Legal Update: Courts Hear Challenges to Energy Regulations that Threaten Small Business

Date: July 01, 2022

Three Cases of Small Business Fighting Against Government Regulation

Energy has become a hot-button topic as small businesses fight against overreaching government mandates in both state and federal courts. The NFIB Small Business Legal Center continues to fight, on behalf of small businesses, against onerous regulations and costly compliance standards. Here are three court cases, including one where the U.S. Supreme Court ruled in small business’ favor.

West Virginia v. Environmental Protection Agency

NFIB commended the U.S. Supreme Court’s June 30 decision to uphold a lower court decision which drastically increased the Environmental Protection Agency’s (EPA) authority to address climate change without clear Congressional approval.

The case concerned whether the Clean Air Act gives the EPA authority to enact carbon emission standards which are near-impossible to meet on existing coal-fired fuel plants. NFIB filed an amicus brief arguing that the EPA needed clear authorization from Congress before imposing costly and significant regulations on the energy sector.

“Small businesses are relieved with today’s decision from the U.S. Supreme Court,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “Energy costs are a large expense and a top concern for small businesses. The Supreme Court made the correct decision today by reining in the EPA’s overreach and requiring clear Congressional approval for expansive regulations affecting the entire energy industry.”

Oregon Farm Bureau Federation, et al. v. Oregon Environmental Quality Commission (EQC).

On June 14, NFIB joined a coalition of business organizations opposing the Oregon EQC’s attempts to impose a cap on statewide greenhouse gas emissions. NFIB argues that the EQC lacks the authority to issue a statewide rule of this magnitude without first getting approval from the state’s legislature.

The Governor of Oregon issued an executive order calling for the reduction of statewide greenhouse gas (GHG) emissions to 45% of 1990 levels by 2035 and 20% of 1990 levels by 2050. The EQC also announced the Climate Protection Program, which requires progressive reduction of GHG emissions, culminating in a 90% decrease by 2050. Companies that do not meet emission reduction requirements face financial penalties.

“The sweeping Climate Protection Program greatly affects Oregon’s small business community,” said Karen Harned. “The rule limits the availability of covered fuels and will increase energy costs for small businesses and negatively impact their bottom line. The Oregon state legislature failed to pass cap-and-trade legislation in recent years and the agency is overstepping its authority by using administrative fiat to pass statewide rules with financial penalties.”

“Gas prices and inflation are hammering Oregonians right now,” said Anthony K. Smith, NFIB Oregon State Director. “The last thing small businesses need is a new government program aimed at artificially raising the cost of essential fuels used by Oregonians every day. It’s especially troubling that the state would attempt to create this program by administrative rule – without ever receiving a vote in the Oregon Legislature.”

Bowfin Keycon Holdings, LLC, et al. v. Pennsylvania Department of Environmental Protection.

On June 6, NFIB filed an amicus brief at the Commonwealth Court of Pennsylvania, supporting a challenge to a state regulation, which authorizes Pennsylvania to participate in the Regional Greenhouse Gas Initiative (RGGI). NFIB argued that RGGI requirements represent an unconstitutional tax, the RGGI itself is an unlawful interstate compact, and joining the RGGI will be detrimental for Pennsylvania’s businesses and consumers.

The RGGI is an initiative of 11 New England and Mid-Atlantic states to reduce greenhouse gas emissions by capping and reducing CO2 emissions from electric power plants. Pennsylvania governor Tom Wolf ordered the state to join the RGGI, but Pennsylvania’s entry into the RGGI was delayed by a temporary court order.  That order expired in April, opening the door for the regulations to go into effect.

“The Regional Greenhouse Gas Initiative will impose significant new energy costs throughout the Commonwealth,” said Karen Harned. “Joining the RGGI will disproportionately affect small businesses at a time when small businesses are managing uncertain economic conditions, including rising inflation. Additional regulations on small businesses, like the RGGI, will further deter the small business recovery.”

“Governor Wolf and his team of unelected bureaucrats do not have the authority to impose a tax under the constitution,” said Greg Moreland, NFIB Pennsylvania State Director. “Every other state that has joined the RGGI has obtained legislative approval because they recognize the General Assembly controls the purse strings, not the executive branch.”

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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