(Adds details, regulatory context)
By Lawrence Hurley
WASHINGTON, April 29 (Reuters) - The U.S. Supreme Court handed President Barack Obama a victory on Tuesday by upholding a federal environmental regulation requiring some states to limit pollution that contributes to unhealthy air in neighboring states.
By a 6-2 vote, the court said the U.S. Environmental Protection Agency acted reasonably in requiring 28 states to reduce emissions from coal-fired power plants of sulfur dioxide and nitrogen oxides, which can lead to soot and smog.
Writing for the majority, Justice Ruth Bader Ginsburg called the EPA rule a cost-effective way to allocate responsibility for emission reductions among upwind states, and that the EPA need not consider each state's proportionate responsibility for the emissions in question.
The regulation in question is viewed by industry and conservative critics in Congress as part of what they call the Obama administration's "war on coal" because of the pollution controls it imposes primarily on coal plants.
The U.S. Court of Appeals for the District of Columbia Circuit threw out the regulation in an August 2012 ruling. The Obama administration appealed, prompting Tuesday's ruling that reversed the lower court decision. Some related litigation on the EPA rule is still pending in the appeals court and will now move forward.
The rule does not address greenhouse gases, which are the subject of the administration's separate effort to address climate change. Nevertheless, the additional financial burdens on aging coal plants, which are the biggest source of carbon dioxide, could put pressure on some facilities to shut down earlier than planned, legal experts say.
"Today's decision appears to sanction EPA's subversion of the primary responsibility Congress delegated to the states under the Clean Air Act," said Hal Quinn, president of the National Mining Association, one of the groups that challenged the regulation.
A spokesman for Republican Texas Attorney General Greg Abbott, who also challenged the rule, said the regulation is a "job-killer in Texas."
Several major utilities and coal firms, including Southern Company and Peabody Energy, were represented in the litigation by the Utility Air Regulatory Group, an umbrella organization.
The impact of Tuesday's ruling could be somewhat limited by the fact the EPA has since issued a separate regulation aimed at curbing emissions of mercury and other hazardous pollutants from coal plants. Experts say it is likely to have a bigger role than the rule upheld on Tuesday in encouraging utilities to close older plants. A federal appeals court in Washington upheld the regulation in a ruling earlier this month. [ID: nL2N0N70T9]
Ginsburg and the high court's other liberal justices were joined in the majority by Chief Justice John Roberts and Justice Anthony Kennedy, both Republican appointees. Justice Samuel Alito, another Republican appointee, recused himself from the case for undisclosed reasons.
Ginsburg called the rule a "permissible, workable, and equitable interpretation" of the "good neighbor" provision of the federal Clean Air Act.
This provision limits cross-border emissions that make it harder for downwind states to comply with federal air quality standards, or national ambient air quality standards (NAAQS).
Ginsburg said the agency "must have leeway in fulfilling its statutory mandate."
Justice Antonin Scalia dissented, joined by Justice Clarence Thomas. Both are conservative appointees of Republican presidents.
Scalia took the relatively unusual step of reading a lengthy summary of his strongly worded opinion in the courtroom. He said the majority effectively rewrote the Clean Air Act provision. He called it a "Look Ma, no hands!" approach.
"Today's decision feeds the uncontrolled growth of the administrative state at the expense of government by the people," Scalia said in his remarks from the bench.
EPA Administrator Gina McCarthy said the Supreme Court win validated the agency's broader efforts to protect public health.
"Today's Supreme Court decision is a resounding victory for public health and a key component of EPA's efforts to make sure all Americans have clean air to breathe," McCarthy said in a statement.
The Supreme Court has yet to issue a ruling on a second challenge to EPA rulemaking. In that case, the court is weighing one part of the agency's first wave of regulations aimed at curbing greenhouse gas emissions that contribute to climate change.
The two consolidated cases are EPA v. EME Homer City Generation and American Lung Association v. EME Homer City Generation, U.S. Supreme Court, 12-1182 and 11-1183. (Reporting by Lawrence Hurley; Additional reporting by Valerie Volcovici, Jonathan Stempel and Roberta Rampton; Editing by Howard Goller, Grant McCool and Gunna Dickson)
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