Judge Grants Preliminary Injunction Against Federal Social Cost Of GHG Order

by Paul Ciampoli
APPA News Director
February 15, 2022

A Louisiana-based federal judge agreed with a collection of states that they will be harmed as a result of an early 2021 Biden Administration move to set interim estimates for the social cost of greenhouse gas emissions for federal agencies to use. The judge granted a motion for a preliminary injunction filed by the 10 states.

In April 2021, 10 states filed a complaint against the federal government seeking declaratory and injunctive relief as a result of Executive Order 13990 (EO 13990).

EO 13990 reinstated the Interagency Working Group on Social Costs of Greenhouse Gas Emissions (SC-GGE). In addition, the Interagency Working Group was directed to publish interim estimates for the social cost of carbon, nitrous oxide, and methane — collectively referred to as SC-GHG estimates — for agencies to use when monetizing the value of changes in greenhouse gas emissions resulting from regulations and other relevant agency actions.

The states that filed the complaint are Louisiana, Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming.

The states sought injunctive and declaratory relief on three grounds:

• First, they asserted that the SC-GHG estimates violate the procedural requirements of the Administrative Procedure Act (APA) as a substantive rule that did not undergo the requisite notice-and-comment process.
• Second, the states claimed that President Biden, through EO 13990, and the Interagency Working Group lack the authority to enforce the estimates as they are substantively unlawful under the APA and contravene existing law.
• Third, the states maintain that the government defendants acted beyond any congressional authority by basing regulatory policy upon global considerations.   

The court added a fourth prohibition to prevent the government from relying upon or implementing Section 5 of EO 13990 in any manner.

Section 5 required the government to form the Interagency Working Group, set preliminary SC-GHG values by February 20, 2021, and develop final values by January 1, 2022. The order also directed the government to “return to the guidance of Circular A-4 in conducting regulatory analysis.” 

Circular A-4 provides the Office of Management and Budget’s guidance to federal agencies on the development of regulatory analysis.

Court “Not Opining” On Scientific Issues

“To be clear, the court is ruling only on the actions of the federal agencies and whether the agencies, by implementing the estimates and considering global effects — violate the APA and whether President Biden upon signing EO 13990, violated the separations of powers clause of the United States Constitution,” wrote Judge James Cain of the U.S. District Court Western District of Louisiana-Lake Charles Division.

The court “has the authority to enjoin federal agencies from implementing a rule — mandated by an executive order or not — that violates the APA or violates the separation of powers clause,” Cain said.

“Importantly, the court is not opining as to the scientific issues regarding greenhouse gas emissions, their effects on the environment, or whether they contribute to global warming.

Executive Order Contradicts Intent Of Congress

Cain determined that EO 13990 contradicts Congress’ intent regarding legislative rulemaking by mandating consideration of the global effects.  “The court further finds that the President lacks power to promulgate fundamentally transformative legislative rules in areas of vast political, social, and economic importance, thus, the issuance of EO 13990 violates the major questions doctrine.”

That doctrine consists of two steps for the court to determine: (1) if the assertion of executive authority implicates matters of vast economic and political significance, and (2) if Congress has expressly and specifically delegated authority over the issue to the Executive.

In addition, the court found that EO 13990 was promulgated without complying with the APA’s notice and comment requirements.

The states argued that they easily meet the threshold requirement that if an injunction is not issued, they will suffer inevitable and irreparable harm.

The states noted that they are substantial producers of energy and rely upon tax revenues from energy production to perform their sovereign duties. As such, the increased SC-GHG estimates will cause regulatory standards affecting air quality, energy efficiency, power plant regulation to increase in stringency, which will directly harm the economies and revenues of the states.

Moreover, they said that Texas, Louisiana, Kentucky, Florida, Georgia, South Dakota, Mississippi, Alabama, West Virginia, and Wyoming and their citizens will all be imminently harmed by EO 13990 and the SC-GHG estimates by causing increased energy costs.

The states have sufficiently identified the kinds of harms to support injunctive relief, Cain said in his order.

Moreover, the court determined that the states have made a clear showing of an injury-in-fact, and that such injury cannot be undone through monetary remedies, “such that they need immediate relief now, lest they be unable to ever obtain meaningful judicial relief in the future.”

The court “agrees that the public interest and balance of equities weigh heavily in favor of granting a preliminary injunction,” wrote Cain on Feb. 11 in granting the motion for preliminary injunction in its entirety.

The American Public Power Association anticipates the United States will quickly seek appeal from the U.S. Court of Appeals for the Fifth Circuit, given the far-reaching impacts of the order on the Biden Administration’s SC-GHG initiatives.