Utility Air Regulatory Group et al. v. EPA (Climate Change)


United States Supreme Court

NAHB Involvement


In 2009-2010, EPA issued four separate regulations in order to regulate greenhouse gas (GHG) emissions from motor vehicles. Even though the Auto Rule ostensibly sets standards for motor vehicles only, EPA has interpreted this regulation to trigger requirements for stationary sources as well. Traditionally, "stationary sources" are limited to large industrial factories and utilities. But, because the Clean Air Act contains a numeric triggering threshold for a pre-construction permit known as the "Prevention of Significant Deterioration" program permit, and because the principal GHG emission, carbon dioxide, is emitted by structures in an amount triggering this threshold, stationary sources in this context would include multifamily structures and even some single-family homes. This result would have brought most multifamily and mixed-use, some single-family-home, and potentially even master-planned community development to a standstill.

NAHB joined an industry coalition to challenge all four regulations on the grounds that EPA misinterpreted its obligations under the Clean Air Act.

On June 26, 2012, the D.C. Circuit Court issued one opinion deciding all four petitions in EPA's favor. NAHB's coalition ultimately appealed this decision to the U.S. Supreme Court.

On April 18, 2013, NAHB as a member of the industry coalition filed a cert petition with the U.S. Supreme Court. On Oct. 15, 2013, the Supreme Court agreed to hear this case on the following issue: "Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases." This marks NAHB's second trip to the Supreme Court as a petitioner.

The coalition's opening brief was filed Dec. 9, and oral argument took place Feb. 24, 2014. Counsel representing NAHB argued on behalf of all industry petitioners.

In a victory against regulatory overreach, the U.S. Supreme Court on June 23, 2014, ruled in favor of NAHB and its coalition partners. The High Court held that the Environmental Protection Agency (EPA) does not have the authority to require multifamily and commercial builders to obtain costly pre-construction permits for greenhouse gas emissions from the buildings they construct.

The Court held first that EPA applied an overly expansive definition of the term "air pollutant" when it determined that the Act compelled the inclusion of greenhouse gas emissions in the PSD permitting program. Second, relying on an earlier NAHB Supreme Court victory (National Association of Home Builders v. Defenders of Wildlife), the Court held that EPA far overstepped its bounds when it rewrote the statutory provisions that trigger PSD requirements.

Today's decision stops EPA in its tracks, ensuring that NAHB members will not be subject to this onerous federal pre-construction permit.