Agency and Power: The EPA and Obama’s Federalism

By Sanjay Dureseti

Sanjay Dureseti is a freshman at the University of Pennsylvania and an associate editor of the Penn Undergraduate Law Journal.
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Martin Winterkorn, the now-former CEO of German automobile giant Volkswagen AG, recently admitted to his company’s use of secret software to fool diesel emissions tests. When the United States’ Environmental Protection Agency (EPA) caught wind of VW’s duplicity, they launched an investigation that revealed further disturbing truths. Estimates state that 11 million road-bound cars, ranging from cheaper models to luxury vehicles, are programmed with Volkswagen’s “defeat device.” [1]                     

Such emissions standards have been the cornerstone of the EPA’s regulatory approach since its inception. Concerns for the effects of vehicular pollution first arose in 1960s and 1970s, when the postwar boom led to an explosion in automobile manufacturing, causing rampant atmospheric contamination. [2] President Richard Nixon, in an attempt to harness the electoral potency of the environmental issue, decided to form an umbrella organization designed to engage in all realms of environmental protection. [3]

However, Nixon could not have foreseen the controversy in the future of his invention. The EPA’s creation set off a larger debate, immediately polarizing lawmakers. The dispute over the agency’s role and its very existence has now transformed into a microcosm of one of the country’s greatest and oldest issues: the power and reach of the federal government. [4]

Recent legal events further paint the picture of the EPA as a symbol of Federal overreach. In 2014, President Obama, through an executive action, implemented one of the most ambitious and stringent environmental protection plans in American history. Citing an obscure portion of the 1970 Clean Air Act, Obama aimed to tackle carbon pollution in over 600 coal-fired power plants. This tremendous increase in the oversight of the EPA immediately brought on the wrath of the coal industry and its Congressional allies, and the Obama Administration quickly became tangled up in lawsuits that reflected the ages-old rhetoric of a government overstepping its bounds.

The coal industry was not without its allies in academia, who stated that the law violated the Constitution’s Due Process Clause, as well as the 10th Amendment. Harvard Law professor Laurence Tribe delivered a harsh rebuke of the EPA’s plans. He claimed that the regulations were unconstitutional, as the new rules would punish private enterprise years after it had already committed to federal investments. These retroactive sanctions, opined Tribe, were violations of the Due Process clause of the Fifth Amendment. [6] Tribe also cited the EPA’s carbon cuts as infringements on the “Takings Clause,” which prohibits private entities from bearing the brunt of a public burden. [7] In addition, he claimed that the Federal government forced the States to adopt this national policy of regulation, violating the Constitutional separation of Federal and State government.

Two of Tribe’s Harvard colleagues were quick to refute Tribe’s arguments of the unconstitutionality of Obama’s legislation. Professors Richard Lazarus and Jody Freeman argued that Obama’s Clean Power Plan simply did not grant the EPA coercive power over the States. [8] That is, the Agency could not punish states for failing to submit regulatory plans, which was the Federal overstep vehemently opposed by Tribe and his allies. Lazarus and Freeman went on to state that Tribe’s portrayal of the Agency’s complete subversion of States’ rights was “just not true.” [9] States were granted the ability to tailor regulatory plans to their needs.
The Supreme Court, however, agreed with Tribe. In the case of Michigan, et al., Petitioners v. EPA, the Court ruled with the plaintiff, which was a collection of corporations, non-for-profits, and 23 states. Justice Antonin Scalia wrote that the Agency misinterpreted the Clean Air Act and failed to consider the overly harsh economic impact of its regulations. [10] Opponents of the EPA rejoiced, declaring victory over “bureaucratic overreach” and proclaiming their attempts to “institute some common sense in rule making” as brilliantly successful.

Volkswagen’s deceit brings the role of the EPA back to the foreground of political and legal debate. The Agency is forced to consider levying massive penalties on the automaker, as initial estimates suggest that VW could be charged with up to $18 billion dollars in fines. [11] Such a blow would be catastrophic for Volkswagen and, quite possibly, the world as a whole. Already, markets are exhibiting volatility and there are worries that the crisis is dragging Germany, the heart of the Eurozone, towards the brink. [12]

The EPA is faced with a crucial regulatory decision. Showing leniency would allow a company guilty of systemic corruption and fraud to go unpunished. Excessive punishment, however, would not only result in potentially catastrophic economic consequences, but also contribute to an already-dire state of political polarization.

For now, the Agency’s leanings are unclear. One thing, however, is certain; the world, and its political, legal, and economic institutions, are watching.


[1] Glinton, Sonari. “Volkswagen Says 11 Million Cars Worldwide Have Emissions Cheating Software” National Public Radio. September 22, 2015. http://www.npr.org/2015/09/22/442582415/volkswagen-says-11-million-cars-worldwide-have-emissions-cheating-software. Accessed September 24, 2015.
[2] “Origins of the EPA”. The Guardian. Spring 1992. Found in EPA Historical Publication Vol. 1. http://www2.epa.gov/aboutepa/guardian-origins-epa. Accessed September 24, 2015.
[3] Lewis, Jack. “Looking Backward: A Historical Perspective on Environmental Regulations” EPA Journal. Spring 1988. http://www2.epa.gov/aboutepa/looking-backward-historical-perspective-environmental-regulations. Accessed September 24, 2015
[4] Lewis, Jack. “Looking Backward: A Historical Perspective on Environmental Regulations.” EPA Journal. Spring 1988. http://www2.epa.gov/aboutepa/looking-backward-historical-perspective-environmental-regulations. Accessed September 24, 2015
[5] Davenport, Coral. “Obama to Take Action to Slash Coal Pollution.” The New York Times. June 1, 2014. http://www.nytimes.com/2014/06/02/us/politics/epa-to-seek-30-percent-cut-in-carbon-emissions.html. Accessed September 25, 2015.
[6] Tribe, Laurence. “Comments of Laurence H. Tribe and Peabody Energy Corporation.” United States Environmental Protection Agency. December 1, 2014. http://www.masseygail.com/pdf/Tribe-Peabody_111%28d%29_Comments_%28filed%29.pdf. Accessed September 25, 2015.
[7] Tribe, Laurence. “Comments of Laurence H. Tribe and Peabody Energy Corporation.” United States Environmental Protection Agency. December 1, 2014. http://www.masseygail.com/pdf/Tribe-Peabody_111%28d%29_Comments_%28filed%29.pdf. Accessed September 25, 2015.
[8] Freeman, Jody and Lazarus, Marl. “Freeman and Lazarus: A rebuttal to Tribe’s reply” Harvard Law Today. March 21, 2015. http://today.law.harvard.edu/a_rebuttal_to_tribe_reply/. Accessed September 25, 2015
[9] Freeman, Jody and Lazarus, Marl. “Freeman and Lazarus: A rebuttal to Tribe’s reply” Harvard Law Today. March 21, 2015. http://today.law.harvard.edu/a_rebuttal_to_tribe_reply/. Accessed September 25, 2015.
[10] Scalia, Antonin. “14-46 Michigan v. EPA.” United States Supreme Court. June 29, 2015. http://www.supremecourt.gov/opinions/14pdf/14-46_bqmc.pdf. Accessed September 25, 2015.
[11] Holding, Reynolds. “Volkswagen Faces Harsher Penalties Than a U.S. Company Might.” DealBook-The New York Times. September 28, 2015. http://www.nytimes.com/2015/09/29/business/dealbook/volkswagen-faces-harsher-penalties-than-a-us-company-might.html. Accessed September 29, 2015.
[12] Nienaber, Michael. “Volkswagen could pose bigger threat to German economy than Greek crisis.” Reuters. September 23, 2015. http://www.reuters.com/article/2015/09/23/us-usa-volkswagen-germany-economy-idUSKCN0RN27S20150923. Accessed September 29, 2015.
 
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