Like A “Good Neighbor”: EPA Waits For U.S. Supreme Court Ruling on Rule Regulating Air Emissions Under the Clean Air Act

Sarah Fritz

Associate Editor

Loyola University Chicago School of Law, JD 2025

On February 21, 2024, the Environmental Protection Agency (EPA) argued in front of the U.S. Supreme Court, attempting to continue regulation of the “Good Neighbor” rule in eleven states. The EPA announced the final “Good Neighbor Plan” on March 15, 2023. The “Good Neighbor Plan” established under the Clean Air Act (CAA) aims at reducing emissions from upwind states that cause pollution in downwind states. 

In response to the EPA finalizing the rule, three states ⎯ Ohio, Indiana, and West Virginia ⎯ filed suit in the D.C. Circuit claiming a violation of the Administrative Procedure Act. After the D.C. Circuit refused to stay the administrative action, the three aforementioned states filed an “Emergency Application for Stay of Administrative Action” with the U.S. Supreme Court. The Supreme Court heard oral arguments on a temporary stay for the “Good Neighbor” regulation on February 21, 2024, and the EPA awaits the resulting ruling. 

What is the “Good Neighbor” plan, and why is it controversial? 

The EPA finalized the “Good Neighbor” plan to complete their obligation under the CAA to address pollution caused by nitrogen oxide emissions traveling beyond state boundaries. Traveling air pollution can contribute to unhealthy levels of ozone pollution, forming smog and leading to health impacts such as respiratory problems, asthma, and other lung-related illness. 

The rule, originally created in 2015, mainly applied to states located in the Midwest and South which caused ozone pollution that spread to other localities along the East Coast. Some states included in the “Good Neighbor” plan, like Illinois, both cause downwind pollution and face effects from other states’ pollution.  

The EPA estimates that the final rule implementing the “Good Neighbor” plan would result in numerous public health benefits: reduction of asthma cases by at least 1.3 million, prevention of approximately 1,300 premature deaths, and an abatement of approximately 2,300 hospital or emergency room visits. 

The “Good Neighbor” plan has faced pressure from each side of the political spectrum. During the Obama era, republicans and business leaders claimed that the plan may harm the economy and could cause a loss of jobs. The Trump Administration worked to weaken the rule. However, the EPA under the Biden administration has worked to restore control over air pollution caused by both power plants and industrial sites. 

What led to the current litigation over the “Good Neighbor” plan, and how will the Supreme Court ruling impact the EPA’s actions?

The EPA ordered states to create plans aimed at reducing the impact of downwind air pollution. However, twenty-one states submitted plans to the EPA that included no reduction or changes to their emissions. The EPA rejected the plans in early 2022, announcing a plan to create a federally-coordinated nationwide plan to reduce emissions instead for twenty-three states.

The states of Ohio, Indiana, and West Virginia filed suit under the Administrative Procedure Act, which sets forth rule making procedures, covers agency action, and sets standards for judicial review for cases where a party is aggrieved by agency action. The Administrative Procedure Act requires agencies to make decisions in a way that is not arbitrary or capricious, meaning the decisions are made on a whim or without regard to facts or law. 

The Supreme Court’s ruling will temporarily block the “Good Neighbor” plan from taking effect, however, it may lead to a “trickle down” effect where litigation across the country begins increasing as states aim to prevent the EPA from implementing the federal plan. While the states cite the unreasonable costs of compliance as a reason for the emergency stay, the EPA claims that each plan is workable if the states are willing to comply. 

The air quality benefits of the “Good Neighbor” plan far outweigh any costs the state may have to bear in reaching compliance. Not only should the Supreme Court deny the application for an emergency stay, the states should comply with the “Good Neighbor” plan to prevent further harm to downwind states from power plants and industrial facilities that aren’t even located in their borders.