On 2/27/01, the Supreme Court rejected two main arguments in a challenge by the NAM and other industry groups of the Environmental Protection Agency’s power to set national air-quality standards under the federal Clean Air Act.
EPA concedes that these basic air-quality standards drive regulatory and compliance expenditures that run into the hundreds of billions of dollars per year. Nevertheless, the legal test applied by EPA, and approved by the Court, permits EPA to ignore the tools that have proven most effective in shaping and implementing effective regulatory programs.
These tools include, among others, consideration of indirect as well as direct effects; identification of significant risks of public heath; assessment of the costs and benefits of alternative margins of safety in preventing health risks; and a keen awareness of the practical and real-world effects of regulatory choices. These very tools are now at work shaping the regulatory policies of other federal agencies, including the Occupational Safety and Health Administration, and there is no reason that they could not be effectively applied to EPA as well.
The Supreme Court ruled that costs may not be taken into consideration when EPA sets clean air quality standards. It also ruled that the Clean Air Act is not an unconstitutional delegation of legislative power from Congress, since it includes language that "fits comfortably within the scope of discretion" previously permitted under prior Supreme Court precedents.
The Court did, however, remand the case for the lower court and the EPA to determine other issues and to reconsider how to reconcile conflicting interpretations of the implementation schedule for compliance. The NAM will actively pursue its remaining complaints about the ozone and particulate matter regulations.