Environmental Law After Sebelius: Will the Court’s New Spending Power Limits Affect Environmental State-Federal Partnerships?

This issue brief, invited by the American Constitution Society, analyzes the regulatory impacts of the new spending power doctrine in the Supreme Court’s 2012 health reform decision, National Federation of Independent Business v. Sebelius. In Sebelius, a plurality of the Supreme Court held that portions of the Affordable Care Act exceeded federal authority under the Spending Clause. With that holding, Sebelius became the first Supreme Court decision since the New Deal to limit an act of Congress on spending power grounds, rounding out the “New Federalism” limits on federal power first initiated by the Rehnquist Court in the 1990s. The new Sebelius doctrine constrains the federal spending power in contexts involving changes to ongoing intergovernmental partnerships with very large federal grants. However, the decision gives little direction for evaluating when the amount of change or funding reaches the threshold of spending power coercion. Sebelius thus leaves open important unanswered questions about the contours of the new limit and how it will impact intergovernmental bargaining. This issue brief analyzes the new spending power doctrine and its impact on spending power-based programs of cooperative federalism in environmental law, with special attention to the Clean Air Act