On February 9, 2016, the US Supreme Court issued a ruling granting an application to stay the implementation of the Environmental Protection Agency's (EPA) Clean Power Plan until litigation over the legality of the rule has concluded. It is unprecedented for the Supreme Court to issue a stay of an EPA rule before the merits of the legal challenge have been heard by the Appellate Court.

The Clean Power Plan, published as a final rule in the Federal Register in October 2015, is the first federal regulation to set carbon emissions limits for existing power plants and is a significant component of President Obama's Climate Change Action Plan. The Plan would cut carbon pollution from existing power plants by 32% by 2030 (see Legal Update, EPA Finalizes Clean Power Plan to Regulate CO2 Emissions from Existing Power Plants).

More than 15 separate lawsuits were filed following the October 2015 publication of the final rule. These lawsuits were consolidated in the DC Circuit Court of Appeals. West Virginia and a coalition of 24 states who had challenged the rule filed a motion to stay the implementation of the rule until after the litigation had concluded (State of West Virginia, et al. v. EPA, 15-1363 (D.C. Cir. Oct 23, 2015)).

On January 21, 2016, the DC Circuit denied the petitioner's motion to stay the rule, and set an expedited schedule for oral arguments to begin on June 2, 2016. Citing the potential harm caused by the implementation of the rule during the pending court challenges West Virginia, Texas, Oklahoma and 26 other states and state agencies filed a stay application with US Chief Justice John Roberts on January 26, 2016 (see Legal Update, DC Circuit Denies Request to Stay EPA Clean Power Plan).

The Supreme Court's February 9, 2016 order granting the stay application was issued following a 5-4 vote by the Justices. The order noted that implementation of the Clean Power Plan will be stayed pending the outcome of the current DC Circuit litigation and any subsequent review by the Supreme Court.

With the Clean Power Plan stayed the schedule, including the September 2016 deadline for states to submit an implementation plan or request an extension, is on hold. It is not clear at this time what the impact will be to the implementation schedule if the challenges to the Clean Power Plan are unsuccessful and the stay is lifted.

For more information on the Clean Power Plan, see Practice Note, Power Dynamics: Forces Shaping the Future of Coal in the United States.