U.S. appeals court upholds bulk of Obama air pollution rule

By Lawrence Hurley WASHINGTON (Reuters) - A U.S. appeals court on Tuesday mostly upheld a major federal environmental regulation requiring some states to limit pollution that contributes to unhealthy air in neighboring states. The U.S. Court of appeals for the District of Columbia Circuit rejected several broad challenges to the regulation. But in a partial loss for the government, the court said the U.S. Environmental Protection Agency will have to reconsider the 2014 emissions budgets it set for various states for sulfur dioxide and nitrogen oxide emissions. The court said the rule could remain intact while the government revises the emissions budgets. Among the challengers were coal company Peabody Energy Corp and energy company American Electric Power Company Inc. The case was before the appeals court for a second time after an April 2014 U.S. Supreme Court decision in which the justices, on a 6-2 vote, upheld the regulation. 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 appeals court had previously thrown out the rule in an August 2012 decision, prompting the Obama administration to seek high court review. The second round of litigation was on separate challenges to the regulation.