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Recent developments in the challenge to an executive order from the Biden Administration in Louisiana v. Biden suggest that the “major questions” doctrine may begin to play a large role in the future of environmental law and regulations. While the existence of this doctrine is nothing new, its relevance in the realm of environmental law and the weighing of factors such as those in a “social cost of carbon” calculus is on the rise.

The major questions doctrine works to ensure that agencies do not impose new obligations of vast economic and political significance upon parties and States absent some express delegation of such authority by Congress. In practice, for an executive or independent agency to exercise regulatory authority over a major policy question of great economic and political importance, congress must either: (1) expressly and specifically decide the major policy question itself and delegate to the agency the authority to regulate and enforce; or (2) expressly and specifically delegate to the agency the authority both to decide the major policy question and to regulate and enforce. While the major questions doctrine has been cited in a wide variety of cases addressing both criminal and civil topics, its recent use in the high-profile environmental law case of Louisiana v. Biden brings it to the forefront of discussion regarding how executive actions and similar sweeping environmental regulations are likely to be judged in the future.

The major questions doctrine was used recently to enjoin the Biden Administration’s efforts to consider the social cost of carbon as part of other regulatory proceedings. The executive order at issue, Executive Order 13990, relies on a “social cost of carbon” calculation which estimates in dollars the economic damages that would result from emitting one additional ton of carbon dioxide into the atmosphere. Essentially, it puts the effects of climate change into economic terms to assist policymakers and decisionmakers in weighing the economic and environmental impacts of decisions.

The plaintiff states in Louisiana v. Biden sought a preliminary injunction to halt the executive order employing this social cost of carbon analysis, claiming such estimates will lead to increased regulatory burdens associated with agencies conducting such cost-benefit analyses. On February 11th, 2022, the major questions doctrine was used by the Western District to halt introduction of this calculation by preliminary injunction on the grounds that the social cost of carbon estimates did not undergo the appropriate notice-and-comment procedures required under the major questions doctrine. In the eyes of the Western District, the weighing of environmental and economic factors in the social cost of carbon calculus is a “major question” since the total costs of regulatory actions related to the Executive Order “is estimated to be between $447 billion and $561 billion . . . [and] less costly and far-reaching regulations have triggered the major questions doctrine.” Because of this, the district court found that such a “social cost of carbon” calculation needs express authorization from Congress and requires notice-and-comment proceedings under the Administrative Procedure Act before it can become law.

At the time of writing this blog, however, the Fifth Circuit Court of Appeals granted the defendants’ motion to stay the preliminary injunction pending an appeal on the grounds that the defendants made a strong showing that they are likely to succeed on the merits. However, the major questions doctrine was not specifically addressed in the Fifth Circuit’s opinion. Instead, the Fifth Circuit reasoned that a stay was warranted because the defendants are likely to succeed in arguing that the plaintiff states lack standing.

Despite a stay from the Fifth Circuit halting the preliminary injunction issued by the District Court, the Western District of Louisiana may have changed how future environmental laws and regulations are created and how far they can reach. Regardless of the ultimate outcome of Louisiana v. Biden, the Western District court’s reliance on the major questions doctrine to halt an attempt by the Executive Branch to enact sweeping environmental regulations without Congressional approval may change the approach taken by the Biden Administration and other federal authorities when considering major environmental regulations in the future. This may be particularly relevant in the coming years as environmentally focused regulations become more common and find more support from the public and industry actors. Ultimately, any company subject to environmental regulation from the federal government should take into consideration the protection of the major questions doctrine when facing future legislation.

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