Should the Energy Industry Care About Judge Kavanaugh’s Supreme Court Nomination? [Gaille Energy Blog Issue 71]

Should the Energy Industry Care About Judge Kavanaugh’s Supreme Court Nomination? [Gaille Energy Blog Issue 71]

  • Posted by scottgaille
  • On July 23, 2018
  • energy kavanaugh

The energy industry has increasingly found itself in the crossfires of American politics—with Democrats rallying around renewables and Republicans generally supporting fossil fuels.  The 2016 Democratic Party Platform even proposes ending consumption of fossil fuels entirely by 2050:

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This polarization of energy policy grew during President Obama’s administration.  In 2009, President Obama sought to pass climate change legislation—but his efforts were blocked by a coalition of Republicans and moderate Democrats.  The administration’s response was to bypass Congress with new regulations under existing statutes.  The centerpiece of President Obama’s energy policy was the Clean Power Plan:

“The Clean Power Plan was President Barack Obama’s signature policy on climate change, and it represented one of the strongest actions ever taken by the United States to combat global warming. . . .  Under the rule, which was finalized in 2015, the E.P.A. assigned each state a goal for limiting emissions from existing power plants and gave the states broad latitude in meeting those goals, such as switching from coal to natural gas or building new wind or solar farms. At the time, the agency estimated that the rule would have reduced greenhouse-gas emissions from the power sector 32 percent below 2005 levels by 2030.”  What Is the Clean Power Plan, and How Can Trump Repeal It? (New York Times Oct. 10, 2017).

Scott Segal of Bracewell explained that the Clean Power Plan was “an attempt to sidestep Congress . . . . The only reason the administration resorted to a regulatory process is they couldn’t create the political consensus necessary to pass it through Congress” (U.S. News & World Report Apr. 10, 2015).  In early 2016, the Supreme Court voted 5-4 to block the regulation.  Among those joining the majority was now-retiring Justice Kennedy.

President Trump has appointed Judge Kavanaugh—a former law clerk to Justice Kennedy—as his replacement.  Kavanaugh is currently a Judge on the United States Court of Appeals for the D.C. Circuit, which regularly presides over cases involving environmental and energy regulation.  Over the course of his tenure, Kavanaugh has written more than 300 opinions.  Let’s take a look at Kavanaugh’s judicial track record.

Environmental Regulation

In E.M.E. Homer City Generation v. EPA, 696 F.3d 7 (D.C. Cir. 2012), Kavanaugh wrote the majority opinion for the D.C. Circuit, which struck down EPA regulations of air pollution that crossed state lines.  The court stated:

“EPA has used the good neighbor provision to impose massive emissions reduction requirements on upwind States without regard to the limits imposed by the statutory text.”

Most U.S. Court of Appeals cases are heard by a panel of three judges, which means that the majority opinion necessarily reflects a blend of at least two judge’s views.  When I clerked for a U.S. Court of Appeals judge, the most interesting opinions often were dissents and concurrences.  These were more revealing of a particular judge’s philosophy because they were authored by one person, rather than two or three.  Kavanaugh has frequently dissented on matters of environmental regulation:

White Stallion Energy Center LLC v. EPA,748 F.3d 1222 (D.C. Cir. 2014) (concluding that it is “unreasonable for EPA to exclude considerations of costs in determining whether it is ‘appropriate’ to impose significant new regulations on electric utilities”).

Mingo Logan Coal Co. v. EPA, 829 F.3d 710 (D.C. Cir. 2016) (concluding that the EPA violated “common sense and settled law” when it revoked a Clean Water Act permit by considering only the benefits, and not the costs, of doing so).

Mexichem Specialty Resins, Inc. v. EPA, 787 F.3d 544 (D.C. Cir. 2015) (“EPA issued a rule that imposes limits on emissions of hazardous air pollutants by manufacturers of polyvinyl chloride. But EPA later concluded that one category of those limits—the so-called wastewater limits on hazardous air pollutants that may be dissolved in wastewater—was based on bad data. EPA is therefore reconsidering the wastewater limits. EPA says that it will complete the reconsideration process in 2016. … Even EPA itself does not oppose a stay in this case. EPA’s position is telling. Given the circumstances here, as well as our Portland Cement precedent, I would stay the wastewater limits pending judicial review.”).

Texas v. EPA, 726 F.3d 180 (D.C. Cir. 2013) (“In sum, EPA did not have authority to disapprove Texas’s and Wyoming’s SIPs or to issue FIPs to regulate emissions of greenhouse gases in those States until the expiration of the three-year period set forth in EPA’s regulation. Under that binding EPA regulation, States without automatically updating SIPs are entitled to three years to revise their SIPs to cover greenhouse gases. During that time, States have legal authority to issue valid permits under their existing SIPs. EPA’s orders should therefore be vacated.”).

Grocery Mfrs. Ass’n v. EPA, 704 F.3d 1005 (per curiam) (D.C. Cir. 2013) (dissenting from the denial of rehearing en banc; . . . “The panel’s decision . . . is outcome-determinative in a case with significant economic ramifications for the American food and petroleum industries, as well as for American consumers who will ultimately bear some of the costs.”).

Coal for Responsible Regulation, Inc. v. EPA, 2012 WL 6621785 (D.C. Cir. 2012) (dissenting from the denials of rehearing en banc; “Allowing agencies to exercise that kind of statutory re-writing authority could significantly enhance the Executive Branch’s power at the expense of Congress’s and thereby alter the relative balance of powers in the administrative process. I would not go down that road.”).

Howmet Corp. v. EPA, 614 F.3d 544 (D.C. Cir. 2010) (“Of course, there is good reason the 1985 regulations did not go as far as EPA now wants to. Doing so would violate the text of RCRA, the governing statute, which as relevant here confines EPA’s authority to regulation of ‘discarded material.’ We have held that Congress intended the term ‘discarded material’ to carry its ‘ordinary, plain-English meaning’—namely, to cover only material that is ‘disposed of, thrown away, or abandoned.’”).

Sierra Club v. EPA, 536 F.3d 673 (D.C. Cir. 2008) (“The plain meaning of the text controls; courts should not strain to find ambiguity in clarity; courts must ensure that agencies comply with the plain statutory text and not bypass Chevronstep 1 … because I conclude that the challenged EPA rule is entirely consistent with the statutory text and is otherwise reasonable, and because petitioners’ other challenges are not persuasive, I would deny the petition in whole.”).

Center for Biological Diversity v. EPA, 722 F.3d 401 (D.C. Cir. 2013) (“[T]he EPA simply lacks statutory authority to distinguish biogenic carbon dioxide from other forms of carbon dioxide for purposes of the PSD and Title V permitting programs.”).

Aaron Nielson, D.C. Circuit Review – Reviewed: Brooding Spirits, Judge Kavanaugh Edition (Notice & Comment Blog from the Yale Journal on Regulation July 9, 2018) (summarizing Kavanaugh’s dissenting opinions).

Energy Regulation

One of Kavanaugh’s first cases involved the Federal Energy Regulatory Commission’s decision to impose limits on the sharing of information between natural gas pipelines and their affiliated producers/processers.  In Natural Fuel Gas Supply Corporation v. FERC, Kavanaugh explained that “FERC here has provided no evidence of a real problem with respect to pipelines’ relationships with non-marketing affiliates. Indeed, [the 2004 order] does not include a single example of abuse by non-marketing affiliates.”  More recently, Kavanaugh reversed the FERC for exceeding its “passive and reactive role” under the Federal Power Act: “FERC violated Section 205. FERC’s modifications resulted in an ‘entirely different rate design’ than both PJM’s proposal and PJM’s prior rate scheme.”  NRG Power Marketing, LLC v. FERC, 862 F.3d 108, 117 (D.C. Cir. 2017).  Kavanaugh also has joined D.C. Circuit opinions denying FERC’s jurisdiction over LNG exports and rejecting efforts to block the flow of oil through the Dakota Access Oil Pipeline.

Narrow Interpretation of Regulatory Authority

Kavanaugh’s record demonstrates that he tends to narrowly interpret regulatory power—relying on the plain meaning of the statutory text.  Why is this important to the energy industry?  There are two pathways to enacting the phase-out of fossil fuels: (i) additional regulations under existing statutes; or (ii) passing a new climate change law. Kavanaugh likely would vote to block the regulatory avenue. As Kavanaugh said in the oral arguments on the Clear Power Plan, “War is not a blank check.  Global warming is not a blank check, either, for the President.” In other words, the President must convince Congress to pass a climate change law.  Even when Democrats controlled both the House and Senate, President Obama could not achieve this Herculean undertaking.

Does Kavanaugh Have a Bork Problem?

Kavanaugh’s writings on energy, environment, and regulatory issues also may be strengthening his Democratic opposition. Judge Bork, like Kavanaugh, was a respected judge on the D.C. Circuit.  In 1987, Bork was nominated to the Supreme Court by President Reagan but rejected by the Senate in a 58-42 vote, largely along party lines. I spoke with Bork at a Houston dinner in 1990. He predicted that Supreme Court nominations would henceforth be “blank slates”—judges of uncertain beliefs who avoided issues that could influence their appointment prospects.

In law school, I tested Bork’s hypothesis by undertaking a multiple regression analysis of law review articles published by U.S. Court of Appeals judges before and after the hearings. Publishing by United States Court of Appeals Judges: Before and After the Bork Hearings, 26 Journal of Legal Studies 371 (1997).  Judge Richard Posner summarized my article in his book, How Judges Think:

“After Robert Bork’s nomination to the Supreme Court failed, in part because of his extrajudicial writings (the largest component of the ‘paper trail’ that did him in), the publication rate of court of appeals judges declined precipitously.”

Judge Bork was right after all.  Many judges stopped writing, and it became harder for either the nominating President or the Senate to discern their beliefs.

Kavanaugh has written quite a lot. In addition to his 300 judicial opinions, Kavanaugh has an extrajudicial publication trail of at least seventeen articles:

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In his 2014 article, The Courts and the Administrative State, Kavanaugh wrote: “‘(1) Read the statute; (2) read the statute; (3) read the statute!’ So the most important factor in resolving these administrative cases often turns out to be the precise wording of the statutory text.”  In talking about war powers, and echoing his oral argument in the Clean Power Plan case, Kavanaugh states: “If there are to be new rules to govern the executive in this kind of war, they need to be created in the usual way by the Congress of the United States.”  At the time he wrote these articles, Kavanaugh probably thought they were about boring administrative law—not the hot-button social issues that doomed Judge Bork’s nomination.  But climate change has made administrative law a more divisive issue.  Kavanaugh’s writings challenge the core of the Democratic Party’s energy and environmental platform, which relies upon administrative fiat. The real battle over Judge Kavanaugh’s nomination may be more about whether a President can change climate policy without Congress first passing a new law.  That’s something the energy industry should pay attention to.

About the Gaille Energy Blog.  The Gaille Energy Blog (view counter = 71,319) discusses issues in the field of energy law, with periodic posts at Scott Gaille is a Lecturer in Law at the University of Chicago Law School, an Adjunct Professor in Management at Rice University’s Graduate School of Business, and the author of three books on energy law (Construction Energy Development, Shale Energy Development,and International Energy Development).

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