(Rewrites throughout with details from decision and the dissent)
By Lawrence Hurley
WASHINGTON, April 29 (Reuters) - The U.S. Supreme Court on Tuesday upheld a major federal regulation requiring some states to limit pollution that contributes to unhealthy air in neighboring states, reversing a lower court ruling and handing a victory to President Barack Obama.
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 so-called upwind states, and that the EPA need not consider each state's proportionate responsibility for the emissions in question.
She also called the rule a "permissible, workable, and equitable interpretation" of the "good neighbor" provision of the 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).
"The Good Neighbor Provision requires EPA to seek downwind attainment of NAAQS notwithstanding the uncertainties," Ginsburg wrote. "Required to balance the possibilities of under-control and over-control, EPA 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 said the majority effectively rewrote the good neighbor provision by filling in a "gap" in the law without support from the text, calling it a "Look Ma, no hands!" approach. He also said the decision deprived states of the opportunity to adopt their own plans to reduce pollution.
Lawyers involved in the case did not immediately respond to requests for comment.
Chief Justice John Roberts, as well as Justices Anthony Kennedy, Stephen Breyer, Sonia Sotomayor and Elena Kagan joined the majority opinion. The ninth justice, Samuel Alito, recused himself from the case for undisclosed reasons.
In striking down the EPA rule in August 2012, the U.S. Court of Appeals for the District of Columbia Circuit said the agency had exceeded its authority in setting targets for states, and could not act until states had received notice of how much pollution they were emitting.
The Obama administration appealed, and Tuesday's Supreme Court decision reversed the circuit court ruling.
Opponents to the rule included Entergy Corp, Energy Future Holdings Corp's Luminant Holding Co, and the United Mine Workers of America, among others.
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 Jonathan Stempel; Editing by Howard Goller and Grant McCool)