"This is a groundbreaking administrative-law case," said Justin Savage, a former Justice Department environmental lawyer who served under the administrations of George W. Bush and Obama and a partner with the law firm Hogan Lovells. "It essentially says that when a statute is ambiguous an agency must consider costs."
"The reason I'm struck by this and a bit troubled is that there's a real question of whether this decision applies broadly. And I read it as applying broadly," said Lisa Heinzerling, a Georgetown law professor and senior climate-policy counsel to former EPA Administrator Lisa Jackson.
If that precedent sticks, it could throw a wrench into the gears of the regulatory machine if agencies must devote additional time and resources making sure their cost calculations hold up in court.
"After this decision, an agency would not want to walk into court saying, 'Your Honor, we did not consider costs at all when deciding to take regulatory action on an issue,'" said Jonathan Adler, an environmental law professor at Case Western Reserve University.
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Even if the court decision does not set such a precedent, Republicans and industry challengers say Monday's verdict proves that the administration overstepped the limits of the law.
"The mere fact that the EPA wished to ignore the costs of its rules demonstrates how little the agency is concerned about the effects it has on the American people," House Majority Leader Kevin McCarthy said after the ruling was handed down. "From its ozone, to greenhouse gas, to navigable waters rules, the EPA continues to burden the public with more and more costs, even as so many are still struggling to get by and improve their lives in this economy."
The Supreme Court's decision to side against the agency also serves as a painful reminder to the administration that it may not always see its regulatory actions upheld in the face of legal challenges.
"By EPA's logic, someone could decide whether it is "appropriate" to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system," Scalia wrote in the majority opinion.
For now, the mercury regulation remains in place. A lower court will decide whether the rule will stay on the books while the agency determines how to comply with the high court's ruling.
"We are reviewing the decision and will determine any appropriate next steps once our review is complete. EPA is disappointed that the Court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to compliance," Melissa Harrison, a spokeswoman for the agency said after the verdict.
Ultimately, the scope of the ruling may not become clear until additional litigation has a chance to test its limits. And a slate of environmental lawyers were quick to say that the ruling won't create a ripple effect.