Utility Air Regulatory Group v. EPA

Supreme Court of the United States · 2014 · Administrative Law

134 S. Ct. 2427 (2014)

Updated August 1, 2026

Administrative Lawstatutory limits on agency powerClean Air ActEPAChevronPSDTitle VBACT

Facts

After Massachusetts v. EPA, EPA issued greenhouse-gas standards for new motor vehicles and then concluded that those regulations triggered stationary-source permitting requirements under the Clean Air Act's PSD and Title V programs. EPA recognized that applying the statutory 100- and 250-ton thresholds to greenhouse gases would sweep in vast numbers of small sources and make the programs unadministrable, so it adopted a Tailoring Rule that raised the thresholds for greenhouse gases to much higher levels. EPA also required sources already subject to PSD permitting because of conventional pollutants to apply BACT to greenhouse gases. Petitioners challenged EPA's interpretation that greenhouse gases could trigger PSD and Title V permits and its related tailoring approach.

Issue

Whether EPA permissibly interpreted the Clean Air Act to require PSD and Title V permits for stationary sources based solely on their greenhouse-gas emissions. Whether EPA could rewrite the Act's numerical permitting thresholds to accommodate that interpretation. Whether EPA could require sources otherwise subject to PSD review to apply BACT to greenhouse gases.

Rule

An agency may resolve statutory ambiguity only within the bounds of reasonable interpretation under Chevron. It may not claim an enormous and transformative expansion of regulatory authority without clear congressional authorization, and it may not rewrite clear statutory terms, including unambiguous numerical thresholds, to fit policy needs. EPA may not treat greenhouse gases as triggering PSD or Title V permits solely by virtue of a source's greenhouse-gas emissions, but it may require BACT for greenhouse gases from sources otherwise properly subject to PSD review, so long as BACT is sensibly applied and limited at least by a de minimis threshold.

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

The Federal Industrial Safety Bureau administers an old emissions statute requiring operating permits for any facility that emits more than 200 tons per year of "any airborne substance." After regulating methane from delivery trucks, the Bureau declares that every warehouse emitting methane above 200 tons must now obtain stationary-source permits. The Bureau estimates this would newly cover millions of small buildings across Ohio and Michigan and describes the change as the largest expansion of its authority in the statute's history.

If challenged, which is the strongest argument against the Bureau's interpretation?

Explanation. The majority held that even under Chevron, an agency must stay within the bounds of reasonable interpretation. An interpretation that would radically expand a permitting program to millions of small sources, contrary to the program's structure and design, and claim vast new power absent clear congressional authorization is unreasonable.