Michigan, et. al., v. EPA et. al., 135 S. Ct. 2699 (2015).

The Supreme Court found that the EPA exceeded its authority by failing to consider costs to regulated parties when making threshold determinations on whether to regulate hazardous air pollutants from power plants under 42 U.S.C. §7412(n)(1) of the Clean Air Act.  Writing for a 5-4 majority, Justice Antonin Scalia wrote that even under the Chevron deferential standard “EPA strayed far beyond those bounds when it read [42 U.S.C.] §7412(n)(1) to mean that it could ignore cost when deciding whether to regulate power plants.”

In her dissent, Justice Elena Kagan – joined by Justices Ginsburg, Breyer and Sotomayor – described the majority’s conclusion as a “peculiarly blinkered way for a court to assess the lawfulness of an agency’s rulemaking” since EPA did take costs into account “at multiple stages and through multiple means as it set emissions limits for power plants.”  Furthermore the EPA’s decision not to consider costs at the outset of the regulatory process was well within the agency's province, “given that it would do so in every round thereafter—and given that the emissions limits finally issued would depend crucially on those accountings. Indeed, EPA could not have measured costs at the process’s initial stage with any accuracy.”