Federal Court Issues Injunction on Greenhouse Gas Social Cost EO

Late last week, the District of Louisiana granted the plaintiffs’ motion for preliminary injunction against the enforcement of Executive Order 13990, signed by President Biden on January 20, 2021.  The Executive Order relates to the computations “… for [Executive Branch] agencies to use when monetizing the value of changes in greenhouse gas emissions resulting from regulations and other agency actions.” 

Plaintiffs are eight states characterizing themselves as “substantial producers of energy” and alleging harm to their interests and those of their residents should the Executive Order be enforced.  Defendants are President Biden and numerous government officials and agencies, including the Interagency Working Group on Social Cost of Greenhouse Gases (IWG), which the court notes had been established during the Obama administration, disbanded by the Trump administration and reinstated by the Executive Order.

The Executive Order “…directs federal agencies to ‘capture the full costs of greenhouse emissions as accurately as possible,’ including by taking global damages into account…”  and “…further provides that the Working Group shall publish an interim SCC, SCN, and SCM within 30 days of the date of this order, which agencies shall use when monetizing the value of greenhouse gas emissions resulting from regulations and other relevant agency actions until final values are published…” The SCC, SCN, and SCM are the “Social Cost” of carbon, nitrous oxide and methane respectively. “On February 26, 2021, the IWG announced the SC-GHG Estimates [ Social Costs of the three greenhouse gases] as directed by the [Executive Order].” The court notes that the estimates are identical to those promulgated during the Obama administration, adjusted for inflation. 

Plaintiffs filed suit on April 22, 2021, seeking injunctive and declaratory relief.  As summarized by the court, the plaintiffs based their entitlement to relief on three grounds:  procedural violations of the Administrative Procedures Act (APA); lack of authority by President Biden and the IWG to enforce the estimates as being “substantively unlawful” under the APA and in contravention of “existing law”; and action beyond of scope of Congressional authority “by basing regulatory policy on global considerations.”

After addressing threshold questions of Plaintiffs’ standing and whether judicial review of the agency action under the APA is subject to judicial review, the court proceeds to consider the propriety of issuing a preliminary injunction.  “The Court finds that [the Executive Order] contradicts Congress’ intent regarding legislative rulemaking by mandating consideration of the global effects.  The Court further finds that the President lacks power to promulgate fundamentally transformative legislative rules in areas of vast political, social and economic importance, thus the issuance of [the Executive Order] violates the major questions doctrine.”  Elsewhere in the opinion, the court explains that the major questions doctrine prohibits an executive branch agency from promulgating such transformative rules unless Congress “speaks clearly.” 

The court goes on to note that SC-GHC estimates were promulgated without compliance with the APA’s notice and comment requirements.   Although reviewing numerous other arguments the Plaintiffs make under the APA, the court does not explicitly adopt them.