Factbox: Questions remain on U.S. mercury rule after high court ruling

By Valerie Volcovici WASHINGTON (Reuters) - The U.S. Supreme Court said on Monday that the Environmental Protection Agency should have weighed the potential financial costs of compliance before imposing limits on emissions of mercury and other toxins from coal-fired power plants. But the regulations have actually been in effect since April and are still the law while the EPA pursues attempts to redo its cost estimates for the lower court, so some uncertainty remains. The following is a Q&A on some main issues: - How bad a blow was the ruling for the mercury rule? The EPA and some academics said the outcome was not their worst case scenario. "Nobody likes to lose but it could have been much worse," said Jody Freeman, a law professor at Harvard University, noting that the Court left the rule in place while the agency prepares its economic analysis. Richard Revesz, director of the Institute for Policy Integrity and dean emeritus of NYU Law School, said the court did not dispute the EPA argument that there are direct and ancillary benefits of the mercury restrictions, which the EPA said in projections after it issued its rule. It estimated monetized benefits of between $27 billion and $80 billion per year, he said. “The most important part of the majority opinion is Justice (Antonin) Scalia’s acknowledgement that the agency is not precluded from taking co-benefits into account in its cost-benefit analysis of the rule,” said Revesz. But Debra Jezouit, a lawyer representing industry with Baker Botts, said supporters of the EPA should not automatically assume it will be a "quick fix" when the lower court, the DC Circuit, picks up the case again. "Petitioners would argue to the court that the EPA has to re-do the entire cost-benefit analysis," she said. - Should the EPA be worried that the Court did not defer to the agency’s expertise as it has in the past? The Supreme Court has typically deferred to a governing agency when interpreting laws. But some legal experts said Monday's ruling breaks with that principle. "In terms of deference to agencies, this is a big blow for EPA and for the federal executive generally," said Thomas Lorenzen, a partner with Crowell & Moring, and former environmental lawyer for the Department of Justice, referring to what is known as "Chevron deference." But Ann Weeks, an attorney for the Clean Air Task Force which supported the EPA in the lawsuit, said the justices were merely saying that agencies do not have "unbounded" authority to make decisions. "I don’t think this is a huge watershed moment in how agency should think about costs in its review," she said. - Will the mercury ruling affect the administration's plans to restrict carbon emissions from power plants under the Clean Power Plan later this summer? Environmental advocates were quick to point out that the Mercury and Air Toxics rule and the agency's Clean Power Plan are based on separate sections of the Clean Air Act: the mercury rule is based on section 112 while the Clean Power Plan is based around section 111d of the Clean Air Act. "The only connection to the Clean Power Plan is the fact that our nation’s fleet of coal-fired power plants is the single largest source of toxic mercury pollution and health-harming carbon pollution," said Vickie Patton, general counsel for the Environmental Defense Fund. But industry lawyers said Monday's ruling is a sign that the high court is deeply skeptical about the EPA's interpretations of the Clean Air Act's ambiguous language to impose sweeping regulations. "There are five members of Supreme Court who are willing to hold EPA’s feet to fire in its interpretation of statutes," said Jonathan Martel, an attorney with Arnold & Porter. "They seem suspicious of EPA’s result-oriented policy conclusions and then stretching the statute to accommodate those conclusions," Martel said. “The atmospherics do matter. You hear the Court’s skepticism clear concern about EPA’s motives coming through.” (Reporting By Valerie Volcovici; Editing by Bruce Wallace and Grant McCool)