Michigan v. EPA

Supreme Court of the United States · 2015 · Administrative Law

576 U.S. 743 (2015)

Updated August 1, 2026

Administrative Lawcost considerationChevronreasoned decisionmakingrelevant factorsappropriate and necessaryClean Air ActEPA

Facts

The Clean Air Act directs EPA to regulate hazardous air pollutant emissions from power plants only if EPA finds such regulation "appropriate and necessary." In reaffirming that finding, EPA concluded regulation was appropriate because power plants' emissions posed risks to human health and the environment and because controls were available, and necessary because other Clean Air Act requirements did not eliminate those risks. EPA expressly concluded that costs should not be considered at that threshold stage. EPA separately estimated that the regulation would cost power plants $9.6 billion per year, while the quantifiable benefits from reduced hazardous-air-pollutant emissions were only $4 to $6 million per year, and it conceded that this regulatory impact analysis played no role in the appropriate-and-necessary finding.

Issue

Whether EPA reasonably interpreted Clean Air Act §7412(n)(1)(A) to allow it to deem cost irrelevant when deciding whether regulation of power plants is "appropriate and necessary."

Rule

Agency action is lawful only if it rests on consideration of the relevant factors. Under Clean Air Act §7412(n)(1)(A), EPA must consider cost, including cost of compliance, before deciding whether regulation of power plants is "appropriate and necessary"; however, the Court did not require a formal cost-benefit analysis assigning monetary values to every advantage and disadvantage.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Congress authorizes the Coastal Emissions Board to regulate offshore processing vessels if, after a safety study, it finds regulation "appropriate and necessary." The Board finds serious toxic-discharge risks and available controls, but states that compliance costs are categorically irrelevant at the threshold stage, even though the rule will cost operators about $3 billion annually.

If vessel operators challenge the threshold finding, which is the strongest argument against the Board's interpretation?

Explanation. The majority held that an agency acts unreasonably when it treats cost as irrelevant under a statute directing regulation only if it is "appropriate and necessary." Agency action must rest on consideration of relevant factors, and cost is one such factor here. The Court did not require a formal quantified cost-benefit analysis, only some consideration of cost.