(Adds Scalia quote and broader context of the decision)
By Lawrence Hurley
WASHINGTON, June 23 The U.S. Supreme Court on Monday largely upheld the Obama administration's authority to curb greenhouse gases from major emitters like power plants and refineries in a ruling that nonetheless exempted some smaller sources from the regulation.
On a 7-2 vote, the court rejected an industry-backed argument that most emitting facilities should not be regulated for greenhouse gases under one particular air pollution program of the U.S. Environmental Protection Agency (EPA).
But industry could claim a partial win because the court ruled on a 5-4 vote that some facilities the government had wanted to regulate will be exempted. Some landfills, pulp and paper facilities, electronics manufacturing plants, chemical production plants and beverage producers are among the small industrial sources likely to be exempted, an EPA spokesman said.
"It bears mention that EPA is getting almost everything it wanted in this case," Justice Antonin Scalia, who wrote the majority opinion, read from a statement in court.
The ruling brought an end to what started out as a broad legal challenge to the Obama administration's first suite of greenhouse gas regulations issued in 2009 and 2010. The administration won on every count except in the mixed ruling announced on Monday.
The case focused only on the "prevention of serious deterioration" or PSD program, which requires any new or modified major polluting facility to obtain a permit before any new construction is done if it emits "any air pollutant."
BOTH SIDES CLAIM VICTORY
The EPA said in a statement: "The Supreme Court's decision is a win for our efforts to reduce carbon pollution because it allows EPA, states and other permitting authorities to continue to require carbon pollution limits in permits for the largest pollution sources."
Industry groups also claimed victory. The American Petroleum Institute said in a statement that the decision was a "stark reminder that the EPA's power is not unlimited."
The justices were split in multiple ways. The four liberals voted with Scalia on one point but would have ruled for EPA on all counts. Conservative justices Samuel Alito and Clarence Thomas would have ruled against the government across the board.
Scalia was critical of the administration, saying its interpretation of the law "would bring about an enormous and transformative expansion of EPA's regulatory authority without clear congressional authorization."
The parties agreed that as a result of the ruling roughly 83 percent of greenhouse gas emissions that could potentially be regulated under the EPA's interpretation of the law would still be covered, compared with the 86 percent of emissions that the EPA had hoped to regulate.
Under the program, operators have to show they use the best technology available to reduce emissions of covered pollutants. More than 300 facilities have applied for permits.
The small-bore nature of the case was in stark contrast to the broader legal challenges initially made by industry groups and states. When the administration's first four climate change rules were issued, armies of lawyers were lined up to fight them. Some even questioned the landmark Massachusetts v EPA ruling from 2007, in which the Supreme Court said greenhouse gases were pollutants that could be regulated under the federal Clean Air Act.
But the U.S. Court of Appeals for the District of Columbia Circuit upheld the rules in a unanimous June 2012 decision.
The challengers sought Supreme Court review and, in October 2013, the justices agreed to hear the narrow case that was decided on Monday. The court opted against hearing any of the broader legal challenges, leaving intact the EPA's finding that greenhouse gases should be regulated under the Clean Air Act and the agency's first regulations for cars and light trucks.
Ultimately, the all-out legal assault largely fizzled. It constituted "sound and fury, signifying much less than it should have," said Eric Groten, a lawyer with the Vinson & Elkins law firm, who represented one of the challengers.
The Supreme Court decision is not expected to affect the administration's ability to set air pollution standards for greenhouse gases under a separate provision of the Clean Air Act. On June 2, the White House announced proposed rules calling for 30 percent reduction in greenhouse gas emissions from existing power plants, including coal-fired facilities.
The case is Utility Air Regulatory Group v Environmental Protection Agency et al, U.S. Supreme Court No. 12-1146 (Reporting by Lawrence Hurley; Editing by Howard Goller and Grant McCool)