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 wit

mr. verrilli: mr. chief justice with all due respect, i think on this question that you're asking me, this is a place where the court should accord deference to the judgments of the executive branch and the state department, in particular. if the state department had thought, if the executive had thought that it could solve the diplomatic problem by minimizing the effect of this provision pretending as though it wasn't going to have this effect, certainly they would have followed that course. >> not necessarily. justice sotomayor: not -- justice sotomayor: what they're asking you to do is to look they're asking the government to lie. i'm not that's exactly what you're saying the government should the executive department should not do. mr. verrilli: i do think the problem here is that the executive made a considered judgment in 2002 that this couldn't sensibly be handled that way. that's -- >> so how are we -- mr. verrilli: what if it just says "disputed," parentheses after it, "disputed"? then i gathe

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. ve

mr. general verrilli, let me ask you this about notice. we get lots and lots of amicus briefs from states. and we got two amicus briefs from states here. 34 states, i think, is -- that's the number of states that declined to or failed to establish a state exchange? >> correct. >> now, if they were all caught off guard and they were upset about this, you would expect them to file an amicus brief telling us that. but actually, of the 34, only 6 of them signed the brief that was submitted by a number of states making that argument. 23 states, 23 jurisdictions submitted that brief. 17 of them are states that established state exchanges. only 6 of the states that didn't establish state exchanges signed that brief, how do you account for that? >> so, i guess i'd make two points about that, justice alito. first, you've got states there, states in both camps, all of whom told you that they didn't understand the statute that way. now, with respect to the other 8 states that filed the amicus brief on the other side, i actually think there's quite an

mr. -- general verrilli, we get a lot of amicus briefs from the states and we got two amica briefs from states. 34, i think are the number of states that declined or failed to establish a state exchange? >> correct. >> now if they were all caught off guard and they were upset about this you would expect them to file an amicus brief telling us that. but of the 34, only six of them signed the brief submitted by a number of states making that argument. 23 states, 23 jurisdictions submitted that brief. 17 of them are states that established state exchanges. only six states that didn't establish state exchanges signed the brief. how do you account for that. >> first, you have two 22 states in both camps, allm whom told you they didn't understand the statute that way. and as to the other states there is a quite important point that goes to their understanding. remember this is an irs rule we are talking about and irs put out a notice of proposed rule making and saying this is what we intend to do and several of the states oklahoma indiana and nebraska filed rule making comments in the proceed

mr. general verrilli, let me ask you this about notice. we get lots and lots of amicus briefs from states. and we got two amicus briefs from states here. 34 states, i think, is -- that's the number of states that declined to or failed to establish a state exchange? >> correct. >> now, if they were all caught off guard and they were upset about this, you would expect them to file an amicus brief telling us that. but actually, of the 34, only 6 of them signed the brief that was submitted by a number of states making that argument. 23 states, 23 jurisdictions submitted that brief. 17 of them are states that established state exchanges. only 6 of the states that didn't establish state exchanges signed that brief, how do you account for that? >> so, i guess i'd make two points about that, justice alito. first, you've got states there states in both camps, all of whom told you that they didn't understand the statute that way. now, with respect to the other 8 states that filed the amicus brief on the other side, i actually think there's quite an

. >> general verrilli, you'll have an extra ten minutes as well. >> thank you, mr. chief justice. standing has been raised so let me start by telling you where we stand on standing and then i'd appreciate the opportunity to summarize what i think are the two key points in this case. with respect to standing, the question turns on whether any of the four petitioners are liable for the tax penalty for 2014. now, this case was litigated in the district court in 2013 based on projections on the part of each of the four petitioners that they would earn a certain income in 2014. they filed declarations saying that. with respect to two of the four the projections of their income were such that they would qualify for the unaffordable exemption and not have standing. with the other two, they wouldn't qualify for the unaffordability exception and they would have standing. but those were projections in 2013 about their income in 2014. 2014 has now come and gone and we know -- we don't know but the petitioners know whether any of the four have, in fact -- are in fact liable for the tax penalt