational, never mind ‘‘appropriate,’’ to im-pose billions of dollars in economic costs inreturn for a few dollars in health or envi-ronmental benefits. In addition, ‘‘cost’’ in-cludes more than the expense of complyingwith regulations; any disadvantage couldbe termed a cost. EPA’s interpretationprecludes the Agency from consideringany type of cost—including, for instance,harms that regulation might do to humanhealth or the environment. The Govern-ment concedes that if the Agency were tofind that emissions from power plants dodamage to human health, but that thetechnologies needed to eliminate theseemissions do even more damage to humanhealth, it would still deem regulation ap-propriate. See Tr. of Oral Arg. 70. Noregulation is ‘‘appropriate’’ if it does signif-icantly more harm than good.

[8] There are undoubtedly settings inwhich the phrase ‘‘appropriate and neces-sary’’ does not encompass cost. But this isnot one of them. Section 7412(n)(1)(A)directs EPA to determine whether ‘‘regu-lation is appropriate and necessary.’’(Emphasis added.) Agencies have longtreated cost as a centrally relevant factorwhen deciding whether to regulate. Con-sideration of cost reflects the understand-ing that reasonable regulation ordinarilyrequires paying attention to the advan-tages and the disadvantages of agency de-cisions. It also reflects the reality that‘‘too much wasteful expenditure devoted toone problem may well mean considerablyfewer resources available to deal effective-


ly with other (perhaps more serious) prob-lems.’’ Entergy Corp. v. Riverkeeper, Inc.,556 U.S. 208, 233, 129 S.Ct. 1498, 173L.Ed.2d 369 (2009) (BREYER, J., concur-ring in part and dissenting in part).Against the backdrop of this establishedadministrative practice, it is unreasonableto read an instruction to an administrativeagency to determine whether ‘‘regulationis appropriate and necessary’’ as an invita-tion to ignore cost.

Statutory context reinforces the rele-vance of cost. The procedures governingpower plants that we consider today ap-pear in § 7412(n)(1), which bears the cap-tion ‘‘Electric utility steam generatingunits.’’ In subparagraph (A), the part ofthe law that has occupied our attention sofar, Congress required EPA to study thehazards to public health posed by powerplants and to determine whether regula-tion is appropriate and necessary. But insubparagraphs (B) and (C), Congresscalled for two additional studies. One ofthem, a study into mercury emissions frompower plants and other sources, must con-sider ‘‘the health and environmental effectsof such emissions, technologies which areavailable to control such emissions, and thecosts of such technologies.’’ § 7412(n)(1)(B)(emphasis added). This directive to EPAto study cost is a further indication of therelevance of cost to the decision to regu-late.

[9] In an effort to minimize this ex-press reference to cost, EPA now arguesthat § 7412(n)(1)(A) requires it to consideronly the study mandated by that provision,not the separate mercury study, beforedeciding whether to regulate power plants.But when adopting the regulations beforeus, the Agency insisted that the provisionsconcerning all three studies ‘‘provide aframework for [EPA’s] determination ofwhether to regulate [power plants].’’ 76Fed.Reg. 24987. It therefore decided ‘‘to

interpret the scope of the appropriate andnecessary finding in the context of allthree studies.’’ 77 Fed.Reg. 9325 (empha-sis added). For example:

1 EPA considered environmental effectsrelevant to the appropriate-and-neces-sary finding. It deemed the mercurystudy’s reference to this factor ‘‘directevidence that Congress was concernedwith environmental effects.’’ 76 Fed.Reg. 24987.

1 EPA considered availability of controlsrelevant to the appropriate-and-neces-sary finding. It thought that doing sowas ‘‘consistent with’’ the mercurystudy’s reference to availability of con-trols. Id., at 24989.

1 EPA concluded that regulation of pow-er plants would be appropriate andnecessary even if a single pollutantemitted by them posed a hazard tohealth or the environment. It believedthat ‘‘Congress’ focus’’ on a single pol-lutant in the mercury study ‘‘sup-port[ed]’’ this interpretation. Ibid.

EPA has not explained why§ 7412(n)(1)(B)’s reference to ‘‘environ-mental effects TTT and TTT costs’’ provides‘‘direct evidence that Congress was con-cerned with environmental effects,’’ butnot ‘‘direct evidence’’ that it was concernedwith cost. Chevron allows agencies tochoose among competing reasonable inter-pretations of a statute; it does not licenseinterpretive gerrymanders under which anagency keeps parts of statutory context itlikes while throwing away parts it doesnot.

B

EPA identifies a handful of reasons tointerpret § 7412(n)(1)(A) to mean that costis irrelevant to the initial decision to regu-late. We find those reasons unpersuasive.

EPA points out that other parts of theClean Air Act expressly mention cost,


while § 7412(n)(1)(A) does not. But thisobservation shows only that§ 7412(n)(1)(A)’s broad reference to appro-priateness encompasses multiple relevantfactors (which include but are not limitedto cost); other provisions’ specific refer-ences to cost encompass just cost. It isunreasonable to infer that, by expresslymaking cost relevant to other decisions,the Act implicitly makes cost irrelevant tothe appropriateness of regulating powerplants. (By way of analogy, the FourthAmendment’s Reasonableness Clause re-quires searches to be ‘‘[r]easonable,’’ whileits Warrant Clause requires warrants tobe supported by ‘‘probable cause.’’ No-body would argue that, by expressly mak-ing level of suspicion relevant to the validi-ty of a warrant, the Fourth Amendmentimplicitly makes level of suspicion categor-ically irrelevant to the reasonableness of asearch. To the contrary, all would agreethat the expansive word ‘‘reasonable’’ en-compasses degree of suspicion alongsideother relevant circumstances.) Otherparts of the Clean Air Act also expresslymention environmental effects, while§ 7412(n)(1)(A) does not. Yet that did notstop EPA from deeming environmental ef-fects relevant to the appropriateness ofregulating power plants.

[10] Along similar lines, EPA seekssupport in this Court’s decision in Whit-man v. American Trucking Assns., Inc.,531 U.S. 457, 121 S.Ct. 903, 149 L.Ed.2d 1(2001). There, the Court addressed a pro-vision of the Clean Air Act requiring EPAto set ambient air quality standards atlevels ‘‘requisite to protect the publichealth’’ with an ‘‘adequate margin of safe-ty.’’ 42 U.S.C. § 7409(b). Read naturally,that discrete criterion does not encompasscost; it encompasses health and safety.The Court refused to read that provisionas carrying with it an implicit authoriza-tion to consider cost, in part because au-

thority to consider cost had ‘‘elsewhere,and so often, been expressly granted.’’531 U.S., at 467, 121 S.Ct. 903. AmericanTrucking thus establishes the modest prin-ciple that where the Clean Air Act ex-pressly directs EPA to regulate on thebasis of a factor that on its face does notinclude cost, the Act normally should notbe read as implicitly allowing the Agencyto consider cost anyway. That principlehas no application here. ‘‘Appropriate andnecessary’’ is a far more comprehensivecriterion than ‘‘requisite to protect thepublic health’’; read fairly and in context,as we have explained, the term plainlysubsumes consideration of cost.

Turning to the mechanics of the hazard-ous-air-pollutants program, EPA arguesthat it need not consider cost when firstdeciding whether to regulate power plantsbecause it can consider cost later whendeciding how much to regulate them. Thequestion before us, however, is the mean-ing of the ‘‘appropriate and necessary’’standard that governs the initial decisionto regulate. And as we have discussed,context establishes that this expansivestandard encompasses cost. Cost may be-come relevant again at a later stage of theregulatory process, but that possibilitydoes not establish its irrelevance at thisstage. In addition, once the Agency de-cides to regulate power plants, it mustpromulgate certain minimum or floor stan-dards no matter the cost (here, nearly $10billion a year); the Agency may considercost only when imposing regulations be-yond these minimum standards. ByEPA’s logic, someone could decide wheth-er it is ‘‘appropriate’’ to buy a Ferrariwithout thinking about cost, because heplans to think about cost later when decid-ing whether to upgrade the sound system.

[11] EPA argues that the Clean AirAct makes cost irrelevant to the initialdecision to regulate sources other than


power plants. The Agency claims that it isreasonable to interpret § 7412(n)(1)(A) ina way that ‘‘harmonizes’’ the program’streatment of power plants with its treat-ment of other sources. This line of rea-soning overlooks the whole point of havinga separate provision about power plants:treating power plants differently from oth-er stationary sources. Congress craftednarrow standards for EPA to apply whendeciding whether to regulate othersources; in general, these standards con-cern the volume of pollution emitted by thesource, § 7412(c)(1), and the threat posedby the source ‘‘to human health or theenvironment,’’ § 7412(c)(3). But Congresswrote the provision before us more expan-sively, directing the Agency to regulatepower plants if ‘‘appropriate and neces-sary.’’ ‘‘That congressional election settlesthis case. [The Agency’s] preference forsymmetry cannot trump an asymmetricalstatute.’’ CSX Transp., Inc. v. AlabamaDept. of Revenue, 562 U.S. 277, 296, 131S.Ct. 1101, 179 L.Ed.2d 37 (2011).

EPA persists that Congress treatedpower plants differently from othersources because of uncertainty aboutwhether regulation of power plants wouldstill be needed after the application of therest of the Act’s requirements. That isundoubtedly one of the reasons Congresstreated power plants differently; hence§ 7412(n)(1)(A)’s requirement to studyhazards posed by power plants’ emissions‘‘after imposition of the requirements of[the rest of the Act].’’ But if uncertaintyabout the need for regulation were theonly reason to treat power plants differ-ently, Congress would have required theAgency to decide only whether regulationremains ‘‘necessary,’’ not whether regula-tion is ‘‘appropriate and necessary.’’ Inany event, EPA stated when it adopted therule that ‘‘Congress did not limit [the]appropriate and necessary inquiry to [thestudy mentioned in § 7412(n)(1)(A) ].’’ 77

Fed.Reg. 9325. The Agency instead decid-ed that the appropriate-and-necessaryfinding should be understood in light of allthree studies required by § 7412(n)(1), andas we have discussed, one of those threestudies reflects concern about cost.

C

[12] The dissent does not embraceEPA’s far-reaching claim that Congressmade costs altogether irrelevant to thedecision to regulate power plants. In-stead, it maintains that EPA need not‘‘explicitly analyze costs’’ before deemingregulation appropriate, because other fea-tures of the regulatory program will ontheir own ensure the cost-effectiveness ofregulation. Post, at 2714 (opinion of KA-GAN, J.). This line of reasoning contra-dicts the foundational principle of adminis-trative law that a court may uphold agencyaction only on the grounds that the agencyinvoked when it took the action. SEC v.Chenery Corp., 318 U.S. 80, 87, 63 S.Ct.454, 87 L.Ed. 626 (1943). When it deemedregulation of power plants appropriate,EPA said that cost was irrelevant to thatdetermination—not that cost-benefit analy-sis would be deferred until later. Muchless did it say (what the dissent now con-cludes) that the consideration of cost atsubsequent stages will ensure that thecosts are not disproportionate to the bene-fits. What it said is that cost is irrelevantto the decision to regulate.

That is enough to decide these cases.But for what it is worth, the dissent vastlyoverstates the influence of cost at laterstages of the regulatory process. For ex-ample, the dissent claims that the floorstandards—which the Act calibrates to re-flect emissions limitations already achievedby the best-performing sources in the in-dustry—reflect cost considerations, be-cause the best-performing power plants‘‘must have considered costs in arriving at


their emissions outputs.’’ Post, at 2719.EPA did not rely on this argument, and itis not obvious that it is correct. Becausepower plants are regulated under otherfederal and state laws, the best-performingpower plants’ emissions limitations mightreflect cost-blind regulation rather thancost-conscious decisions. Similarly, thedissent suggests that EPA may considercost when dividing sources into categoriesand subcategories. Post, at 2720. Yetaccording to EPA, ‘‘it is not appropriate topremise subcategorization on costs.’’ 77Fed.Reg. 9395 (emphasis added). Thatstatement presumably explains the dis-sent’s carefully worded observation thatEPA considered ‘‘technological, geograph-ic, and other factors’’ when drawing cate-gories, post, at 2720, n. 4, which factorswere in turn ‘‘related to costs’’ in someway, post, at 2719. Attenuated connec-tions such as these hardly support theassertion that EPA’s regulatory processfeatured ‘‘exhaustive consideration ofcosts,’’ post, at 2714.

All in all, the dissent has at most shownthat some elements of the regulatoryscheme mitigate cost in limited ways; ithas not shown that these elements ensurecost-effectiveness. If (to take a hypotheti-cal example) regulating power plantswould yield $5 million in benefits, the pros-pect of mitigating cost from $11 billion to$10 billion at later stages of the programwould not by itself make regulation appro-priate. In all events, we need not pursuethese points, because EPA did not say thatthe parts of the regulatory program men-tioned by the dissent prevent the imposi-tion of costs far in excess of benefits.‘‘[EPA’s] action must be measured by what[it] did, not by what it might have done.’’Chenery, supra, at 93–94, 63 S.Ct. 454.

D

[13] Our reasoning so far establishesthat it was unreasonable for EPA to read

§ 7412(n)(1)(A) to mean that cost is irrele-vant to the initial decision to regulate pow-er plants. The Agency must considercost—including, most importantly, cost ofcompliance—before deciding whether reg-ulation is appropriate and necessary. Weneed not and do not hold that the lawunambiguously required the Agency, whenmaking this preliminary estimate, to con-duct a formal cost-benefit analysis in whicheach advantage and disadvantage is as-signed a monetary value. It will be up tothe Agency to decide (as always, within thelimits of reasonable interpretation) how toaccount for cost.

Some of the respondents supportingEPA ask us to uphold EPA’s action be-cause the accompanying regulatory impactanalysis shows that, once the rule’s ancil-lary benefits are considered, benefitsplainly outweigh costs. The dissent simi-larly relies on these ancillary benefitswhen insisting that ‘‘the outcome here[was] a rule whose benefits exceed itscosts.’’ Post, at 2722. As we have justexplained, however, we may uphold agencyaction only upon the grounds on which theagency acted. Even if the Agency couldhave considered ancillary benefits whendeciding whether regulation is appropriateand necessary—a point we need not ad-dress—it plainly did not do so here. Inthe Agency’s own words, the administra-tive record ‘‘utterly refutes [the] assertionthat [ancillary benefits] form the basis forthe appropriate and necessary finding.’’77 Fed.Reg. 9323. The Government con-cedes, moreover, that ‘‘EPA did not relyon the [regulatory impact analysis] whendeciding to regulate power plants,’’ andthat ‘‘[e]ven if EPA had considered costs,it would not necessarily have adopted TTTthe approach set forth in [that analysis].’’Brief for Federal Respondents 53–54.

* * *


We hold that EPA interpreted§ 7412(n)(1)(A) unreasonably when itdeemed cost irrelevant to the decision toregulate power plants. We reverse thejudgment of the Court of Appeals for theD.C. Circuit and remand the cases forfurther proceedings consistent with thisopinion.

It is so ordered.

Justice THOMAS, concurring.

The Environmental Protection Agency(EPA) asks the Court to defer to its inter-pretation of the phrase ‘‘appropriate andnecessary’’ in § 112(n)(1)(A) of the CleanAir Act, 42 U.S.C. § 7412. Justice SCA-LIA’s opinion for the Court demonstrateswhy EPA’s interpretation deserves no def-erence under our precedents. I write sep-arately to note that its request for defer-ence raises serious questions about theconstitutionality of our broader practice ofdeferring to agency interpretations of fed-eral statutes. See Chevron U.S.A. Inc. v.Natural Resources Defense Council, Inc.,467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d694 (1984).

Chevron deference is premised on ‘‘apresumption that Congress, when it leftambiguity in a statute meant for imple-mentation by an agency, understood thatthe ambiguity would be resolved, first andforemost, by the agency, and desired theagency (rather than the courts) to possesswhatever degree of discretion the ambigui-ty allows.’’ Smiley v. Citibank (South Da-kota), N. A., 517 U.S. 735, 740–741, 116S.Ct. 1730, 135 L.Ed.2d 25 (1996). Wemost often describe Congress’ supposedchoice to leave matters to agency discre-tion as an allocation of interpretive author-ity. See, e.g., National Cable & Telecom-munications Assn. v. Brand X InternetServices, 545 U.S. 967, 983, 125 S.Ct. 2688,162 L.Ed.2d 820 (2005) (referring to theagency as ‘‘the authoritative interpreter

(within the limits of reason) of [ambiguous]statutes’’). But we sometimes treat thatdiscretion as though it were a form oflegislative power. See, e.g., United Statesv. Mead Corp., 533 U.S. 218, 229, 121 S.Ct.2164, 150 L.Ed.2d 292 (2001) (noting thatthe agency ‘‘speak[s] with the force of lawwhen it addresses ambiguity in the statuteor fills a space in the enacted law’’ evenwhen ‘‘ ‘Congress did not actually have anintent’ as to a particular result’’). Eitherway, Chevron deference raises serious sep-aration-of-powers questions.

As I have explained elsewhere, ‘‘[T]hejudicial power, as originally understood,requires a court to exercise its indepen-dent judgment in interpreting and ex-pounding upon the laws.’’ Perez v. Mort-gage Bankers Assn., 575 U.S. ––––, ––––,135 S.Ct. 1199, 1217, 191 L.Ed.2d 186(2015) (opinion concurring in judgment).Interpreting federal statutes—includingambiguous ones administered by an agen-cy—‘‘calls for that exercise of independentjudgment.’’ Id., at ––––, 135 S.Ct., at1219. Chevron deference precludes judgesfrom exercising that judgment, forcingthem to abandon what they believe is ‘‘thebest reading of an ambiguous statute’’ infavor of an agency’s construction. BrandX, supra, at 983, 125 S.Ct. 2688. It thuswrests from Courts the ultimate interpre-tative authority to ‘‘say what the law is,’’Marbury v. Madison, 1 Cranch 137, 177, 2L.Ed. 60 (1803), and hands it over to theExecutive. See Brand X, supra, at 983,125 S.Ct. 2688 (noting that the judicialconstruction of an ambiguous statute is‘‘not authoritative’’). Such a transfer is intension with Article III’s Vesting Clause,which vests the judicial power exclusivelyin Article III courts, not administrativeagencies. U.S. Const., Art. III, § 1.

In reality, as the Court illustrates in thecourse of dismantling EPA’s interpretationof § 112(n)(1)(A), agencies ‘‘interpreting’’


ambiguous statutes typically are not en-gaged in acts of interpretation at all. See,e.g., ante, at 2708. Instead, as Chevronitself acknowledged, they are engaged inthe ‘‘ ‘formulation of policy.’ ’’ 467 U.S., at843, 104 S.Ct. 2778. Statutory ambiguitythus becomes an implicit delegation ofrule-making authority, and that authorityis used not to find the best meaning of thetext, but to formulate legally binding rulesto fill in gaps based on policy judgmentsmade by the agency rather than Congress.

Although acknowledging this fact mightallow us to escape the jaws of Article III’sVesting Clause, it runs headlong into theteeth of Article I’s, which vests ‘‘[a]ll legis-lative Powers herein granted’’ in Congress.U.S. Const., Art. I, § 1. For if we give the‘‘force of law’’ to agency pronouncementson matters of private conduct as to which‘‘ ‘Congress did not actually have an in-tent,’ ’’ Mead, supra, at 229, 121 S.Ct.2164, we permit a body other than Con-gress to perform a function that requiresan exercise of the legislative power. SeeDepartment of Transportation v. Associa-tion of American Railroads, 575 U.S.––––, –––– – ––––, 135 S.Ct. 1225, 1251–1252, 191 L.Ed.2d 153 (2015) (THOMAS,J., concurring in judgment).

These cases bring into bold relief thescope of the potentially unconstitutionaldelegations we have come to countenancein the name of Chevron deference. WhatEPA claims for itself here is not the powerto make political judgments in implement-ing Congress’ policies, nor even the power

to make tradeoffs between competing poli-cy goals set by Congress, American Rail-roads, supra, at –––– – ––––, 135 S.Ct., at1250–1252 (opinion of THOMAS, J.) (col-lecting cases involving statutes that dele-gated this legislative authority). It is thepower to decide—without any particularfidelity to the text—which policy goalsEPA wishes to pursue. Should EPA wieldits vast powers over electric utilities toprotect public health? A pristine environ-ment? Economic security? We are toldthat the breadth of the word ‘‘appropriate’’authorizes EPA to decide for itself how toanswer that question. Compare 77 Fed.Reg. 9327 (2012) (‘‘[N]othing about thedefinition [of ‘‘appropriate’’] compels a con-sideration of costs’’ (emphasis added)) withTr. of Oral Arg. 42 (‘‘[T]he phrase appro-priate and necessary doesn’t, by its terms,preclude the EPA from considering cost’’(emphasis added)).1

Perhaps there is some unique historicaljustification for deferring to federal agen-cies, see Mead, supra, at 243, 121 S.Ct.2164 (SCALIA, J., dissenting), but thesecases reveal how paltry an effort we havemade to understand it or to confine our-selves to its boundaries. Although we holdtoday that EPA exceeded even the ex-tremely permissive limits on agency powerset by our precedents, we should bealarmed that it felt sufficiently emboldenedby those precedents to make the bid fordeference that it did here.2 As in otherareas of our jurisprudence concerning ad-

1. I can think of no name for such power otherthan ‘‘legislative power.’’ Had we deferred toEPA’s interpretation in these cases, then, wemight have violated another constitutionalcommand by abdicating our check on thepolitical branches—namely, our duty to en-force the rule of law through an exercise ofthe judicial power. Perez v. Mortgage BankersAssn., 575 U.S. ––––, –––– – ––––, 135 S.Ct.

1199, 1220–1221, 191 L.Ed.2d 186 (2015)(THOMAS, J., concurring in judgment).

2. This is not the first time an agency hasexploited our practice of deferring to agencyinterpretations of statutes. See, e.g., TexasDept. of Housing and Community Affairs v.Inclusive Communities Project, Inc., ––– U.S.––––, 135 S.Ct. 2507, 192 L.Ed.2d 514, 2015WL 2473449 (2015) (THOMAS, J., dissenting).


ministrative agencies, see, e.g., B & BHardware, Inc. v. Hargis Industries, Inc.,575 U.S. ––––, –––– – ––––, 135 S.Ct. 1293,1315–1318, 191 L.Ed.2d 222 (2015)(THOMAS, J., dissenting), we seem to bestraying further and further from the Con-stitution without so much as pausing to askwhy. We should stop to consider thatdocument before blithely giving the forceof law to any other agency ‘‘interpreta-tions’’ of federal statutes.

Justice KAGAN, with whom JusticeGINSBURG, Justice BREYER, andJustice SOTOMAYOR join, dissenting.

The Environmental Protection Agencyplaced emissions limits on coal and oilpower plants following a lengthy regulato-ry process during which the Agency care-fully considered costs. At the outset, EPAdetermined that regulating plants’ emis-sions of hazardous air pollutants is ‘‘appro-priate and necessary’’ given the harm theycause, and explained that it would takecosts into account in developing suitableemissions standards. Next, EPA dividedpower plants into groups based on techno-logical and other characteristics bearingsignificantly on their cost structures. Itrequired plants in each group to match theemissions levels already achieved by thebest-performing members of the samegroup—benchmarks necessarily reflectingthose plants’ own cost analyses. EPAthen adopted a host of measures designedto make compliance with its proposedemissions limits less costly for plants thatneeded to catch up with their cleanerpeers. And with only one narrow excep-tion, EPA decided not to impose any morestringent standards (beyond what someplants had already achieved on their own)because it found that doing so would notbe cost-effective. After all that, EPA con-ducted a formal cost-benefit study whichfound that the quantifiable benefits of itsregulation would exceed the costs up to

nine times over—by as much as $80 billioneach year. Those benefits include asmany as 11,000 fewer premature deathsannually, along with a far greater numberof avoided illnesses.

Despite that exhaustive consideration ofcosts, the Court strikes down EPA’s ruleon the ground that the Agency ‘‘unreason-ably TTT deemed cost irrelevant.’’ Ante, at2712. On the majority’s theory, the rule isinvalid because EPA did not explicitly ana-lyze costs at the very first stage of theregulatory process, when making its ‘‘ap-propriate and necessary’’ finding. Andthat is so even though EPA later tookcosts into account again and again and TTTso on. The majority thinks entirely imma-terial, and so entirely ignores, all the sub-sequent times and ways EPA consideredcosts in deciding what any regulationwould look like.

That is a peculiarly blinkered way for acourt to assess the lawfulness of an agen-cy’s rulemaking. I agree with the majori-ty—let there be no doubt about this—thatEPA’s power plant regulation would beunreasonable if ‘‘[t]he Agency gave cost nothought at all.’’ Ante, at 2706 (emphasisin original). But that is just not whathappened here. Over more than a decade,EPA took costs into account at multiplestages and through multiple means as itset emissions limits for power plants. Andwhen making its initial ‘‘appropriate andnecessary’’ finding, EPA knew it would doexactly that—knew it would thoroughlyconsider the cost-effectiveness of emissionsstandards later on. That context matters.The Agency acted well within its authorityin declining to consider costs at the open-ing bell of the regulatory process giventhat it would do so in every round thereaf-ter—and given that the emissions limitsfinally issued would depend crucially onthose accountings. Indeed, EPA could nothave measured costs at the process’s initial


stage with any accuracy. And the regula-tory path EPA chose parallels the one ithas trod in setting emissions limits, atCongress’s explicit direction, for every oth-er source of hazardous air pollutants overtwo decades. The majority’s decision thatEPA cannot take the same approachhere—its micromanagement of EPA’srulemaking, based on little more than theword ‘‘appropriate’’—runs counter to Con-gress’s allocation of authority between theAgency and the courts. Because EPAreasonably found that it was ‘‘appropriate’’to decline to analyze costs at a single stageof a regulatory proceeding otherwise im-bued with cost concerns, I respectfully dis-sent.

I

A

The Clean Air Act Amendments of 1990,as the majority describes, obligate EPA toregulate emissions of mercury and otherhazardous air pollutants from stationarysources discharging those substances inlarge quantities. See ante, at 2704 – 2705.For most industries, the statute prescribesthe same multi-step regulatory process.At the initial stage, EPA must decidewhether to regulate a source, based solelyon the quantity of pollutants it emits andtheir health and environmental effects.See 42 U.S.C. §§ 7412(a)(1), (a)(2), (c)(1),(c)(3); ante, at 2704 – 2705. Costs enterthe equation after that, affecting the emis-sions limits that the eventual regulationwill require. Under the statute, EPAmust divide sources into categories andsubcategories and then set ‘‘floor stan-dards’’ that reflect the average emissions

level already achieved by the best-per-forming 12% of sources within each group.See § 7412(d)(3); ante, at 2705. Every12% floor has cost concerns built right intoit because the top sources, as successfulactors in a market economy, have had toconsider costs in choosing their own emis-sions levels. Moreover, in establishingcategories and subcategories at this firststage, EPA can (significantly) raise or low-er the costs of regulation for each source,because different classification schemeswill alter the group—and so the emissionslevel—that the source has to match.1

Once the floor is set, EPA has to decidewhether to impose any stricter (‘‘beyond-the-floor’’) standards, ‘‘taking into consid-eration,’’ among other things, ‘‘the cost ofachieving such emissions reduction.’’§ 7412(d)(2); see ante, at 2705. Finally,by virtue of a longstanding Executive Or-der applying to significant rules issuedunder the Clean Air Act (as well as otherstatutes), the Agency must systematicallyassess the regulation’s costs and benefits.See Exec. Order No. 12866, 58 Fed.Reg.51735, 51738, 51741 (1993) (applying to allrules with an annual economic effect of atleast $100 million).

Congress modified that regulatoryscheme for power plants. It did so be-cause the 1990 amendments established aseparate program to control power plantemissions contributing to acid rain, andmany thought that just by complying withthose requirements, plants might reducetheir emissions of hazardous air pollutantsto acceptable levels. See ante, at 2704 –2705. That prospect counseled a ‘‘wait andsee’’ approach, under which EPA wouldgive the Act’s acid rain provisions a chance

1. Consider it this way: Floor standards equalthe top 12% of something, but until you knowthe something, you can’t know what it willtake to attain that level. To take a prosaicexample, the strongest 12% of NFL playerscan lift a lot more weight than the strongest

12% of human beings generally. To matchthe former, you will have to spend many morehours in the gym than to match the latter—and you will probably still come up short. Soeverything depends on the comparison group.


to achieve that side benefit before impos-ing any further regulation. Accordingly,Congress instructed EPA to ‘‘perform astudy of the hazards to public health rea-sonably anticipated’’ to result from powerplants’ emissions after the 1990 amend-ments had taken effect. § 7412(n)(1)(A).And Congress provided that EPA ‘‘shallregulate’’ those emissions only if the Agen-cy ‘‘finds such regulation is appropriateand necessary after considering the resultsof the [public health] study.’’ Ibid. Uponmaking such a finding, however, EPA is toregulate power plants as it does everyother stationary source: first, by catego-rizing plants and setting floor standardsfor the different groups; then by decidingwhether to regulate beyond the floors;and finally, by conducting the cost-benefitanalysis required by Executive Order.

EPA completed the mandated healthstudy in 1998, and the results gave muchcause for concern. The Agency concludedthat implementation of the acid rain provi-sions had failed to curb power plants’emissions of hazardous air pollutants. In-deed, EPA found, coal plants were ontrack to increase those emissions by asmuch as 30% over the next decade. See 1EPA, Study of Hazardous Air PollutantEmissions from Electric Utility SteamGenerating Units—Final Report to Con-gress, p. ES–25 (1998). And EPA deter-mined, focusing especially on mercury,that the substances released from powerplants cause substantial health harms.Noting that those plants are ‘‘the largest[non-natural] source of mercury emis-sions,’’ id., § 1.2.5.1, at 1–7, EPA foundthat children of mothers exposed to highdoses of mercury during pregnancy ‘‘haveexhibited a variety of developmental neu-

rological abnormalities,’’ including delayedwalking and talking, altered muscles, andcerebral palsy. Id., § 7.2.2, at 7–17 to 7–18; see also 7 EPA, Mercury Study Re-port to Congress, p. 6–31 (1997) (MercuryStudy) (estimating that 7% of women ofchildbearing age are exposed to mercuryin amounts exceeding a safe level).

Informed by its public health study andadditional data, EPA found in 2000 that itis ‘‘appropriate and necessary’’ to regulatepower plants’ emissions of mercury andother hazardous air pollutants. 65 Fed.Reg. 79830.2 Pulling apart those two ad-jectives, the Agency first stated that suchregulation is ‘‘appropriate’’ because thosepollutants ‘‘present[ ] significant hazards topublic health and the environment’’ andbecause ‘‘a number of control options’’ can‘‘effectively reduce’’ their emission. Ibid.EPA then determined that regulation is‘‘necessary’’ because other parts of the1990 amendments—most notably, the acidrain provisions—‘‘will not adequately ad-dress’’ those hazards. Ibid. In less bu-reaucratic terms, EPA decided that itmade sense to kick off the regulatory pro-cess given that power plants’ emissionspose a serious health problem, that solu-tions to the problem are available, and thatthe problem will remain unless action istaken.

B

If the regulatory process ended as wellas started there, I would agree with themajority’s conclusion that EPA failed toadequately consider costs. Cost is almostalways a relevant—and usually, a highlyimportant—factor in regulation. UnlessCongress provides otherwise, an agencyacts unreasonably in establishing ‘‘a stan-

2. EPA reaffirmed its ‘‘appropriate and neces-sary’’ finding in 2011 and 2012 when it issueda proposed rule and a final rule. See 76Fed.Reg. 24980 (2011) (‘‘The Agency’s appro-

priate and necessary finding was correct in2000, and it remains correct today’’); accord,77 Fed.Reg. 9310–9311 (2012).


dard-setting process that ignore[s] eco-nomic considerations.’’ Industrial UnionDept., AFL–CIO v. American PetroleumInstitute, 448 U.S. 607, 670, 100 S.Ct. 2844,65 L.Ed.2d 1010 (1980) (Powell, J., concur-ring in part and concurring in judgment).At a minimum, that is because such aprocess would ‘‘threaten[ ] to impose mas-sive costs far in excess of any benefit.’’Entergy Corp. v. Riverkeeper, Inc., 556U.S. 208, 234, 129 S.Ct. 1498, 173 L.Ed.2d369 (2009) (BREYER, J., concurring inpart and dissenting in part). And account-ing for costs is particularly important ‘‘inan age of limited resources available todeal with grave environmental problems,where too much wasteful expenditure de-voted to one problem may well mean con-siderably fewer resources available to dealeffectively with other (perhaps more seri-ous) problems.’’ Id., at 233, 129 S.Ct.1498; see ante, at 2707. As the Courtnotes, that does not require an agency toconduct a formal cost-benefit analysis ofevery administrative action. See ante, at2711. But (absent contrary indicationfrom Congress) an agency must take costsinto account in some manner before impos-ing significant regulatory burdens.

That proposition, however, does not de-cide the issue before us because the ‘‘ap-propriate and necessary’’ finding was onlythe beginning. At that stage, EPA knewthat a lengthy rulemaking process layahead of it; the determination of emissionslimits was still years away. And the Agen-cy, in making its kick-off finding, explicitlynoted that consideration of costs wouldfollow: ‘‘As a part of developing a regula-tion’’ that would impose those limits, ‘‘theeffectiveness and costs of controls will beexamined.’’ 65 Fed.Reg. 79830. Likewise,EPA explained that, in the course of writ-ing its regulation, it would explore regula-tory approaches ‘‘allowing for least-cost so-lutions.’’ Id., at 79830–79831. Thatmeans the Agency, when making its ‘‘ap-

propriate and necessary’’ finding, did notdecline to consider costs as part of theregulatory process. Rather, it declined toconsider costs at a single stage of thatprocess, knowing that they would come inlater on.

The only issue in these cases, then, iswhether EPA acted reasonably in struc-turing its regulatory process in that way—in making its ‘‘appropriate and necessaryfinding’’ based on pollution’s harmful ef-fects and channeling cost considerations tophases of the rulemaking in which emis-sion levels are actually set. Said other-wise, the question is not whether EPA canreasonably find it ‘‘appropriate’’ to regu-late without thinking about costs, full stop.It cannot, and it did not. Rather, thequestion is whether EPA can reasonablyfind it ‘‘appropriate’’ to trigger the regula-tory process based on harms (and techno-logical feasibility) alone, given that costswill come into play, in multiple ways and atmultiple stages, before any emission limitgoes into effect.

In considering that question, the verynature of the word ‘‘appropriate’’ matters.‘‘[T]he word ‘appropriate,’ ’’ this Court hasrecognized, ‘‘is inherently context-depen-dent’’: Giving it content requires payingattention to the surrounding circum-stances. Sossamon v. Texas, 563 U.S.277, ––––, 131 S.Ct. 1651, 1659, 179L.Ed.2d 700 (2011). (That is true, too, ofthe word ‘‘necessary,’’ although the major-ity spends less time on it. See Armour &Co. v. Wantock, 323 U.S. 126, 129–130, 65S.Ct. 165, 89 L.Ed. 118 (1944) (‘‘[T]heword ‘necessary’ TTT has always been rec-ognized as a word to be harmonized withits context’’).) And here that means con-sidering the place of the ‘‘appropriate andnecessary’’ finding in the broader regula-tory scheme—as a triggering mechanismthat gets a complex rulemaking going.The interpretive task is thus at odds with


the majority’s insistence on staring fixedly‘‘at this stage.’’ Ante, at 2709 (emphasisin original). The task instead demandstaking account of the entire regulatoryprocess in thinking about what is ‘‘appro-priate’’ in its first phase. The statutorylanguage, in other words, is a directive toremove one’s blinders and view thingswhole—to consider what it is fitting to doat the threshold stage given what will hap-pen at every other.

And that instruction is primarily givento EPA, not to courts: Judges may inter-fere only if the Agency’s way of orderingits regulatory process is unreasonable—i.e., something Congress would never haveallowed. The question here, as in ourseminal case directing courts to defer toagency interpretations of their own stat-utes, arises ‘‘not in a sterile textual vacu-um, but in the context of implementingpolicy decisions in a technical and complexarena.’’ Chevron U.S.A. Inc. v. NaturalResources Defense Council, Inc., 467 U.S.837, 863, 104 S.Ct. 2778, 81 L.Ed.2d 694(1984). EPA’s experience and expertise inthat arena—and courts’ lack of those at-tributes—demand that judicial review pro-ceed with caution and care. The majorityactually phrases this principle well, thoughhonors it only in the breach: Within widebounds, it is ‘‘up to the Agency to decideTTT how to account for cost.’’ Ante, at2711. That judges might have made dif-ferent regulatory choices—might have con-sidered costs in different ways at differenttimes—will not suffice to overturn EPA’saction where Congress, as here, chose notto speak directly to those matters, but toleave them to the Agency to decide.

All of that means our decision hereproperly rests on something the majoritythinks irrelevant: an understanding of thefull regulatory process relating to powerplants and of EPA’s reasons for consider-ing costs only after making its initial ‘‘ap-

propriate and necessary’’ finding. I there-fore turn to those issues, to demonstratethe simple point that should resolve thesecases: that EPA, in regulating powerplants’ emissions of hazardous air pollu-tants, accounted for costs in a reasonableway.

II

A

In the years after its ‘‘appropriate andnecessary’’ finding, EPA made good on itspromise to account for costs ‘‘[a]s a part ofdeveloping a regulation.’’ 65 Fed.Reg.79830; see supra, at 2717. For more thana decade, as EPA deliberated on and thenset emissions limits, costs came into thecalculus at nearly every turn. Reflectingthat consideration, EPA’s final rule notedthat steps taken during the regulatory pro-cess had focused on ‘‘flexib[ility] and cost-effective[ness]’’ and had succeeded in mak-ing ‘‘the rule less costly and compliancemore readily manageable.’’ 77 Fed.Reg.9306, 9376. And the regulation concludedthat ‘‘the benefits of th[e] rule’’ to publichealth and the environment ‘‘far outweighthe costs.’’ Id., at 9306.

Consistent with the statutory frame-work, EPA initially calculated floor stan-dards: emissions levels of the best-per-forming 12% of power plants in a givencategory or subcategory. The majoritymisperceives this part of the rulemakingprocess. It insists that EPA ‘‘must pro-mulgate certain TTT floor standards nomatter the cost.’’ Ante, at 2709. But thatignores two crucial features of the top–12% limits: first, the way in which anysuch standard intrinsically accounts forcosts, and second, the way in which theAgency’s categorization decisions yield dif-ferent standards for plants with differentcost structures.


The initial point is a fact of life in amarket economy: Costs necessarily play arole in any standard that uses powerplants’ existing emissions levels as abenchmark. After all, the best-performing12% of power plants must have consideredcosts in arriving at their emissions out-puts; that is how profit-seeking enterpris-es make decisions. And in doing so, theymust have selected achievable levels; else,they would have gone out of business.(The same would be true even if otherregulations influenced some of thosechoices, as the majority casually spec-ulates. See ante, at 2710.) Indeed, thisautomatic accounting for costs is why Con-gress adopted a market-leader-based stan-dard. As the Senate Report accompany-ing the 1990 amendments explained: ‘‘Costconsiderations are reflected in the selec-tion of emissions limitations which havebeen achieved in practice (rather thanthose which are merely theoretical) bysources of a similar type or character.’’ S.Rep. No. 101–228, pp. 168–169 (1989), 1990U.S.C.C.A.N. 3385, 3554. Of course, sucha standard remains technology-forcing: Itrequires laggards in the industry to catchup with frontrunners, sometimes at signifi-cant expense. But the benchmark is, bydefinition, one that some power plantshave achieved economically. And whenEPA made its ‘‘appropriate and necessary’’finding, it knew that fact—knew that theconsequence of doing so was to generatefloor standards with cost considerationsbaked right in.

Still more, EPA recognized that in mak-ing categorization decisions, it could takeaccount of multiple factors related to costsof compliance—and so avoid impracticableregulatory burdens. Suppose, to use a

simple example, that curbing emissions ismore technologically difficult—and there-fore more costly—for plants burning coalthan for plants burning oil. EPA can thenplace those two types of plants in differentcategories, so that coal plants need onlymatch other coal plants rather than havingto incur the added costs of meeting the topoil plants’ levels. Now multiply and com-plexify that example many times over. Asthe Agency noted when making its ‘‘appro-priate and necessary’’ finding, EPA‘‘build[s] flexibility’’ into the regulatory re-gime by ‘‘bas[ing] subcategorization on TTTthe size of a facility; the type of fuel usedat the facility; and the plant type,’’ andalso ‘‘may consider other relevant factorssuch as geographic conditions.’’ 65 Fed.Reg. 79830; see S.Rep. No. 101–228, at166 (listing similar factors and noting that‘‘[t]he proper definition of categories TTTwill assure maximum protection of publichealth and the environment while minimiz-ing costs imposed on the regulated com-munity’’). Using that classification tool,EPA can ensure that plants have to attainonly the emissions levels previouslyachieved by peers facing comparable costconstraints, so as to further protect plantsfrom unrealistic floor standards.

And that is exactly what EPA did overthe course of its rulemaking process, in-sisting on apples-to-apples comparisonsthat bring floor standards within reach ofdiverse kinds of power plants. Even inmaking its ‘‘appropriate and necessary’’finding, the Agency announced it woulddivide plants into the two categories men-tioned above: ‘‘coal-fired’’ and ‘‘oil-fired.’’65 Fed.Reg. 79830.3 Then, as the rule-making progressed, EPA went further.

3. EPA also determined at that stage that it is‘‘not appropriate or necessary’’ to regulatenatural gas plants’ emissions of hazardous airpollutants because they have only ‘‘negligible’’impacts. 65 Fed.Reg. 79831. That decision

meant that other plants would not have tomatch their cleaner natural gas counterparts,thus making the floor standards EPA estab-lished that much less costly to achieve.


Noting that different technologies signifi-cantly affect the ease of attaining a givenemissions level, the Agency’s proposedrule subdivided those two classes into five:plants designed to burn high-rank coal;plants designed to burn low-rank virgincoal; plants that run on a technologytermed integrated gasification combinedcycle; liquid oil units; and solid oil units.See 76 Fed.Reg. 25036–25037. EPA ex-plained that by subcategorizing in thatway, it had spared many plants the need to‘‘retrofit[ ],’’ ‘‘redesign[ ],’’ or make other‘‘extensive changes’’ to their facilities. Id.,at 25036. And in its final rule, EPA fur-ther refined its groupings in ways thateased compliance. Most notably, theAgency established a separate subcatego-ry, and attendant (less stringent) floor, forplants in Hawaii, Puerto Rico, Guam, andthe Virgin Islands on the ground thatplants in those places have ‘‘minimal con-trol over the quality of available fuel[ ] anddisproportionately high operational andmaintenance costs.’’ 77 Fed.Reg. 9401.4

Even after establishing multiple floorstandards that factored in costs, EPAadopted additional ‘‘compliance options’’ to‘‘minimize costs’’ associated with attaining

a given floor—just as its ‘‘appropriate andnecessary’’ finding explicitly contemplated.Id., at 9306; 76 Fed.Reg. 25057; see 65Fed.Reg. 79830. For example, the Agencycalculated each floor as both an ‘‘input-based’’ standard (based on emissions perunit of energy used ) and an ‘‘output-based’’ standard (based on emissions perunit of useful energy produced ), and al-lowed plants to choose which standardthey would meet. That option, EPA ex-plained, can ‘‘result in TTT reduced compli-ance costs.’’ 76 Fed.Reg. 25063. Similar-ly, EPA allowed plants to meet a given12% floor by averaging emissions acrossall units at the same site, instead of havingto meet the floor at each unit. Someplants, EPA understood, would find suchaveraging a ‘‘less costly alternative.’’ 77Fed.Reg. 9385. Yet again: EPA permit-ted ‘‘limited use’’ plants—those primarilyburning natural gas but sometimes switch-ing to oil—to comply with the final rule bymeeting qualitative ‘‘work practice stan-dards’’ rather than numeric emissions lim-its. Id., at 9400–9401. EPA explainedthat it would be ‘‘economically impractica-ble’’ for those plants to demonstrate com-pliance through emissions testing, and that

4. The majority insists on disregarding howEPA’s categorization decisions made floorstandards less costly for various power plantsto achieve, citing the Agency’s statement that‘‘it is not appropriate to premise subcategori-zation on costs.’’ 77 Fed.Reg. 9395 (quotedante, at 2711). But that misunderstandsEPA’s point. It is quite true that EPA did notconsider costs separate and apart from allother factors in crafting categories and subca-tegories. See S.Rep. No. 101–128, p. 166(1989) (noting that EPA may not make classi-fications decisions ‘‘based wholly on econom-ic grounds’’); 77 Fed.Reg. 9395 (citing SenateReport). That approach could have subvertedthe statutory scheme: To use an extreme ex-ample, it would have allowed EPA, citingcosts of compliance, to place the top fewplants in one category, the next few in anoth-er category, the third in a third, and all theway down the line, thereby insulating every

plant from having to make an appreciableeffort to catch up with cleaner facilities. Butin setting up categories and subcategories,EPA did consider technological, geographic,and other factors directly relevant to the coststhat diverse power plants would bear in try-ing to attain a given emissions level. (Forsome reason, the majority calls this a ‘‘care-fully worded observation,’’ ante, at 2711, butit is nothing other than the fact of the matter.)The Agency’s categorization decisions (amongseveral other measures, see supra, at 2718 –2719; infra this page and 2720) thus refutethe majority’s suggestion, see ante, at 2709,that the ‘‘appropriate and necessary’’ findingautomatically generates floor standards withno relation to cost. To the contrary, theAgency used its categorization authority toestablish different floor standards for differenttypes of plants with different cost structures.


an alternative standard, focused on theiradoption of pollution control techniques,would allow them to both reduce emissionsand avoid ‘‘extra cost.’’ Id., at 9401. Andthe list goes on. See, e.g., id., at 9409–9410 (allowing extra year for plants tocomply with emissions limits where‘‘source-specific construction, permitting,or labor, procurement or resource chal-lenges’’ arise); id., at 9417 (describing ad-ditional ‘‘compliance options’’).

With all that cost-consideration under itsbelt, EPA next assessed whether to setbeyond-the-floor standards, and here too,as it knew it would, the Agency took costsinto account. For the vast majority of coaland oil plants, EPA decided that beyond-the-floor standards would not be ‘‘reason-able after considering costs.’’ Id., at 9331.The Agency set such a standard for only asingle kind of plant, and only after deter-mining that the technology needed to meetthe more lenient limit would also achievethe more stringent one. See id., at 9393;76 Fed.Reg. 25046–25047. Otherwise,EPA determined, the market-leader-basedstandards were enough.

Finally, as required by Executive Orderand as anticipated at the time of the ‘‘ap-propriate and necessary’’ finding, EPAconducted a formal cost-benefit analysis ofits new emissions standards and incorpo-rated those findings into its proposed andfinal rules. See id., at 25072–25078; 77Fed.Reg. 9305–9306, 9424–9432. Thatanalysis estimated that the regulation’syearly costs would come in at under $10billion, while its annual measureable bene-fits would total many times more—be-tween $37 and $90 billion. See id., at9305–9306; ante, at 2705 – 2706. On thecosts side, EPA acknowledged that plants’compliance with the rule would likelycause electricity prices to rise by about3%, but projected that those prices wouldremain lower than they had been as re-

cently as 2010. See 77 Fed.Reg. 9413–9414. EPA also thought the rule’s impacton jobs would be about a wash, with jobslost at some high-emitting plants butgained both at cleaner plants and in thepollution control industry. See ibid. Onthe benefits side, EPA noted that it couldnot quantify many of the health gains thatwould result from reduced mercury expo-sure. See id., at 9306. But even puttingthose aside, the rule’s annual benefitswould include between 4,200 and 11,000fewer premature deaths from respiratoryand cardiovascular causes, 3,100 feweremergency room visits for asthmatic chil-dren, 4,700 fewer non-fatal heart attacks,and 540,000 fewer days of lost work. Seeid., at 9429.

Those concrete findings matter to thesecases—which, after all, turn on whetherEPA reasonably took costs into account inregulating plants’ emissions of hazardousair pollutants. The majority insists that itmay ignore EPA’s cost-benefit analysis be-cause ‘‘EPA did not rely on’’ it when issu-ing the initial ‘‘appropriate and necessary’’finding. Ante, at 2711 (quoting SolicitorGeneral); see also SEC v. Chenery Corp.,318 U.S. 80, 87, 93–94, 63 S.Ct. 454, 87L.Ed. 626 (1943). At one level, that de-scription is true—indeed, a simple functionof chronology: The kick-off finding preced-ed the cost-benefit analysis by years andso could not have taken its conclusions intoaccount. But more fundamentally, the ma-jority’s account is off, because EPA knewwhen it made that finding that it wouldconsider costs at every subsequent stage,culminating in a formal cost-benefit study.And EPA knew that, absent unusual cir-cumstances, the rule would need to passthat cost-benefit review in order to issue.See Exec. Order No. 12866, 58 Fed.Reg.51736 (‘‘Each agency shall TTT adopt aregulation only upon a reasoned determi-nation that the benefits of the intendedregulation justify its costs’’). The reason-ableness of the Agency’s decision to con-


sider only the harms of emissions at thethreshold stage must be evaluated in thatbroader context. And in thinking aboutthat issue, it is well to remember the out-come here: a rule whose benefits exceedits costs by three to nine times. In mak-ing its ‘‘appropriate and necessary’’ find-ing, EPA had committed to assessing andmitigating costs throughout the rest of itsrulemaking; if nothing else, the findings ofthe Agency’s cost-benefit analysis—mak-ing clear that the final emissions standardswere cost-effective—show that EPA didjust that.

B

Suppose you were in charge of designinga regulatory process. The subject mat-ter—an industry’s emissions of hazardousmaterial—was highly complex, involvingmultivarious factors demanding years ofstudy. Would you necessarily try to doeverything at once? Or might you try tobreak down this lengthy and complicatedprocess into discrete stages? And mightyou consider different factors, in differentways, at each of those junctures? I thinkyou might. You know that everythingmust get done in the end—every relevantfactor considered. But you tend to thinkthat ‘‘in the end’’ does not mean ‘‘in thebeginning.’’ And you structure your rule-making process accordingly, starting witha threshold determination that does notmirror your end-stage analysis. Wouldthat be at least (which is all it must be) a‘‘reasonable policy choice’’? Chevron, 467U.S., at 845, 104 S.Ct. 2778.

That is the question presented here, andit nearly answers itself. Setting emissionslevels for hazardous air pollutants is neces-sarily a lengthy and complicated process,demanding analysis of many considerationsover many years. Costs are a key factorin that process: As I have said, sensibleregulation requires careful scrutiny of the

burdens that potential rules impose. Seesupra, at 2716 – 2717. But in ordering itsregulatory process, EPA knew it wouldhave the opportunity to consider costs inone after another of that rulemaking’sstages—in setting the level of floor stan-dards, in providing a range of options forplants to meet them, in deciding whetheror where to require limits beyond thefloor, and in finally completing a formalcost-benefit analysis. See 65 Fed.Reg.79830–79831; supra, at 2718 – 2721. Giv-en that context, EPA reasonably decidedthat it was ‘‘appropriate’’—once again, theonly statutory requirement relevanthere—to trigger the regulatory processbased on the twin findings that the emis-sions in question cause profound healthand environmental harms and that avail-able pollution control technologies can re-duce those emissions. By making thatdecision, EPA did no more than commititself to developing a realistic and cost-effective regulation—a rule that wouldtake account of every relevant factor, costsand benefits alike. And indeed, particularfeatures of the statutory scheme here indi-cate that EPA’s policy choice was not justa minimally reasonable option but an emi-nently reasonable one.

To start, that decision brought EPA’sregulation of power plants into sync withits regulation of every other significantsource of hazardous pollutants under theClean Air Act. For all those types ofsources (totaling over 100), the Act in-structs EPA to make the threshold deci-sion to regulate based solely on the quanti-ty and effects of pollutants discharged;costs enter the picture afterward, whenthe Agency takes up the task of actuallyestablishing emissions limits. See supra,at 2715. Industry after industry, year af-ter year, EPA has followed that approachto standard-setting, just as Congress con-templated. See, e.g., 58 Fed.Reg. 49354(1993) (dry cleaning facilities); 59 Fed.


Reg. 64303 (1994) (gasoline distributors);60 Fed.Reg. 45948 (1995) (aerospace man-ufacturers). And apparently with consid-erable success. At any rate, neither thosechallenging this rule nor the Court remote-ly suggests that these regulatory regimeshave done ‘‘significa

Documents

MICHIGAN v. E.P.A. 2699columbiaclimatelaw.com › files › 2017 › 02 › Michigan-v.-EPA.pdfCite as 135 S.Ct. 2699 (2015) emissions of hazardous air pollutants from certain stationary