we decided to have a program -- a mental health program in a post-conflict country, and we decided on liberia, because we already had access to information, trying to help women know what was available to them, and access to justice -- we had people all over liberia anyway. we found out they had one psychiatrist in the country. that was all. no other mental health professionals. so we organized a program to help the country organize a mental health program and trained 144 -- our goal was 150. we saved 144 before the ebola crisis. but when the ebola crisis came along, we started working with -- we stopped the classes, and we started working with the families of those who died and

the survivors. and we did that all over the country. all of the access to justice and access to information people. on may 9 ebola -- libera was declared -- liberia was declared ebola free by the world health organization. that's one of the things my program did. it seemed a miracle to me with a note mental health workers then -- with no mental health workers, then to have 144 in the ebola crisis. it was a miracle that we were there to do that. [applause] walter: the woman in the back. you've got it. shout. i'm trying to get our staffers physical fit by calling on people in the back for a change. >> thank you rosalynn, mr. president. we would like to ask a favor from you.

we just got married. my new husband -- my only hu sband. you are really nice and good example for us, how did get together for such -- how to get together for such long years. that's why we thought if it was possible, to ask you a favor design as a witness on our marriage license -- to sign as a witness on our marriage license. walter: i would leave it up to the president and mrs. carter. maybe we could see what could be handled. this will be -- we will try to make it quick and get one more afterwards. >> given what you said about america promoting human rights how does that or how should it

affect america's alliance with saudi arabia? pres. carter: that's a very difficult question to answer. because i'm particularly interested, which we haven't mentioned this time, about the rights of women. i wrote about that, describing all the abuses of women in the world. the most horrible human rights of use on earth. saudi arabia is one of the chief culprits in mistreating women. it's almost impossible for a woman in saudi arabia, even if she graduates from college, to get a job and hold a job. women are not permitted to go on the sidewalks were into stores -- sidewalks or into stores shopping in saudi arabia unless accompanied by a husband or another man. she has to wear a veil. women are not promoted to vote or to drive a not a mobile in saudi arabia -- drive an automobile in saudi arabia. i wish the united states was not supporting saudi arabia in their bombing of yemen, by the way.

it is important to have saudi arabia supporting our policies within the arab world. it is no doubt that the king of saudi arabia, the protector of two holy places that all muslims worship, is a valuable ally. the united states has to swallow its commitment to human rights in order to have good relations with saudi arabia, because saudi arabia can help us in many ways concerning stability of the oil and dealing with other arab countries. it's not a good answer, because there is no clear answer to it. but you cannot be absolutely pure in saying that human rights has to come above everything because there are some human rights abusers with whom we have to negotiate and deal. by the way, the carter center, we meet quite freely with human rights abusers and people who are basically outcasts in the international world because

they are the only ones who can end the human rights abuses or bring peace to an unnecessary war. so we need with them in order to try to negotiate peace and to promote human rights. walter: it's a good question, and there is no simple answer. there is a young woman who everybody keeps pointing to. you get the last question. you have lots of fans. >> i have a question for president carter. i know you haven't spoken on this yet, but i know you left your church. can you please describe what led you to do that? pres. carter: for 70 years, i was very active in the southern baptist convention. i was on international boards of directors and things of that kind. but in the year 2000 the southern baptist convention decided at their convention in florida to depart from what i

consider the holy scriptures. and they ordained for instance, that women had to be subservient to their husbands and inferior in the eyes of god. and they also decided that a woman could not be a deacon in the church or a pastor or priest in the church for a chaplain in the military forces. and in addition to that, they even went so far as to say that a woman who taught in the baptist seminaries couldn't teach a class if there was a boy among the students. so, because of the obvious discrimination against women, we decided to withdraw our allegiance to the southern baptist convention. [applause] we still belong to a baptist church, merrin off the baptist church -- maranatha baptist

church in plaines. i hope you will come and visit not all on the same sunday. we have women deacons. rosa was the most famous woman back to -- woman baptist deacon in the world when she was a deacon. we have had women pastors as well as men pastors. our baptist church demonstrates that women without question, should be equal in the eyes of god. [applause] walter: that is a beautiful sentiment that ties in everything you've been doing for 90 years. i have one quick, little question, which is you told me found a better fishing spot that you even told president putin about. pres. carter: the year before

last -- last year in june, we went fishing in the pinoy river in russia west of murmansk. we had already finished in the eastern part -- already fished in the eastern part. then we were closer to new york than we weret to moscow. we had a wonderful visit there. when i got to fishing in the pinoy river in russia, i wrote president putin a letter and told him he might enjoy going there to fish and also to continue to protect the stream and not let it be to spoilt -- be despoiled in any way. if you go to norway or to canada to fish for atlantic salmon, if you catch two a week, that's really good. during the five days we fished in russia, together, we caught

38 atlantic salmon. it's the best fishing of your life. go to russia and fish in the pinoy river. i hope that president putin will protect this river. it's when i asked him to do. mrs. carter: we fly fish and we catch and release and we press in the hook so it won't hurt the fish. walter: i always feel that flyfishing is a sport for life. what you've done is been good stewards of the planet and good servants of humanity, for which we thank you very much, mrs. carter, president carter. [applause] [captions copyright national cable satellite corp. 2015] [captioning performed by the

national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

>> the supreme court today issued the final three rulings of its current term. in the case michigan versus the epa, the court ruled the epa needs to take economic cost into consideration when limiting emissions of dangerous pollutants. you can see the supreme court oral argument from the case in just a few moments on c-span, at

6:25 p.m. eastern. at 8:00 p.m. eastern, a case on lethal injection. the court ruled against three death row inmates who said that the lethal injection could violate the constitutional prohibition against cruel and unusual punishment. now, the executions can go forward. in the third case decided today, the supreme court ruled it is constitutional for an independent commission created by arizona voters to draw congressional districts without partisan interference from state lawmakers. the oral argument in that case starts at 9:05 p.m. eastern on c-span. tomorrow on c-span, new jersey governor chris christie announces his campaign for president. he will become the 14th republican to enter the race. that announcement is live on c-span at 11:00 a.m. eastern from governor christie's high school in livingston, new jersey. >> president obama today signed

two trade bills fast-track trade promotion authority, requiring an up-or-down vote on deals negotiated by the present, and paid assistance for retraining workers who lost their jobs because of imports. >> ladies and gentlemen, the president of the united states. [applause] president obama: thank you. thank you. thank you so much. thank you. thank you. please, have a seat. thank you so much. thank you. thank you very much. hey! thank you. thank you guys, good work. thank you very much. please, have a seat. thank you. welcome to the white house.

i thought we would start off the week with something we should do more often, a truly bipartisan bill signing. [applause] president obama: for 6 1/2 years we have worked to rescue the economy from the worst financial crisis since the great depression. to get it growing again, to rebuild it on a new foundation for prosperity. today our businesses have created more than 12 million new jobs in the past five years. that is the longest streak of job growth on record. 401k's have been replenished. the housing market is stronger and more than 16 million americans have gained the financial security of health insurance. [applause]

pres. obama: but a constantly changing economy demands our constant effort to protect hard-working americans and protect their success. one of the things we have to be doing is rewriting the rules of global trade to make sure that they benefit american workers and american businesses and that they reflect american values especially now while our economy is in a position of global strength. the two bills i will sign today will help america do just that. the first will help us pass new 21st century trade agreements with higher standards and tougher protections than those that we have signed before. the transpacific partnership for example includes strong protections for workers and the environment. unlike previous agreements those provisions will be enforceable. and that is good for american businesses and american workers because we already meet high -- higher standards than most of the rest of the world. we want to make sure everyone else catches up. this agreement will help us level the playing field. the second bill offers even more support for american workers and

it renews and expands the trade adjustment assistance program which provides job training and other assistance to tens of thousands of american workers every year. it gives us new tools to help american steelworkers and folks in other critical industries fight against unfair practices by other countries. it also reauthorizes agoa, the african growth and opportunity act, which had strong bipartisan support for many years now and which helps open up many markets in africa to american businesses while making it easier for african businesses to sell their products in america. we are extending a similar program to haiti and renewing support for other developing economies through what's known as the generalized systems of preferences. now, i think it is fair to say that getting these bills through congress has not been easy. [laughter] pres. obama: they have been declared dead more than once

they have inspired long and passionate debates, and that is entirely appropriate for our democracy. that is how this country is supposed to work. we are supposed to make sure that we air our differences, and then ultimately congress works its will, especially on issues that inspire strongly held feelings on all sides. but i would not be doing this, and i would not be signing these bills if i was not absolutely convinced that these pieces of legislation are ultimately good for american workers. i would not be signing them if i wasn't convinced that they would be good for american businesses. i would not be signing them if i did not know that they will give us a competitive edge in this new economy. and that new economy cannot be reversed. we have to embrace it. this legislation will help turn global trade, which can often be a race to the bottom, into a

race to the top. it will reinforce america's leadership role in asia, europe, and beyond. if i did not believe it, i wouldn't have fought so hard to get these things done. so, this is a good day. i want to thank everybody who has helped us get to the -- to this day. we've got small business owners here environmental and global development groups, other advocates who are a big part of this campaign. we got some outstanding members of congress, both republican and democrat, who came together to make this happen. i want to name just a few although congress is on recess, i think it is important to acknowledge speaker john boehner, leader mitch mcconnell, senators orrin hatch and ron wyden congressman paul ryan and pat tiberi. and thanks to all of the senators and representatives to the tough votes and incurs the -- and encouraged their

colleagues to do the same. this is a true bipartisan effort. it is a reminder of what we can get done on the toughest issues when we work in a spirit of compromise. i hope we are going to be able to summon the same spirit on future challenges like starting to rebuild some of our roads and bridges and infrastructure around the country. [applause] pres. obama: because the american people deserve nothing less from us. let me just make one more comment. the trade authorization that is provided here is not the actual trade agreement. we still have some tough negotiations that are going to be taking place. there has always been concern that people want transparency in those agreements. under this authorization, these agreements will be posted on the website for a long span of time for people to scrutinize and take a look at. so the debate on the particular provisions of trade will not end with this bill signing. but i'm very confident that we will be able to say at the end of the day that the trade agreements that come under this

authorization are going to improve the system of trade that we have right now. and that is a good thing. it is also important to note that trade is just one part of a broader agenda of middle class economics. we still have more work to do on infrastructure. we've still got more work to do on job training. we still have more work to do on research and development. we still have more work to do to make sure that folks are getting good wages for hard work. we still have too many communities that are left behind around the country. we still have more work to do to support our small businesses who are extraordinary job creators. so, this is not the end of the road. this is just one step in a long path to making sure the next generation enjoys the extraordinary prosperity that our parents and grandparents passed down to us.

although there will be disagreement between the parties on particular elements, i think what we can agree on is, in this country, if you work hard, you should be able to get ahead, no matter where you come from, what you look like, or who you love. [applause] with that, let me sign this piece of legislation. pres. obama: this may take a while. [laughter]

pres. obama: there we go. that is one. [applause] pres. obama: i feel like somebody else should do this. [laughter] >> no, thank you. [laughter] pres. obama: maybe not this particular piece. [laughter] >> i do like signing bills

though. [laughter] [applause] [applause] pres. obama: all right, those of you who work for me, get back to work. [laughter] thank you very much, everybody. [applause]

>> the supreme court today issued the final three rulings of his current term. -- its current term. it ruled that the epa needs to take economic cost into consideration when limiting emissions of dangerous pollutants. you can see the argument from that case in just a few moments on c-span at 6:25 p.m. eastern.

at 8:00 eastern, a case on lethal injection. the court ruled against three death row inmates who said a net drug could cause excruciating pain and thus violates -- said an execution drug could cause excruciating pain and thus violates the constitutional rule against cruel and unusual punishment. now, the executions can go forward. the court ruled it is constitutional for an independent commission to draw congressional districts without partisan interference from arizona lawmakers. the oral argument in that case starts at 9:05 eastern. tomorrow on c-span, new jersey governor chris christie announces his campaign for president. he will become the 14th republican to enter the race. that announcement is live on c-span at 11:00 a.m. eastern from governor christie's high school in livingston, new jersey. >> of the supreme court today ruled against three death row

inmates who said an execution drug could cause excruciating pain and thus violates the constitution's prohibition against cruel and unusual punishment, but in a 5-4 decision, justice samuel alito wrote there is little scientific evidence drug causes severe pain. now, the executions can go forward. >> oral argument this morning in case 1440 six, michigan versus the environmental protection agency and the consolidated cases. >> mr. chief justice, and may it please the court epa's view that it can decide to regulate electrical utilities without considering cost is contrary to the text and structure of section 7412. the text set out to distinct terms -- out distinct terms about whether it is appropriate and necessary to legislate. epa found it is necessary to

legislate because of the existence of public health terms and found it necessary in the same way. it's interpretation -- its interpretation -- >> i am not quite sure that that is what epa said. my understanding is that it is necessary because of public health harms and it is appropriate because there are technologies that can address and remedy those public health harms. on the one hand, it said that the phrase "appropriate" lends to the harms, the phrase "necessary" went to the -- >> when they relied on the availability of controls, they did that home -- only after saying they must find that appropriate after determining the health hazard exists. they have already determined that it exists. only>> can you give us a citation of their opinion? >> it speaks for itself, i

assume? what are you referring to. >>0--- to? >> this is in the brief. it's the final rule volume one of the u.r. petition appendix. let me find the language. i have the volume. if you turn to the u.r. petition appendix volume one. >> good lord. [laughter] >> page 196. this is the text of the final rule. page 206 a. i misspoke the first time. 206. it says, we must find it appropriate to regulate

e.g.u.'s under clean air act section 112 if we determine a single half emitted poses a hazard to public health or environment. we must regulate. the phrase must regulate means when you get back to the ability to control there is nothing else to be done. you've already said we have to do it so the availability of controls isn't doing any additional work. >> is the government going to say that if the predicate for regulation exists either emissions then it's appropriate to regulate. that's what the government will say. i mean, that's -- appropriate is a term --. it's appropriate to regulate if it's an emission. >> it is a capascious but i think it cuts against the government. one of the things in the term

appropriate is that in all of the circumstances in the context of determining whether you'd regulate cause is irrelevant circumstance so the very fact it is cuts against them. the very fact they said we must find this appropriate to regulate means the other -- >> well, they didn't look at the availability of technologies? is that what you're saying that? that they thought the ability of technologies was itself irrelevant to the determination? is that your argument? >> we're not saying they thought it was irrelevant. they thought well i guess logically irrelevant. they thought it was something they did look at when they did the utilities study they examined the availability of controls but then they said regardless of whether controls are available if the health hazard exists we have to regulate. >> i'm sorry. i thought they said only if it was necessary. congress was motivated to not listing theas sources because it didn't know whether the technology that was going to be put in place to control acid

rain would reduce the hazard sufficiently so regulation wasn't necessary. i have a different understanding of appropriate and necessary. appropriate if there were happens but necessary only if those haps were not sufficiently controlled by the other technology. >> both looked at if there was ongoing harm because both necessary and appropriate turned on the utility study which examined what health hazards would remain after all of the other regulations -- >> the health hazards could have been low enough so that no standards were necessary. >> well, they determined how severe, the severity of the health hazards. the severity when in determining whether or not a public health hazard exists at all so they looked at the effects and the only place they looked at severity in the final rule was determining whether the hazard existed.

once there were enough health effects there was a public health hazard they said we must regulate. the fact they said we must regulate necessary to regulate is exactly the same as they said was appropriate that we must regulate. >> hey can i step back for a minute? it seems this quest for very particular meanings attached to each one of these adjectives, appropriate means x and necessary means y, if we sit back a little bit, i mean that kind of language is used a l over the u.s. code. indeed, if that kind of language is used in our constitution, the necessary and proper clause, and as i understand what courts have done with that kind of language that they haven't insist ted that there be separate, defined meanings for each of those words. when john marshall was doing this he starts off with the word "necessary" and then he said, no. this is a phrase. we have to understand what the phrase as a whole means. and why shouldn't we similarly say this idea that, you know,

you can catch them in a redundancy or a super fluidity, it's just not right because it's a complete phrase. >> i think there are two responses. first of all the necessary and proper clause. in prince vs. united states this court recognized something might be necessary and not necessarily proper. it may be necessary -- >> we have separated out the two words and said something could be necessary and not proper. and what marshall said was that necessary doesn't mean absolutely indispensable. it just means useful. that's quite different from saying that proper has no role to play. it can be necessary. that is useful. to the federal government and yet not proper. so -- >> so what do you get to pick what it means? i mean, i saw it in our agency. we repeatedly say if a term is ambiguous and there's no legal definition of appropriate, it's

contextual, yes, but by definition if you're saying a word that's not self-defined, you have to look at, in context, and it's ambiguous. >> i don't think it's ambiguous in context. you can use the word appropriate in such a way everyone understands your meaning. if i said we're going to go someplace and take a group of people and i want you to behave in an appropriate manner and i told you we're going to the library everyone would know. >> i look at this statute and i see them doing the first part, the part of issue. and the very next provision says in four years instead of three do a mercury study that includes costs. i'm looking at it. i can very safely say one study doesn't use the word cost. the other does. the first one doesn't necessarily intend costs to be looked at. what is irrational or not plausible about that reading?

because all we have to do is find a plausible reading to uphold the e.p.a.'s incomplete terptation. >> irrational because they're taking a key statutory word and treating it as surplusage. the language i should have pointed you to earlier is on page four of our reply brief. by treating them and doing the exactly same work they're reading a word out of the stuste and it doesn't extend so far as to say we can violate the ordinary rule of statutory construction. >> the word "appropriate" often is a signal that -- you have an expert agency. so the word "appropriate" i think is used to indicate that the expert agency will do what it finds fit based on its expertise.

so how -- you are saying appropriate necessarily embodies a cost. a cost calculation. and yet this is a statute that uses cost directs e.p.a. to consider costs multiple, multiple times. is there any case in all of our decisions where we can say even though there were no instructions to consider costs, e.p.a. is required to consider costs? is there any such decision? >> no. i don't think this issue is written the same way where congress has given broad discretion to an agency, told them to look at all of the circumstances, and the agency has said we're going to ignore what is an important part of the problem. that's why in the way that judge cavanaugh looked at it this is a problem under the state farm doctrine because agencies are supposed to not ignore an essential part of the problem as they engage in reasoned decision making. >> i think what justice

ginsburg is getting at general lindstrom is sometimes what we've done is looked at silence and we've said that given that silence, cost considerations are precluded. right? so that's the example in whitman. sometimes we've said, silence still allows agency discretion. they can do what they want with it. but it's so far from our most closely analogous case, which was whitman, to say not only is cost consideration, you know, not precluded it's required when there's silence as to that subject. now if congress wanted to require something and clearly congress required this in other places, congress knows how to require consideration of costs, to get from silence to this notion of a requirement seems to be a pretty big jump. >> justice kagan, i don't think it is silent when it tells the agency to look at all of the circumstances and the material circumstances in the context of the question the agency has to answer is should we regulate

under this section, costs are part of the relevant materials. >> i'm not even sure i agree with the premise that when congress says nothing about costs, the agency is entitled to disregard cost. i would think it's classic, arbitrary and capricious agency action for an agency to command something that is outrageously expensive. and in which the expense vastly exceeds whatever public benefit can be achieved. i would think that's a violation of the administrative procedure. even without the word "appropriate." >> and i think that's where there's overlap between what the state -- >> sorry. the study of issue that congress commanded was simply a study, the administrator shall perform a study of the hazards to public health, reasonably anticipated to occur as a result of the emissions by

electric utility steam generating units. so the study that was directed to be made was only a public health hazard -- of public health hazards. and then it says the administrator shall regulate these entities after -- under this section if it finds regulation is appropriate and necessary after considering the results of the study. so if the study is directed only at public health hazards, it doesn't talk about -- it doesn't talk at all about costs. just public health hazards. why in the world would one assume that congress was thinking about costs? why didn't it do as it did with mercury? the study tells us how much control is going to cost. it didn't do that. it just said tell us if there are public health hazards.

>> your honor, it didn't limit the considerations e.p.a. was supposed to look at. >> it says only the study. >> it doesn't say only the study. >> it says the administrator shall regulate if the administrator finds such regulation is appropriate and necessary after considering the results of the study. after considering the results of the study. the only thing that the study requires is an evaluation of hazards to public health. i'm not sure how you get to them having to do another step. when the only step that is a prerequisite to registration is studying public health hazards. >> first of all, even e.p.a. doesn't think it's limited solely to the things that were studied in that utility study. they relied on environmental harms to justify. >> after considering only the

results of the study? it doesn't say that, does it? >> no, your honor. that's correct. >> they have to consider the results of the study. it doesn't say they can't consider everything else. and the word "appropriate" seems to suggest they may consider other stuff. >> correct. so there is a study they're supposed to look at. they're supposed to do something else. that second step is to figure out whether it's also appropriate and necessary to regulate. so it didn't stop at just the study. again, e.p.a. agrees they can look beyond the results of the study. they look at environmental harms which is not particularly mentioned here and is in -- >> it seems to me that a very salient feature of the statutes that we have to interpret, maybe the most salient feature, is that congress chose to treat power plants differently from other sources. it could have treated them the same way. and if it had done that, then the listing decision would not have taken into account costs.

it would have been based on emissions, right, or if it was an area source it would have been based on effect of health alone. so what, if anything, can we infer from that, from the fact that congress pointedly decided to treat power plants differently? >> i think we can tell that they're trying to create a different -- they're trying to create something different here than elsewhere. >> to create a different regime, the reason it is clear they were trying to create a different regime because they thought the acid rain program might have a real impact on what these electric utilities were doing. so they said, wait and see. let's see how the acid rain program works. let's see if we still have a problem to solve. and that's the reason why they put the electric utilities in a different category, isn't it? >> that highlights why costs are significant. the acid rain program in particular was an economically based approach. it was determined to regulate in a cost effective manner. >> the point is the acid rain

pro-fwram didn't do what congress thought it might have done, and it was still left with this issue of continuing harm from the electric utilities, and then once that happened, it seems to me that it's natural to take a look at the rest of the statute and to say, let's regulate in a similar way to the way all other industries are being regulated. >> but if they'd wanted to do it the same way there would have been no need to use the phrase "necessary and appropriate" they could have simply gone to the 10-ton threshold that applies. so the fact they used different criteria here as oppose today criteria listed in 7412 c -- >> they could have but they might have thought let's take a look at the acid rain program. let's take a look at the problem that still remains if any and let's give the discretion to the agency at that point because it will be years down the road in a different set of circumstances. >> but the discretion includes looking at the entire problem.

again, the language in the circumstances requires looking at the material circumstances. and this ties into the state farm test. you have to look at all of the relevant circumstances if you're going to use your reasoned decision. you can't ignore an important part of the problem. >> if the reason for the separate treatment was belief that the acid rain program would be sufficient at some point in time, to bring emissions from power plants below the level that would result in their being listed if they were other sources, why would it be necessary to enact this separate provision asking whether it's necessary and appropriate to regulate them? i don't see how that can be the explanation. >> yes, your honor. they could have had a three-year delay if that is all they were trying to do as opposed to -- and then go through the ordinary system. >> they didn't know. they thought it might. they thought it might not. they were going to wait and see. it depended how the industry responded to the regulatory requirements of the acid rain program. >> that still doesn't explain

your honor why they chose these different criteria as opposed to just reiterating the criteria that are under 7412 c under the ordinary thing that applies to every other source. they are still trying to treat electric facilities differently. i'd like to return to one point about the acid rain program. again, if you're addressing emissions from electric utilities and a program specifically targeting electric utilities as they did in the acid rain program and that was entirely based on cost effectiveness, it makes little sense to look at what's remaining after you've already done that and then to say in this area of diminishing marginal utility we're going to say costs are irrelevant. that's backwards. costs would be especially relevant in the area of what's left over. >> when the statute refers to the emissions standards for the 12% of the best performing plants, will the government say that that implicitly is a cost consideration? is that their position and if so how do you answer it? >> i expect they will. the way i'd answer that is to say that looks at plants across

the range of how old they are. plants built in 2005 for example might have been built in such a way that they have technology where it was cost effective to include certain control measures but if you're looking at plants built in 1960 imposing the same control measures on an older plant is something that would be a lot more expensive. it's the difference between renovating your house and building a certain way in the first place. >> that's true. >> mandated base from which the government must operate >> it is. >> and it seems to me there is an implicit cost consideration there. you still say that's insufficient because -- >> yes your honor, insufficient because it's not -- i'm explaining why it doesn't necessarily take costs into e -- into consideration. the fact that some utilities were able to impose things doesn't mean it would be cost effective for others to do it. >> why isn't that taken care of by i mean, if they have costs

somewhere, so they shall the other side says there's room for that. but suppose that 25% of all electricity generators are near water falls, it's as easy for them. okay? but 75% it's impossible and they'll all go out of business and we'll have no electricity. imagine that were so. could the e.p.a. under their current theory take account of that? >> well, i guess the answer, you want to say is no. but they say yes they can. what about this 12% rule? how does that -- a little bit earlier in the statute it says the administrator may distinguish among classes types, and sizes of sources. so if you really had this situation, you could say look. 75% of the generators in the united states have this really old technology and they'll all go out of business and e.p.a. can say, but it's a different class. okay? i mean if that were really

true. so don't they have, through that provision, and the 12%, and the next one, the ability to take into account at least serious cost problems? >> assuming they have the ability to take into account -- >> say yes or no. do they yes or no? >> no. >> no they don't. why not? >> the reason that costs are not directly relevant to the first one is what i was explaining with the 12%. in other words as you, the example you gave shows that some might be able to have the lower cost effective approach just because they're near a waterfall. so relying on the fact that 12% were able to meet this. >> i wanted the answer to this. my point was if in the imaginary situation that i've imagined 20% of the generators for whatever reason can meet this pretty easily, the next 80% will require the entire gross national product to meet

it. suppose that were the situation. you, i guess, could go to e.p.a. and say create of that second group a separate class. a separate type. for that's the reason it's so expensive. and, therefore, the 12% doesn't apply to them. because they were in a separate class. now, my question is, can you legally make that argument? when they will take it into account? that that's what i want a yes or no answer to. >> i think the answer might be, yes in the future. but now we can't do it because -- my point is -- >> you're saying yes in the future. let's go now to this case and say do you make this argument? >> i don't believe either side has made that argument. >> has the agency made this argument? >> the agency has not -- >> we're going to take cost into account. we're going to use this provision justice breyer discovered and that's what we're going to do. is that the how the agency issued its rule?

i never heard of this. >> no. >> wait. >> because i still want to know a fact. i want to know the fact, and you are familiar with this record is did anyone on your side of the issue ask the agency to take costs into account brutally, roughly crudely, or did they all say, we want a cost benefit analysis? i would like your characterization of the record on that point. because reading what they said, it's about cost benefit analysis, that paragraph. so that gave me the idea that maybe everyone interested in costs asked for a cost benefit analysis. >> i think the answer is that we asked them to consider costs. we thought a cost benefit analysis is the ordinary way a reasoned agency decision making happens after some vague sense of what the costs are but by

doing an analysis and they said, their entire position here, is that we don't need to do that because costs are irrelevant. >> if i understand what happens, listing and standards are the only thing you can generally appeal from. it is really a final agency action when the -- when the standards are issued. the thought it was the issuance of the standards that the government sometimes breaks up the sources and the amount of emissions each type of source that justice breyer is talking about can have. so i think the listing is just of a broad category because we've had plenty of cases in this court where we've looked at the agency saying this type of source meets these

standards. that type meets another standard. isn't that the way it works? >> that highlights why they're not treating this as a separate listing vs. regulatory decision. they did both at the exact same time the same time they made the necessary and appropriate standard they also promulgated the emission standards. that shows it isn't a typical listing standard. >> they are subject to minimum standards aren't they? >> correct. >> once they're listed minimum standards apply, right? the agency could have discretion whether to lift the standards further but the minimums apply right? >> that is the agency position that we must -- my time is up. >> thank you, mr. lindstrom. mr. brownlee? >> mr. chief justice, may it please the court, i would like to make three points to supplement my colleague's argument first regarding the nature of power plant

regulation under the clean air act second the language of subsection 1 a and for the broader context. to begin power plants are the most regulated source category under the clean air act both before 1990 and after the 1990 amendments. so the court has talked about some of the programs. it is not only the -- the best retrofit technology, and a variety of other controlled programs both control in their quality. >> i would think that cuts the other way. that every other significant industry in the united states is subject to this program except for electric power plants. >> your honor, what it shows is that for the other industries e.p.a. estimated in 2010 that for all other industries this would impose compliance costs about $840 million. all of these other power plants would impose compliance costs, e.p.a. estimated in 2011 of

$10.4 billion. this single regulation now on air toxics imposes annual costs of $9.6 billion and what does one get for it? the three standards in issue here i think this is important to understand some of the questions that have been asked. there's a regulation for mercury, for nonmercury metals, and a regulation for acid gases. most of the costs here, the majority of about $5 billion annually are associated with the acid gas regulation, which the agency has concluded present no public health risk, no public health concern. the agency said that our modeling has consistently showed that power plant related exposures are at least an order of magnitude below the conservatively determined safe level. now in the title four program congress addressed the certification potential and record deductions of 9 million tons a year at about a cost of

one to $1.4 billion. the acid gas program is projected to result in reductions of acid gases about 40,000 to 50,000 tons per year at a cost of $5 billion. what that background shows your honor, is that when -- why congress treated power plants differently. it asked whether it is inappropriate to impose further regulation of a specific type, whether appropriate to impose regulation under this section on the most aggressively regulated industry under the clean air act. now, what -- >> can i take you back to justice breyer's first question? the first question was about the way these categories were. and how the categories enable the e.p.a. to mitigate certain onerous costs on certain segments of the industry. it's not an unknown provision of any kind. indeed, it seems to me that the provision very much cuts

against your argument because e.p.a. in some ways can't even figure out the costs until it links those category decisions but the aggregate costs not just within each category but the aggregate costs obviously depend on how e.p.a. categorizes and sub categorizes. so you would have the e.p.a. make the cost calculation before it really can given the structure of the statute. >> your honor, the cost does factor into a variety of determinations that are made as part of the regulatory process. what an e.p.a. issued its notice of regulatory finding in december of 2010, it said, this is nonfinal. e.p.a. confirmed again and this is at page 555 a of the petitioner's appendix that the there is no final n1a determination or listing and we are going to take comment on

that as part of the rule making to examine section 7412 d emissions standards. so as part of that the agency addresses, issues related to level of control sub category, and at the end of the rule making comes out with a regulation that has certain characteristics and consequences. here this regulation, what n1a says is in light of the study addressed whether such regulation under the section is appropriate and necessary for power plants. now, it may be necessary to regulate something like mercury if there's a public health risk and that's the only pollutant for which e.p.a. has calculated a quantifiable public health risk. but that may not be the appropriate regulatory regime if as e.p.a. has explained here their view of the statute is not to focus on whether such regulation is appropriate but whether listing of power plants under subsection c is appropriate just like every

other source. >> can i ask whether that listing is, and the minimum standards that that imposes are subject to the categorizeation device justice breyer was asking about? could the agency have said, well, they're going to put these into categories and because it is too expensive for certain, 80% of power plants that don't have waterfalls nearby we're going to exempt them from these minimum standards, can it do that? >> no, your honor, not at the listing stage but once the source category is listed at the standard setting stage they could consider sub categorizeation in order -- >> to reduce below the minimums? >> not below the minimums, your honor is perfectly right. >> that's what i thought. >> the minimums depend on the categories and the sub categories. you can categorize in such a way that the minimums would be up here or you can categorize in such a way that the minimums will be down there. >> and during the rule making, your honor arguments were made

about sub categorizeation and e.p.a. ultimately sub categorized the power industry with respect to one limited set of sources lignite sources with respect to the mercury standard. otherwise e.p.a.'s position is once listed, it triggers an obligation to issue emission standards. >> so this is an obligation as to some standard but again the minimum standard can vary dramatically depending on how the categories and sub categories are set up and because the dramatically depending on how the subcategories are set up . so, you are having the epa consider cost before the epa can know what the cost's are. >> your honor, if i can respond to that -- epa doesn't know the costs as it takes the notice of

there is no notice taken to determine what the costs are. justice sotomayor: further to what justice breyer said, as you had an opportunity and apparently had taken advantage of it to tell the epa it should sub categorized this source and decided to sub categorized just one piece of it, so what you're really telling us it is not the listing. it is the way they set up their emissions standards i disagree with, because they could have

decided there were some categories that did not require a standard at all. i am presuming they could have said anybody by the water -- they are part of the 12%. they want to do cost by everyone else who is not by the water. >> conceptually, your honor, they could have sub categorized the entire industry, but that is not what they did in this rulemaking and with respect to certain of the regulations -- justice sotomayor: but what you're asking us -- this is a challenge to a regulation that is only piecemeal. you are arguing that they should have considered cost, but they obviously did before they issued the standards. you can't look at the standards and the commission -- emissions

in a case like this in isolation. >> if i could try to answer the question once again. i note that the study looks at alternative control strategies. the agency determines that such determination is necessary, so the focus is on the regulation that they decide to address with the remaining public health hazard -- >> did epa say we are not going to take costs into account at the listing stage because we will take it into account as

congress -- >> no, they did not. is it true that 50% of the industry will use gross the medic -- rose thomistic product etc., but it sounds like even if that sounds through they would not have taken it into account. so, they say the epa does not determine -- do you see the problem? for me, they are saying, don't worry. maybe they should have written knowing what we know and what is undisputed so far, we do not think that the cost problem is big enough for us to warrant a cost-benefit analysis or other consideration. ok. then we take it into account. so, there is no problem if it is within reason. but they didn't, so that is why i am looking to see -- is there

really a different way that they could eliminate this horrible scenario if it existed, which it didn't? do you see what i am driving at? that is the answer on that. >> i want to emphasize this is not an argument whether or not to regulate mercury, which is an identified public health risk. there is a regime defined which the government says is the listing under all of these other categories and the minimum control standards is the right way to do it. with regard to it being sub categorized, it will have tremendous impacts as far as gas regulation.

chief justice roberts: we cannot hold the agency on -- >> correct. chief justice roberts: so it is it true that it was not in the below? >> that is correct your honor. my understanding is it is whether it should be under the regime that applies to different -- >> the agency at that point in time was only answering the very first question. the threshold issue. at that point the agency said the costs were irrelevant. they become relevant later in the analysis, in a variety of ways, through the 12.5%, through

the categorization, the sub categorization, so cost, cost, later, but as to this particular thing, the agency said, yes here we do not consider cost. we could, but we do not want to because there is all of this potential for costs to come in afterward. mr. brownell: your honor, it is cost, cost, cost and having applied these standards, it makes its determination in light of the cost and impacts and other factors. justice kennedy: do you think when the word appropriate is used it requires a cost-benefit

analysis in any context? mr. brownell: any context is so broad, i do not know. but in this context, that regulation has certain characteristics and consequences we have talked about this morning, including the fact that it has been posed as a pollutant -- justice ginsburg: before your time is out, could you clarify for me why at this stage this is something we should be concerned about because there is this regulatory impact assessment. that is the impact analysis. >> yes -- mr. brownell: yes.

the co-benefits, all of those benefits are co-benefits. only $4 million to $6 million are associated with allusions. those co-benefits were not part of the regulatory determination for good reason because there are important questions regarding their importance under the standard. the standard is extensively regulated under the quality standards. in fact, those are quality standards where we recently revised the context. the lower exposure for the co-benefits are too uncertain. there are certain questions about legal relevance. justice sotomayor: -- dr.

engelder: -- chief justice roberts: thank you, counsel. mr. brownell: thank you, mr. chief justice. >> it should be affirmed for three basic reasons first because it is the most natural reading of the text. it harm allies is -- it harmonizes the regulations cause it applies the same regulatory logic to power plants that congress directed for every other source and that is whether to list for regulation based on health and environmental hazard alone and considering costs. and as matter of common sense and government practice, it was certainly appropriate to list power plants based solely on health and environmental hazards because that reflects the approach that congress chose not

only in this regulatory program but all of the major regulatory programs under the clean air act. chief justice roberts: you can see, don't you, that epa could have interpreted the statutory action to allow cost? mr. verrilli: i think the best interpretation of the statute is it did not provide for the consideration of cost of the listings age -- chief justice roberts: appropriate and necessary allows us to consider cost. i ththat would be appropriate. mr. verrilli: it does not preclude costs, but under chevron, what it has to do is explain -- chief justice roberts: you are

saying the agency deliberately tied its hands and said we cannot consider something we can consider otherwise? mr. verrilli: i think the best way to think about this, mr. chief justice is they decided it was appropriate to decide whether it was appropriate to regulate power plants -- chief justice roberts: i understand their argument that they could have done that, but i think it is unusual for an agency to say when they want to do something that that is the only thing they could do. agencies usually maintained for themselves as much discretion as they can. it strikes me as unusual that the agency would not consider cost but to say we are prohibited from considering costs strikes me as very unusual. mr. verrilli: i'll think so, mr. chief justice. they said we will not consider cost at the listing stage --

chief justice roberts: i thought the phrase was appropriate and necessary did not allow them to consider cost san appropriate and necessary goes to the question of whether the power plant should be listed for regulation under section 7412, which would kick in the regulatory standard by which costs were set? justice kennedy: could this agency every thirdly considered costs at stage one? mr. verrilli: i do not think the statute text unambiguously for bids them, but they determined that the best reading was power plants, because after the study was conducted congress required, epa determined powerplants are no differently situated than any other source of hazardous air pollutants -- justice kennedy: for every other

source of hazardous air pollutants, what congress mandated was you do not consider cost when you decide to regulate. you do consider costs under section 74. 12b -- justice alito: how is that consists -- consistent with the statutory regime? congress would not have enacted a separate provision for powerpoint. -- four power plants. mr. verrilli: i agree that for power plants. what the petitioners are arguing is congress mandated a cost-benefit analysis that did not apply to any other source of hazardous pollutants but that

is not what the text of the statute says. what the statute says even though we know from every other source regulation would receive immediately, for power pants -- power plants, there was uncertainty whether they admitted pollutants, whether they needed re-regulations that solve the problem and whether there were alternative control strategies available. so what congress wanted was to study those three things. and then once epa made a judgment, it was to decide whether to list power plants for regulation. chief justice roberts: -- justice alito: this is what i do not understand at about your position. it seems to at least hold open the possibility that power plants would not be listed even if emissions exceeded levels listed for other sources. i do not see any reason why they

would treat them differently. you may disagree with that, but it seems to me that is a necessary inference from the statutory scheme. if that was the case, what factor my congress would have thought would justify allowing power plants to admit more than would be permitted if there were other sources. the petitioners say that power plants have to bear a lot of cost that other services do not have to bear, in particular the title for program. there omissions may exceed the otherwise permissible limit. they have contributed to the reduction in emissions in a way that would not be reflected in their own admissions. so, that is an explanation. i do not get what your explanation is. mr. verrilli: i know you are asking me to accept the premise

but i can't because the text and the history tell you what considerations congress left open and they were all related to the possibility of health hazards. the argument that your honor just post is not in the legislative history or in the text and if congress really thought that what they would have said to epa is, push the pause button, take the three years in study and study the cost problem. they would have expressly told epa to study cost and they did not do that. all they were concerned about was help -- justice alito: if all they were concerned about was health, why would they not have applied the same standards as on other power sources? mr. verrilli: is there a significant effect on public health. i think they came very close to

that. they told epa to make its judgment after the study. the study went to health standards. the reason i think they used the appropriate necessary language is because congress when it was legislating here in 1990 understood there might well be uncertainty at the end of the analysis that congress directed epa today. justice sotomayor: that is what the legislative history said. mr. verrilli: i would like to clear up a misconception about that. they were to unfold over 10 years, five years and then five more years, so epa would have to make a long-term projection, so i think what congress was saying was you have to exercise judgment.

justice breyer: there are to do parts to that. what were they thinking about appropriate if not be costs. alright, i see that. the second part depends very much -- i think anyway -- don't worry. it is a lot of money, $9 billion. if you divide it by the population, $30 per person that's a lot of money for people. for some people. to say gee you could not take it into account ever, it could be $500. it begins to look irrational. but never fear because they will take it into account when they set standards, and at that point, i read the thing about the 12%. then there is the similar source

which can refer me back, and then aside from that, and hate, here is what you do. you look at the top 12 generators and that's the minimum standard. to them, i want to say hey that's not right. i mean, it's right. it says it but if you go to the bottom 50 generators, you will see it's not going to cost hundred $20 -- $120 per family. it will cost $1000 per family. why would you even look at it. you could say it is not true. why would you even look at it. there are classes and subclasses. maybe the epa could say, don't worry -- if there is such an argument, which there isn't --

we have the power under the statute to take it into account. you know where that argument came from? from discussion and thought in my chambers. maybe it came out of the briefs too. is what i say right? can the epa take that into account, or do they have to just blindly say, if it is the top 12, that's for everybody no matter what the cause? that is the argument. mr. verrilli: i got it. i will make three points in response. the first one goes to the empirical situation, but then i will get to be theoretical question you asked. first is this. $9 billion is a big number. this is an industry with 360 billion dollars a year in annual revenues. we are talking about 2%, 2.5% of

annual revenues. justice sotomayor: not talking about profit? mr. verrilli: right, but this is the cost. the cost is about 2.5% of revenue. epa concluded that about 2% of electrical generating capacity could go off-line. so, it's not -- justice breyer: but then they take the costs into account, which is what they said they would not do. mr. verrilli: let me tell you how the epa under this regime does take costs into account. what your honor has described is an unusual one. this is what your honors have discussed in concurring opinions in entergy. it means this percentage of the industry has been able to meet this without operating an

economic matter and congress is trying to force the rest of the industry to catch up. and as we know with previous experience with catalytic converters, the cost was vastly less than the epa estimated. they have a tendency to overestimate. then to your honor's point about subcategories. section 10.12.c1. it mentions the availability of subcategories. i'm sorry, justice kennedy. it is the appendix to our brief. this is the last sentence. there is nothing in the preceding sentence that limits the authority to establish subcategories --

justice scalia: no subcategories apply to minimum standards? mr. verrilli: yes. justice scalia: i thought the standards were automatic? once they find that they should be listed, i thought there was an automatic requirements? mr. verrilli: it depends on how you categorize. if there were a situation in which one segment of the industry -- was different than another segment of the industry, then epa would have the authority to break those into two separate subcategories and you do not calculate the best performing 12%, which is what the standard is --

>> the language that does that is the first sentence of 3 which says the maximum degree that is deemed achievable. that is achieved in practice by the best controlled similar source as determined by the administrator. that is what allows them to break it into categories and apply the minimums. similar source? am i right? and -- mr. verrilli: and epa did that in this case. they looked at power plants burning natural gas and they said that is a separate subcategory. chief justice roberts: where can you point to me in the record where this argument was made by the agency? not just justice breyer's chambers. it's a very important point of administrative law at we can only consider those items addressed by the agency. it is not something i recall --

mr. verrilli: chief justice you're absolutely right in stating that principle, but our argument in this case is this question here under n1a n1a says epa shall regulate under this section if it determines regulation is appropriate and necessary and therefore when epa makes a judgment to regulate epa is triggering all of -- justice scalia: you're just saying that the argument is right. not that the agency made it. the agency must have rested its decision on the point. mr. verrilli: i think the agency on the order of being challenged here did use the approach, but beyond that, it would be one thing if this were a case in which you had a situation in

which the epa faced a situation in which 50% 75% were going to face those consequences -- justice sotomayor: can i simplify your answer for you? [laughter] mr. verrilli: that would be great. justice sotomayor: you said, we do not consider costs. we consider it rate. everyone gave a few examples. whether this example was given or not is irrelevant. the issue here is, do you have to do it? if only some of my colleagues here were concerned that when you issue standards you never consider costs. mr. verrilli: that's exactly right. the question here is whether epa had to determine a cost-benefit

analysis at listing and the logic of the statute does not -- justice kennedy: at that point the game is over. mr. verrilli: no, i don't think it is. the standard for setting emission standards, once you have decided to list, that is your honor's question -- that does take costs into account and it says that the industry -- justice scalia: i don't understand that. i thought there were automatic requirements imposed once they are listed. mr. verrilli: once epa list then the automatic that is applied has to match the .1%.

justice scalia: i really don't like that your friend on the other side was not permitted to mount an argument in opposition to this argument that justice breyer's chambers devised. this is an argument i have never heard of and i am not sure it is right. a did not expect the agency to say, oh, we are just listing, but we're going to categorize the listing. mr. verrilli: the point that we are just listing we say that over and over again in our brief. this is in page 6 on the reply brief -- of course if this is just about listing been the costs are irrelevant.

that is the way the statute works. chief justice roberts: it is a fairly dramatic disparity. you respond with a different calculation that looks -- i would call it collateral. ancillary. and then the argument -- it's not quite proper because you are using the regulation to get at the criteria that you otherwise would have to go through a much more difficult process to regulate. in other words, you cannot regulate criteria pollutants. so that's how were going to get an additional regulation of the criteria. so, it's kind of a runaround restrictions that otherwise would give you less control. mr. verrilli: let me address

that. there are seven points and i think to make all of it -- all of them to make this clear. this is an argument that i do not think any party has raised -- justice breyer: my chamber argument. [laughter] mr. verrilli: here's the problem. the problem with the argument -- there are two problems. once epa concludes that a source emits hazardous pollutants, epa has concluded that it admits mercury of levels that are unsafe. i do not think the petitioners can dispute that. the epa is under not keep -- obligation to regulate all hazardous pollutants the source emits, and in a case called national line 15 years ago -- chief justice roberts: i understand how it works. i am just questioning the legitimacy, because what they would say -- list what you want

to list, but you ought to consider only the benefits of regulating that. you should not consider -- mr. verrilli: that's the next point i would make, mr. chief justice. it is not an end run and it's not a bootstrap. it's regulating these surrogates is a well recognized methodology that goes back decades that epa has used for decades. and the very argument your honor is positing here is one that was made in the same national line case in the d.c. circuit 15 years ago that the d.c. circuit rejected. what epa is doing what the d.c. circuit said they were required to do with respect to regulating every hazardous pollutants that

the source is a myth, and what the epa has said and the d.c. circuit has said for decades -- chief justice roberts: the issue that raises the red flag at least if there is such a tiny proportion to benefit from the program in such a disproportionate amount of benefit that would normally be addressed under the criteria. so if you are regulating one that is a good thing. but if your basis of regulating -- what is the benefit from the co-pollutants that you get? mr. verrilli: many, many billions. chief justice roberts: do you remember how much? mr. verrilli: 30 billion to $90 billion. chief justice roberts: mercury is what? mr. verrilli: $4 billion. chief justice roberts: so, we

get to regulate $35 billion of cost on the other side. i understand that it's a good thing if regulation benefits in other ways, but when it is as proportionate you wonder if it is an illegitimate way of avoiding the limitations that do not apply to other criteria. mr. verrilli: i really do not think that. i do not think that is a fair way to put it. what epa did with respect to mercury was quantify one of the public health benefits. it did not quantified many of the other public health benefits. i think this is page 910 to 940. there are many, many charts. part of the reason it did not try to quantify these benefits is trying to quantify these benefits can be difficult and challenging and that is one of the key reasons why congress adopted the program and the new

source performance standard program because they did not take costs into consideration at the listing stage -- justice sotomayor: tell me about the natural gas. you were cut off earlier. mr. verrilli: sure, epa said that natural gas should be a separate category because they did not generate the public health problems -- justice sotomayor: so, they were part of the listing, but -- mr. verrilli: correct. justice sotomayor: they were part of the listing, but they were not regulated? mr. verrilli: yes, your honor. justice alito: your argument is under the last sentence, 74.1 2.c1.b, the epa can create subcategories in whole or in part based on cost.

is that correct? mr. verrilli: i think it is more subtle. it is not just that provision. there are numerous provisions within 74.12. but there is such a vast difference in the technologies that there be that vast a difference in cost, there might well be a basis to treat them as a different subcategory. justice scalia: i thought epa said we are not going to take into account cost's with regard to be listing. they could have said, we're going to take into account costs as to whether some category should be listed or not. that is not what they said. they said we shall not take into account cost with regard to listing. that is what they said. i think -- mr. verrilli: i think this is critical. what they said was with respect

to power plants, consider costs at emission standard settings and the reason we think that is appropriate is because that is the standard, that is the regulatory logic that congress feels not only appropriate, but mandatory for every other source category, so one would have to conclude then what congress said was mandatory and therefore necessarily appropriate for every other category -- justice scalia: that is not how i understood their argument. i do not understand it to say we can exempt some people from these minimum standards because we categorize them differently. it definitely was not -- mr. verrilli: i think the point of the logic is you make the listing decision and then you

regulate under section 74.12. >> as i understood it -- justice alito: without those subcategories we do not know if costs are taken into account when doing subcategories, do we? mr. verrilli: i think -- i do think -- it's going to be based on differences in technology in operation, i think, from which you might be able to defer cost but that is hypothetical in this case. it was not part of what epa had to consider except with respect to natural gas plants which were so different because they did not have the problem that justice breyer raised. you did not have that problem. you did not have to face this issue. if i can just me this point that

i think is quite critical. given 74.12's regulatory logic mission setting standard based on cost and given that that is exactly the same logic under the program, a exactly the same logic under the motor vehicle program, exactly the same logic under the resource performance standards, if congress intended to mandate that epa cut so deeply against the grain and make such a radically different approach with respect to this one category, you would expect to see very clear legislative language. you would to see a direction to epa and 74.12 two study cost before making this judgment. justice scalia: there are

economic costs. there are other costs. is it the agency's division that no cost can be taken into account? for example, they may find a particular material has an effect on health. they may find it eliminated it will have other effects that are even more deleterious to health. could that cost be taken into account? mr. verrilli: i think that cost would be taken to account in the regulatory impact analysis, but not -- chief justice roberts: thank you, general. [gavel raps] chief justice roberts: mr. smith. mr. smith: mr. chief justice, we agree that the epa was not required to engage in a cost

benefit analysis before making the decision to regulate hazardous admissions. clearly, congress did think power plants needed to be treated differently. what did they give them? they gave them three years and which the epa was instructed to take account of the health effects. it did this under an appropriate and necessary standard. if i can address the issue of what those mean in the reading, i refer the court to pages 226- 227 of the national mining association appendix. i do not think it is necessary to read from it, but what the epa has said consistently throughout this record, they looked at two things. there was a claim made that these chemicals are simply not harmful enough to require further regulation that the effects were manageable, and they looked at that issue under

the appropriateness rubric. they said, these are harmful. the necessary rubric was to look at the post clean air act, post acid rain health effects that would persist. they said, a, these are harmful chemicals, harmful pollutants and they will continue to be harmful after the acid rain program has kicked in. that is how they saw the different words -- justice scalia: who would have guessed? that is such an artificial division of necessary and appropriate. i did not really understand it. mr. smith: necessary means there will still be health problems after the acid rain program kicks in. justice scalia: appropriate means?

mr. smith: appropriate was meant to meet the claims by the industry that these chemicals are sufficiently harm free that we do not need to regulate -- justice scalia: wasn't that part of the first one? mr. smith: it could have been. justice scalia: ic, your honor. mr. smith: the issues that were supposed to control the listing decision were the health effects of the pollutants that come out of east power plants, and they deferred the issue of considering the cost to the second stage, just as occurs with every other source of the other 89 hazardous pollutants they were dealing with. if i can pause to clarify one thing that happened at the listing stage. natural gas fired plants were not turned into a category. they looked at the health effects and said, we are exempting them entirely from regulation under this section

under the appropriate and necessary standard because they do not him if these chemicals in more than trace amounts and there's nothing for us to regulate. natural gas plants get taken out at the listing stage. then we have coal-fired plants where they begin to look at the subsection d standards standards designed by congress to limit the omission regulation. because the floors are in fact limited to what has been achieved by comparable plants in the same category. there were questions about whether this category was something that epa recognized. they did create a separate category for coal burning plants that burn lignite. but it turned out that none of the lignite plans -- plants

[indiscernible] look at the issue of categorization. they started out with two coal-fired, they ended up with one category and then there were five separate categories depending on what they burn and how they operate, so this whole process of separating out these categories was built into that process under subsection -- justice kagan: could you clarify for me the categorization happens after the listing? is that correct? mr. smith: yes, your honor. then you go to the standards of what commission sources occur sometimes years after the listing decision is made. they then have a process of saying what are our categories going to be? what in fact are the omissions?

they have to report them. justice scalia: are these just requirements above the minimums? mr. smith: no, your honor. they are -- justice scalia: i'm saying the categorization that allows you to reduce some people and not to reduce others. that applies to the requirements above the minimums now. mr. smith: your honor, the minimums are set by mathematical calculation above the categories area -- categories. justice scalia: yes. mr. smith: the only thing not using express consideration of cost but based on regulations of what the top 12% are doing is the minimum and the minimums are altered depending on the categories established.

that is the way all of the sources have been regulated. justice kagan: could you clarify that? mr. smith, you categorize this way, and then you're down here. you categorize another way and then you're down here. that makes a tremendous difference in what the minimums are. mr. smith: right, and they put out a notice. they then get comments in, and then they make different categories in the final rule -- justice alito: how can we take into account what the costs are without creating criteria for these subcategories? mr. smith: your honor, the that is -- justice alito: the 12% come into play after you created the categories. had i know how they create the subcategories? mr. smith: it is in the notice of proposed rulemaking.

here are the proposed categories. then they get comments about how we are not -- what happens then, people and comment say, we are so different from that category. we have special problems. we need a separate category. justice kagan: it is a rulemaking after the listing, is that right? mr. smith: they balance it all at the same time but only because they have 11-year delay. justice breyer: this was not taken up in my chambers. [laughter] the brief said congress -- unambiguously required epa to consider cost of the second stage of the regulatory process. i read the statute. in reading the statute leads me to think it works along the lines you just said. if you did have the most

expensive set of generators in the world, you would ask epa to create a separate category for them, in which case the top 12% would no longer be in your category and you would not have to do it. what i am asking you is, the sg thinks that is the system. is there a treatise? is there an explanation epa has put out so it is clear it was not made up, it is clear this is the system that they follow? would you refer me to a source? mr. smith: your honor, the only source i could refer you to is the notice of proposed rulemaking in the final role in which all of this categorization process is laid out in exquisite detail. you can see the comments that come in that sake these categories to not work. then they produce different categories. justice breyer: excuse me -- chief justice roberts: excuse

me, is there something in the administrative record where epa adopts that? if someone says, you're not considering cost? we're going to the supreme court. the epa says, we will consider cost. is there a reference to the administrative record where there is something like that? mr. smith: they said in the notice of proposed rulemaking that we interpret the regulations to be only based on health -- chief justice roberts: the listing decision is not based on cost. i want to know if there's anything that says, but don't worry we will consider cost through the categorization process. mr. smith: i do not know if they said that explicitly. it was so implicit in the system. this has been in operation since 1990 area -- 1990. chief justice roberts: implicit does not work when you're talking about categories in the administrative record. justice kennedy: i thought you

did not need to consider cost of the first step? mr. smith: no, the categories are at the first step. it is at the second step -- justice kennedy: but you did not take that second step? mr. smith: they did. that was done through a notice and comment process -- justice kennedy: are you saying that was done based on cost? mr. smith: what was feasible with the different technologies. justice scalia: how much money did that save? did we know how much would be reduced by that calculation? mr. smith: i do not have that calculus. it is important to recognize something like 90% -- 90% of the capital cost has now already been spent. industry has not experienced the

upheavals that are being described. the idea that the result was somehow ludicrous or outlandishly expensive is belied by the fact that the industry is -- justice scalia: nobody is going to jail. is that it? it had to be done. mr. smith: the $4.6 million benefit as being a comparator is wrong on so many levels. that was one single -- justice scalia: a nine million dollar justice kennedy: -- a $9 million recurring -- mr. smith: most of these were capital expenditures that of already been made, and all he briefs, the petitioners. something like 40% of operating costs and 60% are advertised costs, your honor.

the industry has been able to do this and the situation now is we finally have national standards. the states have been regulating very strenuously. they will not have money flowing across state lines. they have this highly competitive electricity market where some companies have costs that reflect these appliances and some don't and that is something that really needs to be soft -- justice sotomayor: if i may finish your point, the $4 billion they are referring to for mercury, the agency did not quantify all of the other costs correct? mr. smith: absolutely. it did not quantify many, if not all of the cost for mercury because it creates attention deficit disorder olive these other things -- party vascular problems. -- cardiovascular problems. it's extremely poisonous. the other thing about the $30 billion to 90 billion dollars

that is particulate reduction and some of the particulate produced is non-mercury metals that go out and particles mercury sometimes goes out in the form of particles the acid gases that turn into particles because they become aerosolized and they become tiny droplets. all of those are in fact being taken care of in the control of particulates. it is true in controlling those you use the sync technology and you end up controlling a lot of other kinds of particulate it -- primarily sulfur dioxide which costs premature deaths. we did the calculation and we decided if we put these particulates in these, that saves a lot of lives because these sulfur tax side is not being controlled. justice alito: is this a basis

of the epa's position. i thought the epa position was it does not matter how much the costs exceed the benefits. we just will not take costs into account at the listing stage. 3 that is -- mr. smith: that is correct, your honor. that is there quite reasonable interpretation of the statute which every other source has conceded. we do not do the cost benefit analysis upfront and this came out of a time of regulatory paralysis for 20 years where the epa was just not regulating effectively in congress came in and said we're going to force regulation of these chemicals that are being spewed into the environment and causing all of these health effects. it gave one benefit to the power plant industry and said you have three years. they gave them -- it did not give them a benefit of doing the cost-benefit analysis

upfront to say we do not think we should regulate this category. chief justice roberts: thank you, mr. smith. >> thank you mr. chief justice. any sub categorization where talking about has already occurred. we are talking about a role that has been promulgated. there are still -- justice sotomayor or: that was not the question presented. the question presented is if that makes any emotion standards wrong, for some people, it is not that breaking to do it? mr. lindstrom: the question is -- justice sotomayor: it does say. mr. lindstrom: what happens is

you have a listing decision at the first stage and then you have the4 standard -- justice sotomayor: you're taking out the categorizations. they do not establish the floor so they have categorized. mr. lindstrom: correct. my point is what happens under n1 these first two steps are merged. you are looking not at the list but whether such regulation is appropriate and necessary. that is the language in the statute. is such regulation appropriate and necessary? not just if it is going to be listed. if it is going to happen. they made this at the same time. they publish the standards. they were looking at the costs ahead -- justice scalia: are you saying that they purported to make the categorization decision without taking into account cost? mr. lindstrom: yes, any

categorization they have done has been done and they did not consider cost. justice scalia: did not consider cost. mr. lindstrom: this turns on what the agency actually did below. they have made determinations. they said costs are not relevant. they ignored an part of the regulatory problem -- justice sotomayor: i'm sorry, the proposed categories and they have the opportunity to say it was the wrong category, correct question mark -- correct? mr. lindstrom: yes, your honor. justice sotomayor: and some people submitted costs relative to their technology in their kinds of plants. mr. lindstrom: yes, your honor. justice sotomayor: so, it is not true. they propose, but everyone gets a chance to tell them this technology is different from the others or this kind of plant is different from the others and this has costs that are much greater. mr. lindstrom: i am saying they

have passed to that phase. any categorization they were going to do is done. justice sotomayor: you are saying that it is passed because the final rule has been issued. mr. lindstrom: correct. justice sotomayor: i am talking about during the rulemaking process. the rulemaking process does allow the agency to consider the cost of technology. mr. lindstrom: they have adopted the exact opposite position -- justice breyer: the lignite people -- i cannot remember if that is the right name. they said, we produce our stuff that is much more expensive, so please do not put us in the same category. and the agency said, right, separate. did that happen? mr. lindstrom: yes, sir. justice breyer: all right, how

to we do that without considering cost? those people said our cost her more expensive. mr. lindstrom: i do not know how they did it, but they said throughout we are not considering cost. thank you, your honor. > the court today ruled by the weapon for that the epa must consider cost before deciding whether regulation is appropriate and necessary. over the next couple hours, we will continue with what happened at the supreme court. this is the last day of the term. in the next case the justices vision will allow oklahoma to continue to use the drug and its lethal injection protocol and later, a ruling that says arizona can use a commission to dropped federal congressional districts. -- draft federal congressional districts. usa today writes a fiercely divided supreme court