Petition for Writ of Certiorari — Valero Energy Corporation, et al., Petitioners v. Environmental Protection Agency
Supreme Court briefDec 30, 2019
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No. 19-_____
IN THE
Supreme Court of the United States
VALERO ENERGY CORPORATION AND
AMERICAN FUEL & PETROCHEMICAL MANUFACTURERS,
Petitioners,
v.
ENVIRONMENTAL PROTECTION AGENCY,
Respondent.
On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the District of Columbia Circuit
PETITION FOR A WRIT OF CERTIORARI
VOLUME I OF II
CLARA M. POFFENBERGER
CLARA POFFENBERGER
ENVIRONMENTAL LAW
AND POLICY, LLC
2933 Fairhill Road
Fairfax, Virginia 22031
(703) 231-5251
EVAN A. YOUNG
Counsel of Record
ELLEN SPRINGER
JOSHUA MORROW
BAKER BOTTS L.L.P.
98 San Jacinto Boulevard
Suite 1500
Austin, Texas 78701
(512) 322-2506
evan.young@bakerbotts.com
Counsel for Petitioner Valero Energy Corporation
(additional counsel on inside front cover)
WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – W ASHINGTON, D.C. 20002
SAMARA L. KLINE
BAKER BOTTS L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6825
MEGAN H. BERGE
BAKER BOTTS L.L.P.
The Warner
1299 Pennsylvania Ave. N.W.
Washington, D.C. 20004
(202) 639-1308
BRITTANY M. PEMBERTON
BRACEWELL LLP
2001 M Street N.W.
Suite 900
Washington, D.C. 20036
(202) 828-1708
Counsel for Petitioner
Valero Energy Corporation
RICHARD MOSKOWITZ
AMERICAN FUEL &
PETROCHEMICAL
MANUFACTURERS
1800 M Street N.W.
Suite 900 North
Washington, D.C. 20036
(202) 457-0480
Counsel for Petitioner
American Fuel &
Petrochemical Manufacturers
QUESTIONS PRESENTED
The Clean Air Act’s Renewable Fuel Standard program requires EPA to undertake annual notice-and-comment rulemaking to determine a “renewable fuel obligation” for the nation’s transportation-fuel supply. The first
of three annual “[r]equired elements” is to determine the
point of obligation—i.e., to ensure that the obligation
“shall be applicable to refineries, blenders, and importers,
as appropriate.” 42 U.S.C. §7545(o)(3)(B)(ii)(I). EPA admits that it initially placed the point of obligation on refineries and importers, but not blenders, for reasons of administrative convenience. EPA has repeatedly refused to
reexamine that placement in annual rulemaking, and it denied petitions for rulemaking seeking reconsideration outside the statutorily-mandated annual assessment.
The questions presented are:
1. Whether the requirement that EPA “shall” make a
“calendar year” determination of the “appropriate” point
of obligation requires EPA to consider in each annual rule
whether the point of obligation remains appropriate.
2. Whether EPA can evade the annual duty by partitioning the point of obligation into a one-time collateral
proceeding that ignores key evidence, relies primarily on
the agency’s own convenience, and claims more deference
from a reviewing court than an annual rule would receive.
(i)
PARTIES TO THE PROCEEDINGS BELOW
This petition addresses three cases decided in the U.S.
Court of Appeals for the District of Columbia Circuit:
• Alon Refining Krotz Springs, Inc. v. EPA (No. 161052) (“Alon”);
• Coffeyville Resources Refining & Marketing LLC
v. EPA (No. 17-1044) (“Coffeyville”); and
• American Fuel & Petrochemical Manufacturers v.
EPA (No. 17-1258) (“AFPM”).
The same three-judge panel heard argument in Alon and
Coffeyville together, and its opinion and judgment cover
both cases. In all three cases, the D.C. Circuit received
and consolidated multiple petitions for review.
Petitioners Valero Energy Corporation (“Valero”) and
American Fuel & Petrochemical Manufacturers (“AFPM”)
were petitioners in all three cases. Valero was the petitioner in Nos. 16-1055 and 17-1259 (Alon), 17-1047 (Coffeyville), and 18-1027 (AFPM). AFPM was the petitioner in
No. 18-1029 (Alon) and was the petitioner and intervenor
in Nos. 17-1051 (Coffeyville) and 17-1258 (AFPM).
Respondent EPA was the respondent in all three cases
below.
In addition, the following were parties to proceedings
in the court of appeals but are not parties to this petition:
• Alon Refining Krotz Springs, Inc.
• American Petroleum Instituted
• American Refining Group, Inc.
• Biotechnology Innovation Organizatione
• Calumet Specialty Products Partners, L.P.
• Coffeyville Resources Refining & Marketing, LLC
• Ergon Refining, Inc.
• Ergon-West Virginia, Inc.
• Growth Energyd
(ii)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
iii
Gulf Restoration Networkc
Hunt Refining Company
Lion Oil Company
Monroe Energy, LLCb
National Biodiesel Boardg
Warren R. Neufelda
Philadelphia Energy Solutions Refining & Marketing LLCa
Placid Refining Company, LLC
Renewable Fuels Associationf
Sierra Clubc
Small Retailers Coalitionf
U.S. Oil & Refining Company
Wynnewood Refining Company, LLC
Wyoming Refining Company
(a) refers to petitioners in only Alon
(b) refers to a petitioner in only Coffeyville who was also
an intervenor in Alon
(c) refers to petitioners in only AFPM
(d) refers to intervenors in all three cases
(e) refers to an intervenor in only Coffeyville
(f) refers to intervenors in only AFPM
(g) refers to a petitioner in both Coffeyville and AFPM,
who was also an intervenor in AFPM
Parties not otherwise designated were petitioners in
Alon and were petitioners and intervenors in Coffeyville.
STATEMENT OF RELATED PROCEEDINGS
This petition addresses three cases, each of which the
D.C. Circuit decided as a consolidated case. The cases that
the D.C. Circuit consolidated, but which are not at issue in
this petition, are listed below, with their D.C. Circuit
docket numbers.
In Alon and Coffeyville, the D.C. Circuit entered a single judgment on August 30, 2019 that decided:
• Valero Energy Corporation v. EPA, No. 16-1055;
• Neufeld v. EPA, No. 17-1255;
• Valero Energy Corporation v. EPA, No. 17-1259;
• Alon Refining Krotz Springs, Inc. v. EPA, No. 181021;
• Coffeyville Resources Refining & Marketing, LLC
v. EPA, No. 18-1024;
• Philadelphia Energy Solutions Refining & Marketing LLC v. EPA, No. 18-1025;
• American Fuel & Petrochemical Manufacturers v.
EPA, No. 18-1029;
• Alon Refining Krotz Springs, Inc. v. EPA, No. 171045;
• Valero Energy Corporation v. EPA, No. 17-1047;
• Monroe Energy, LLC v. EPA, No. 17-1049;
• American Fuel & Petrochemical Manufacturers v.
EPA, No. 17-1051; and
• National Biodiesel Board v. EPA, No. 17-1052.
In AFPM, the D.C. Circuit entered a judgment on September 6, 2019 that decided:
• Valero Energy Corporation v. EPA, No. 18-1027;
• Sierra Club and Gulf Restoration Network v. EPA,
No. 18-1040; and
• National Biodiesel Board v. EPA, No. 18-1041.
The cases listed above are those directly related to this
case within the meaning of this Court’s Rule 14.1(b)(iii).
(iv)
CORPORATE DISCLOSURE STATEMENT
Pursuant to this Court’s Rule 29.6, petitioner Valero
Energy Corporation states that it has no parent corporation and that no publicly held company owns a 10% or
greater interest in its stock. Petitioner American Fuel &
Petrochemical Manufacturers is a national trade association that has no parent corporation and in which no publicly held company has a 10% or greater ownership interest.
(v)
TABLE OF CONTENTS
Questions Presented ............................................................. i
Parties to the Proceedings Below ....................................... ii
Statement of Related Proceedings .................................... iv
Corporate Disclosure Statement ........................................ v
Table of Authorities ............................................................. x
Opinions Below ..................................................................... 1
Jurisdiction............................................................................ 1
Statutory Provisions Involved ............................................ 2
Preliminary Statement ........................................................ 3
Statement .............................................................................. 5
I.
II.
Background ............................................................ 5
A.
The RFS program ........................................ 5
B.
The point of obligation ................................. 6
Proceedings Below ................................................ 9
A.
The 2017 Rule (Coffeyville) ......................... 9
B.
The collateral proceeding (Alon) .............. 11
C.
The 2018 Rule (AFPM) ............................. 12
Reasons for Granting the Petition.................................... 13
I.
The D.C. Circuit wrongly deferred to
EPA’s evasion of the annual duty that
the Act clearly imposes ....................................... 13
A.
The Act requires annual
consideration ............................................... 15
(vi)
1.
B.
II.
vii
The Act’s text requires annual
consideration of whether the
point of obligation is
“appropriate” ..................................... 15
2.
EPA’s construction
unreasonably allows it to avoid
considering whether the point
of obligation is frustrating
the program’s goals........................... 20
3.
EPA’s decision to treat relevant
comments as “beyond the scope”
of rulemaking was arbitrary and
capricious ........................................... 22
The D.C. Circuit’s deference to
EPA’s faulty collateral proceeding
was improper and threatens other
programs ..................................................... 25
1.
The D.C. Circuit wrongly
deferred to EPA’s decision to
conduct a collateral proceeding ....... 25
2.
EPA’s decision in the collateral
proceeding does not deserve
deference ............................................ 27
3.
The opinions below threaten
other programs that rely on
statutorily mandated procedural
requirements ..................................... 32
This case presents an ideal vehicle .................... 33
Conclusion ........................................................................... 34
viii
VOLUME I:
Appendix A – Opinion of the D.C. Circuit
(August 30, 2019) ................................................................ 1a
Appendix B – Opinion of the D.C. Circuit
(September 6, 2019) .......................................................... 91a
Appendix C – Statutory Provisions Involved .............. 156a
VOLUME II:
Appendix D – U.S. Environmental Protection
Agency, Renewable Fuel Standard Program Standards for 2017 and Biomass-Based Diesel
Volume for 2018: Response to Comments, EPA420-R-16-019 (November 2016) ..................................... 187a
Appendix E – U.S. Environmental Protection
Agency, Renewable Fuel Standard Program:
Standards for 2017 and Biomass-Based Diesel
Volume for 2018, 81 Fed. Reg. 89,746
(December 12, 2016) (“2017 Rule”) ............................... 189a
Appendix F – U.S. Environmental Protection
Agency, Denial of Petitions for Rulemaking to
Change the RFS Point of Obligation,
EPA-420-R-17-008 (November 2017) ........................... 356a
Appendix G – U.S. Environmental Protection
Agency, Notice of Denial of Petitions for Rulemaking to Change the RFS Point of Obligation,
82 Fed. Reg. 56,779 (November 30, 2017) .................... 531a
Appendix H – U.S. Environmental Protection
Agency, Renewable Fuel Standard Program:
Standards for 2018 and Biomass-Based Diesel
Volume for 2019 (Proposed Rule), 82 Fed. Reg.
34,206 (July 21, 2017) ..................................................... 538a
ix
Appendix I – U.S. Environmental Protection
Agency, Renewable Fuel Standard Program:
Standards for 2018 and Biomass-Based Diesel
Volume for 2019; Availability of Supplemental
Information and Request for Further Comment,
82 Fed. Reg. 46,174 (October 4, 2017) .......................... 541a
Appendix J – U.S. Environmental Protection
Agency, Renewable Fuel Standard Program Standards for 2018 and Biomass-Based Diesel
Volume for 2019: Response to Comments,
EPA-420-R-17-007 (December 2017) ........................... 550a
Appendix K – U.S. Environmental Protection
Agency, Renewable Fuel Standard Program:
Standards for 2018 and Biomass-Based Diesel
Volume for 2019, 82 Fed. Reg. 58,486
(December 12, 2017) (“2018 Rule”) ............................... 552a
TABLE OF AUTHORITIES
Page(s)
CASES
American Petroleum Institute v. EPA,
706 F.3d 474 (D.C. Cir. 2013) .....................................5, 8
Americans for Clean Energy v. EPA,
864 F.3d 691 (D.C. Cir. 2017) ............................. 7, 23, 31
Athens Community Hospital, Inc. v. Shalala,
21 F.3d 1176 (D.C. Cir. 1994) ...................................... 28
Bennett v. Spear,
520 U.S. 154 (1997) ....................................................... 16
Encino Motorcars, LLC v. Navarro,
136 S.Ct. 2117 (2016) .................................................... 23
Environmental Defense Fund v. Thomas,
870 F.2d 892 (2d Cir. 1989) .......................................... 16
Ergon-West Virginia, Inc. v. EPA,
896 F.3d 600 (4th Cir. 2018) ......................................5, 31
FCC v. Fox Television Stations, Inc.,
556 U.S. 502 (2009) ....................................................... 24
FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120 (2000) ....................................................... 18
Grocery Manufacturers Ass’n v. EPA,
693 F.3d 169 (D.C. Cir. 2012) ........................................ 6
Henson v. Santander Consumer USA Inc.,
137 S.Ct. 1718 (2017) .................................................... 16
IBP, Inc. v. Alvarez,
546 U.S. 21 (2005) ......................................................... 16
In re Pesticide Action Network North America,
798 F.3d 809 (9th Cir. 2015) ......................................... 27
(x)
xi
Judulang v. Holder,
565 U.S. 42 (2011) ......................................................... 22
Kennecott Copper Corp., Nevada Mines Division,
McGill, Nevada v. Costle,
572 F.2d 1349 (9th Cir. 1978) ....................................... 18
Kisor v. Wilkie,
139 S.Ct. 2400 (2019) ...............................................11, 18
Leather Industries of America, Inc. v. EPA,
40 F.3d 392 (D.C. Cir. 1994) ........................................ 29
Lion Oil Co. v. EPA,
792 F.3d 978 (8th Cir. 2015) ........................................... 5
Massachusetts v. EPA,
549 U.S. 497 (2007) ............................................ 21, 28, 33
Mayo Foundation for Medical Education &
Research v. United States,
562 U.S. 44 (2011) ......................................................... 22
Michigan v. EPA,
135 S.Ct. 2699 (2015) ............................................ passim
Monroe Energy, LLC v. EPA,
750 F.3d 909 (D.C. Cir. 2014) ........................................ 5
Motor Vehicle Manufacturers Ass’n v. State
Farm Mutual Automobile Insurance Co.,
463 U.S. 29 (1983) ....................................................23, 26
National Ass’n of Home Builders v. Defenders
of Wildlife,
551 U.S. 644 (2007) ..................................................23, 31
National Biodiesel Board v. EPA,
843 F.3d 1010 (D.C. Cir. 2016) ...................................... 5
National Petrochemical Refiners Ass’n v. EPA,
630 F.3d 145 (D.C. Cir. 2010) ........................................ 6
xii
Sinclair Wyoming Refining Co. v. EPA,
887 F.3d 986 (10th Cir. 2017) ....................................5, 31
Steel Co. v. Citizens for a Better Environment,
523 U.S. 83 (1998) ......................................................... 29
Utility Air Regulatory Group v. EPA,
573 U.S. 302 (2014) ..................................................20, 21
Valero Energy Corp. v. EPA,
927 F.3d 532 (D.C. Cir. 2019) ........................................ 5
White Stallion Energy Center, LLC v. EPA,
748 F.3d 1222 (D.C. Cir. 2014) .................................... 16
STATUTES
12 U.S.C. §225a ................................................................... 19
12 U.S.C. §263 ..................................................................... 18
28 U.S.C. §1254(1) ................................................................ 2
33 U.S.C. §1311 ................................................................... 33
42 U.S.C. §1395ww(d)(3)(E)(i) .......................................... 32
42 U.S.C. §1396s ................................................................. 33
42 U.S.C. §§4321 to 44370m-12 ......................................... 33
42 U.S.C. §7411(b)(1)(B) .................................................... 17
42 U.S.C. §7545(o) ...................................................... passim
42 U.S.C. §7607(b)(1)............................................................ 9
Energy Independence and Security Act of 2007,
Pub. L. No. 110-140, pmbl., 121 Stat. 1492 .................. 5
Energy Policy Act of 2005, Pub. L. No. 109-58,
§1501, 119 Stat. 594 ........................................................ 5
REGULATIONS
40 C.F.R. §80.1106(a)(1)....................................................... 8
xiii
40 C.F.R. §80.1401 ................................................................ 7
40 C.F.R. §80.1406(a)(1)....................................................... 8
40 C.F.R. §80.1415 ................................................................ 7
40 C.F.R. §80.1427 ................................................................ 7
72 Fed. Reg. 23,900 (May 1, 2007) .................................7, 31
74 Fed. Reg. 24,904 (May 26, 2009) .................................. 32
75 Fed. Reg. 14,670 (Mar. 26, 2010) ...........................7, 8, 27
ADMINISTRATIVE MATERIALS
EPA, Renewable Fuel Standard Program Standards for 2019 and Biomass-Based Diesel
Volume for 2020: Response to Comments,
EPA-420-R-18-019 (Nov. 2018) ................................... 14
EPA, Renewable Fuel Standard Program Standards for 2020 and Biomass-Based Diesel
Volume for 2021 and Other Changes: Response
to Comments, EPA-420-R-19-018 (Dec. 2019) .......... 14
EPA, RFS Small Refinery Exemptions,
https://www.epa.gov/fuels-registrationreporting-and-compliance-help/rfs-smallrefinery-exemptions ..................................................... 30
U.S. Energy Information Administration,
Refinery capacity data by individual refinery
as of January 1, 2019, https://www.eia.gov/
petroleum/refinerycapacity/refcap19.xls ................... 30
OTHER AUTHORITIES
Antonin Scalia & Bryan A. Garner, Reading
Law: The Interpretation of Legal Texts
(2012) .............................................................................. 17
xiv
Congressional Research Service, The Renewable
Fuel Standard (RFS): An Overview (Sept. 4,
2019) ............................................................................... 20
Disclosure Statement for the Joint Prepackaged
Chapter 11 Plan of Reorganization of PES
Holdings, LLC and Its Debtor Affiliates, In re
PES Holdings, LLC, No. 18-10122-KG (Bankr.
D. Del. Jan. 22, 2018), ECF No. 10 ............................. 31
Editorial, Another Day in Bureaucratic Hell,
Wall St. J., Aug. 8, 2019 ............................................... 26
Gretchen Morgenson & Robert Gebeloff, Wall
St. Exploits Ethanol Credits, and Prices
Spike, N.Y. Times, Sept. 15, 2013 ............................... 32
Laura Blewitt, Oil Refiners Cry Foul as
‘RINsanity’ Returns Amid Margin Squeeze,
Bloomberg News (Aug. 4, 2016, 11:01 PM),
https://www.bloomberg.com/news/articles/2016
-08-04/oil-refiners-cry-foul-as-rinsanityreturns-amid-margin-squeeze..................................... 32
IN THE
Supreme Court of the United States
VALERO ENERGY CORPORATION AND
AMERICAN FUEL & PETROCHEMICAL MANUFACTURERS,
Petitioners,
v.
ENVIRONMENTAL PROTECTION AGENCY,
Respondent.
On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the District of Columbia Circuit
PETITION FOR A WRIT OF CERTIORARI
OPINIONS BELOW
The opinion of the court of appeals denying the petitions for review in Alon and Coffeyville (App., infra, 1a90a) is reported at 936 F.3d 628. EPA’s notice of denial in
Alon (App., infra, 531a-537a) was published at 82 Fed.
Reg. 56,779, and its explanation (App., infra, 356a-530a)
appears in EPA publication number EPA-420-R-17-008.
For Coffeyville, EPA’s 2017 Rule (App., infra, 189a-355a)
was published at 81 Fed. Reg. 89,746. The opinion of the
court of appeals denying the petition for review in AFPM
(App., infra, 91a-155a) is reported at 937 F.3d 903. EPA’s
2018 Rule (App., infra, 552a-670a) was published at 82
Fed. Reg. 58,486.
JURISDICTION
The judgments of the court of appeals were entered on
August 30, 2019 (Alon and Coffeyville) and September 6,
(1)
2
2019 (AFPM). No party sought rehearing. On November
19, 2019, The Chief Justice extended the time to file this
petition to December 30, 2019. This Court has jurisdiction
under 28 U.S.C. §1254(1).
STATUTORY PROVISIONS INVOLVED
The Clean Air Act’s Renewable Fuel Standard program, 42 U.S.C. §7545(o), appears in its entirety in an appendix to this petition. App., infra, 156a-186a.
The most relevant part is §7545(o)(3):
(3) Applicable percentages
(A) Provision of estimate of volumes of gasoline
sales
Not later than October 31 of each of calendar years
2005 through 2021, the Administrator of the Energy
Information Administration shall provide to the Administrator of the Environmental Protection Agency
an estimate, with respect to the following calendar
year, of the volumes of transportation fuel, biomassbased diesel, and cellulosic biofuel projected to be sold
or introduced into commerce in the United States.
(B)Determination of applicable percentages
(i) In general
Not later than November 30 of each of calendar
years 2005 through 2021, based on the estimate
provided under subparagraph (A), the Administrator of the Environmental Protection Agency shall
determine and publish in the Federal Register, with
respect to the following calendar year, the renewable fuel obligation that ensures that the requirements of paragraph (2) are met.
(ii) Required elements
The renewable fuel obligation determined for a
calendar year under clause (i) shall—
(I) be applicable to refineries, blenders, and
3
importers, as appropriate;
(II) be expressed in terms of a volume percentage of transportation fuel sold or introduced into commerce in the United States; and
(III) subject to subparagraph (C)(i), consist
of a single applicable percentage that applies to
all categories of persons specified in subclause
(I).
(C) Adjustments
In determining the applicable percentage for a calendar year, the Administrator shall make adjustments—
(i) to prevent the imposition of redundant obligations on any person specified in subparagraph (B)(ii)(I);
and
(ii) to account for the use of renewable fuel during
the previous calendar year by small refineries that are
exempt under paragraph (9).
PRELIMINARY STATEMENT
Just think about it once a year. That’s what Congress
asks of EPA: just to consider, during annual rulemaking,
whether a multi-billion-dollar obligation falls on the “appropriate” parties.
This directive comes from the Clean Air Act’s Renewable Fuel Standard program (“RFS program” or “program”), which embodies an ambitious and farsighted goal:
ensuring that America’s transportation-fuel supply contains increasing volumes of renewable fuels. Congress imposed yearly gallon-by-gallon mandates for multiple categories of renewable fuels, but Congress also recognized
that the route to achieve those targets was uncharted and
that adjustments would be necessary. It thus adopted specific procedures for EPA to follow annually.
Specifically, Congress enumerated three “[r]equired
elements” for EPA to use in each “calendar year” rule-
4
making. The first is that the renewable-fuel obligation
“shall be applicable to refineries, blenders, and importers,
as appropriate.”1 §7545(o)(3)(B)(ii)(I).2 This determination
establishes what is commonly called “the point of obligation.” In its initial implementing rule, EPA set the point
of obligation on refineries and importers, but not blenders
(who actually decide whether and how much renewable
fuel to blend into transportation fuel and who control the
physical means of doing so). EPA acknowledged that it set
and retained that point of obligation for administrative
ease. No annual rule since that acknowledgement has ever
considered whether the point of obligation remains “appropriate,” despite Congress making that assessment the
first required element of every annual rule.
EPA’s position is that “whether, how, and when” to consider the appropriateness of the point of obligation is up to
EPA. Coffeyville Resp. Br. 66. Year after year, EPA
deems comments about the point of obligation “beyond the
scope” of the rulemaking. And it denied a series of longpending petitions for rulemaking on the question. By contrast, it yearly addresses the other required elements,
along with other annual duties—but not, as Congress directed, simultaneously with examining the point of obligation.
Annual consideration via rulemaking would allow regulated parties, the public, EPA, and reviewing courts to
ensure that the program was working as intended. Whatever discretion EPA may have to decide what an “appropriate” point of obligation is, EPA wholly lacks authority
to disregard Congress’s directive to address that question.
Even if a statutory directive is burdensome and trivial,
Refineries produce petroleum blendstock from crude oil. Blenders
mix blendstock with renewable fuel and additives to produce transportation fuel such as gasoline and diesel.
1
2
All citations of §7545(o) reference 42 U.S.C. §7545(o).
5
but certainly when (as here) it is modest and important,
agencies must obey clear congressional commands. Such
commands are often procedural, like this one—Congress
sets long-term goals with procedural requirements that
ensure agencies administer complex programs in accordance with the underlying statutory objectives. Agency refusal to obey such commands—like judicial refusal to hold
agencies accountable when they arrogate power to themselves—seriously erodes successful deployment of longterm statutory programs. Many statutes require agencies
to obey procedures like the one EPA jettisoned here—and
the D.C. Circuit’s judgments below can only embolden
comparable disregard of statutory duties.
This case, therefore, is a sober reminder of the need
for this Court to define and enforce the line separating
lawful exercise of delegated power from unaccountable
agency action.
STATEMENT
I. Background
A. The RFS program
Congress enacted the RFS program in 2005 (and
amended it in 2007) “to increase the [nation’s] production
of clean renewable fuels.” Energy Independence and Security Act of 2007, Pub. L. No. 110-140, pmbl., 121 Stat.
1492, 1492; see also id. §§201-210 (amending the program);
Energy Policy Act of 2005, Pub. L. No. 109-58, §1501, 119
Stat. 594, 1067-1076 (enacting the program) (as currently
enacted, the “Act”). Although the program has been litigated constantly,3 this Court has not yet considered it. The
See, e.g., Valero Energy Corp. v. EPA, 927 F.3d 532 (D.C. Cir. 2019);
Ergon-W. Va., Inc. v. EPA, 896 F.3d 600 (4th Cir. 2018); Sinclair Wyo.
Ref. Co. v. EPA, 887 F.3d 986 (10th Cir. 2017); Nat’l Biodiesel Bd. v.
EPA, 843 F.3d 1010 (D.C. Cir. 2016); Lion Oil Co. v. EPA, 792 F.3d 978
(8th Cir. 2015); Monroe Energy, LLC v. EPA, 750 F.3d 909 (D.C. Cir.
2014); Am. Petrol. Institute v. EPA, 706 F.3d 474 (D.C. Cir. 2013);
3
6
D.C. Circuit’s decisions, including those below, explain the
RFS program’s goals, background, and requirements.
See App., infra, 6a-11a, 93a-101a.
The program requires that transportation fuel introduced into commerce in the United States contain annually increasing “applicable volume[s]” of four nested categories of renewable fuel: (1) cellulosic biofuel and (2) biodiesel, which are both components of (3) advanced biofuels, a component of (4) total renewable fuels.
§7545(o)(2)(A)-(B). The Act prescribes exact annual volumes of renewable fuels through 2022, see
§7545(o)(2)(B)(i), and requirements for setting volumes
for following years, see §7545(o)(2)(B)(ii)-(v). The Act requires EPA to convert the annual volumes into applicable
percentages of renewable fuel that the average gallon of
transportation fuel must contain.
Despite the Act’s detailed prescriptions, Congress recognized its inability to foresee how technology, the economy, natural-resource availability, and other variables
would develop deep into the future. Accordingly, Congress
did not set the RFS program on autopilot, but instead provided for annual adjustments, waivers, and exemptions,
and mandated that EPA determine each year’s “applicable
percentages” in an annual rulemaking. See §7545(o)(3)(B)(i)
(requiring annual rulemaking); §7545(o)(7) (permitting
waivers); §7545(o)(9) (providing for small refinery exemptions). Volumetric determinations for 2017 and 2018 are
not at issue in this petition.
B. The point of obligation
“Obligated parties”—those responsible for achieving
these percentages—must demonstrate compliance with
each annual Rule by acquiring and retiring “Renewable
Identification Numbers” (“RINs”).
See 40 C.F.R.
Grocery Mfs. Ass’n v. EPA, 693 F.3d 169 (D.C. Cir. 2012); Nat’l Petrochem. Refiners Ass’n v. EPA, 630 F.3d 145 (D.C. Cir. 2010).
7
§80.1427. A RIN attaches to a standardized measure of
renewable fuel, id. §§80.1401, 80.1415, and generally becomes capable of being traded, sold, or used for compliance—that is, “separated”—when the renewable fuel to
which it refers is acquired by an obligated party or
blended with petroleum blendstock to produce finished
transportation fuel.
Congress directed EPA to promulgate initial “compliance provisions” applicable to “refineries, blenders, distributors, and importers, as appropriate” to “ensure” that
statutory requirements are met. §7545(o)(2)(A)(iii)(I) (the
“Implementing Directive”). EPA’s implementing regulations determined that refineries and importers, but not
blenders, were the “appropriate” parties to obligate. 72
Fed. Reg. 23,900, 23,937 (May 1, 2007). EPA conceded at
the time that this definition misaligned the obligation and
the means of compliance: “[T]he actions needed for compliance largely center on * * * parties other than refineries
and importers,” the latter of whom “do not generally produce or blend renewable fuels at their facilities.” Ibid.
EPA’s concession acknowledged the reality that many
refineries and importers, particularly independent companies that are not vertically integrated, cannot blend renewable fuels in any appreciable quantity. Instead, to
comply with the program, these companies must buy
RINs from unobligated blenders (who separate RINs
when blending fuel, but have no compliance obligations),
obligated parties holding excess RINs, or third parties (including speculators otherwise unconnected to the fuel industry) who trade RINs in an unregulated market. Americans for Clean Energy v. EPA, 864 F.3d 691, 700-701 (D.C.
Cir. 2017) (Kavanaugh, J.) (ACE).
EPA confirmed in 2010 that it originally set the point
of obligation to “minimize the number of regulated parties
and keep the program simple.” 75 Fed. Reg. 14,670, 14,722
(Mar. 26, 2010). But simultaneously, EPA acknowledged
8
that its original rationale was “no longer valid” and that
obligating “alternative” points in the fuel-supply chain
would “more evenly align a party’s access to RINs with
that party’s [RFS program] obligations.” Ibid.
EPA nonetheless left the point of obligation unchanged. Despite the admitted “asymmetry in incentives,” see Am. Petroleum Institute v. EPA, 706 F.3d 474,
480 (D.C. Cir. 2013), EPA “d[id] not believe that the concerns expressed warrant[ed] a change in the designation
of obligated parties for the RFS[] program at th[e] time”
and instead professed “continue[d] belie[f] that the market w[ould] provide opportunities for parties who are in
need of RINs to acquire them from parties who have excess.” 75 Fed. Reg. at 14,722. EPA’s asymmetrical definition of “obligated parties” has applied to all compliance periods since 2007, when the program began. 40 C.F.R.
§§80.1106(a)(1), 80.1406(a)(1).
But Congress directed EPA to do more than establish
an initial point of obligation. It also required EPA to
make each annual Rule “applicable to refineries, blenders,
and importers, as appropriate.” §7545(o)(3)(B)(ii)(I).
Since 2010, however, EPA has refused to consider the
point of obligation in any annual Rule, despite mounting
comments demonstrating urgent need for an assessment.
Not coincidentally, during the same time span, EPA’s annual rulemakings have repeatedly concluded that “realworld constraints” made the statutory volume targets “impossible to achieve.” App., infra, 199a-200a.
Parties, including independent refiners, small-business fuel retailers, and petitioners here, objected. They
presented evidence that obligating refineries and importers, but not blenders, impeded the growth of renewablefuel use while imposing onerous compliance costs on obligated parties—so onerous that some refineries’ very viability was jeopardized solely because of the enormous
9
expense of acquiring RINs from sellers who were collecting windfall profits. For these reasons, which commenters
explained using detailed data, the misalignment could no
longer qualify as “appropriate.” And EPA’s earlier confidence that the market would harmlessly sort out EPA’s
misaligned point of obligation was gravely mistaken. Instead, the RIN market has been characterized by extreme
volatility, causing program compliance costs to fluctuate
by hundreds of millions of dollars overnight. See Alon Pet.
Br. 39.
Beginning in 2014, obligated parties not only commented annually but also began petitioning EPA to change
the definition it had adopted in the implementing regulations. EPA did not respond to those petitions until 2017.
II. Proceedings Below
The two opinions below address three cases, each illustrating a different aspect of EPA’s refusal to adjust (and to
even consider adjusting) the point of obligation. Each case
arose as a petition for review to the D.C. Circuit after final
agency action. In all three cases, that court exercised jurisdiction under 42 U.S.C. §7607(b)(1).4
A. The 2017 Rule (Coffeyville)
EPA’s 2017 Rule did not address the multitude of comments regarding the agency’s ongoing failure to obligate
the appropriate parties. Instead, EPA’s accompanying
document stated that such comments were “beyond the
scope of th[e] rulemaking” because EPA “did not propose
any changes to the definition of an obligated party.” App.,
infra, 187a. EPA’s statement also mentioned a new “separate action” in which EPA proposed to deny the pending
The litigation concerning the 2017 and 2018 Rules (and the Rules
themselves) addressed many issues distinct from the questions presented in this petition. The appendix thus contains voluminous material that, while part of the lower-court cases, is not relevant to this
petition.
4
10
petitions for rulemaking. Ibid. Petitioners sought the
D.C. Circuit’s review of the 2017 Rule, challenging (as relevant here) EPA’s failure to consider the point of obligation.
In a divided opinion, that court concluded that the Act
is “ambiguous,” under Chevron Step 1, as to whether EPA
must consider the appropriateness of the point of obligation during annual rulemaking. App., infra, 50a. The majority acknowledged that the point of obligation is the
“foundational element” of the program. Id. at 41a. It also
agreed that “EPA’s determination as to whether it is ‘appropriate’ to reconsider the point of obligation in the context of an annual volumetric rulemaking is reviewable for
abuse of discretion.” Id. at 54a. According to the majority,
however, the Act “does not specify when or in what context
EPA must make its appropriateness determination,” and
provides “at most grounds for assessing whether the
agency adequately explained” its choice not to annually
consider the point of obligation. Id. at 46a. The majority
then concluded that EPA’s interpretation was reasonable
under Chevron Step 2, noting that “EPA believes it would
not be feasible or worthwhile to undertake such reconsideration annually.” Id. at 53a.
Judge Williams disagreed. The Act, he explained, expressly requires EPA to consider who is obligated “each
time it sets the annual obligation.” App., infra, 76a. EPA
has discretion “to choose among the options that Congress
has given it,” but not to “‘explain[]’ why, in the agency’s
opinion, it’s ‘appropriate’ not to choose among the options.” Id. at 77a (citation omitted). Statutory-interpretation principles led Judge Williams to conclude that the Act
“seems inevitably to require” annual consideration, not
mere “recitation that some time ago the agency considered the factors that it then thought relevant.” Id. at 76a.
Judge Williams emphasized that the majority “doesn’t
actually use any of the tools of statutory construction,”
11
App., infra, 88a, and instead “extend[s] to EPA the type of
‘reflexive’ deference” that this Court “has recently criticized,” id. at 87a (quoting Kisor v. Wilkie, 139 S. Ct. 2400,
2415 (2019)). This reflexive deference improperly “grants
EPA essentially unfettered discretion as to when—or even
if—it will consider the appropriateness of the point of obligation.” Ibid.
Nonetheless, Judge Williams concurred in the judgment because he concluded that the collateral proceeding
satisfied EPA’s duty in connection with the 2017 Rule.
App., infra, 89a.
B. The collateral proceeding (Alon)
Days before finalizing the 2017 Rule, EPA initiated the
collateral proceeding at issue in Alon. EPA “proposed to
deny the petitions [EPA] ha[d] received to change the
point of obligation,” App., infra, 187a, and it finalized that
denial the next year, id. at 531a. EPA worried that merely
considering the point of obligation would cause “upheaval
and uncertainty in the fuels marketplace.” Id. at 360a.
EPA’s denial rested heavily on its assumption that the misaligned point of obligation was harmless because companies lacking the ability to generate RINs could simply
“pass[] on” the cost of obtaining RINs to customers. Id.
at 372a. Petitioners had presented contrary evidence
demonstrating that many refineries were unable to recover these costs, see Alon Pet. Reply 26-27, a fact that
EPA itself later acknowledged by issuing dozens of “economic hardship” exemptions.
In Alon, the D.C. Circuit applied an “extremely limited” and “highly deferential” standard of review to conclude that EPA had acted with “enough” reasonableness
in denying the rulemaking petitions that asked it to assess
the point of obligation. App., infra, 32a (citations and internal quotation marks omitted). The opinion expressly
declined to address petitioners’ arguments that, for
12
example, EPA’s issuance of waivers to small refineries
based on “disproportionate economic hardship” under
§7545(o)(9), and the bankruptcy of the largest refiner on
the East Coast, directly contradicted EPA’s rationale and
disproved the pass-through theory. Id. at 35a-36a.
C. The 2018 Rule (AFPM)
In proposing the 2018 Rule, EPA raised continuing
concerns about the RIN market. App., infra, 538a-540a.
EPA acknowledged reports of market manipulation, id. at
539a, and highlighted considerable variation in renewablefuel import and export levels and related concerns regarding renewable-fuel prices, id. at 547a. Petitioners’ comments included data showing that EPA was rightly concerned about RIN prices and the RIN market; they presented new information confirming that the point of obligation was not “appropriate.” AFPM Pet. Br. 55.
Although EPA devised RINs to allow obligated parties
to verify compliance with the program, see §7545(o)(5) (authorizing a “credit” program), mounting evidence showed
that the misaligned point of obligation had caused severe
RIN-market inefficiencies and volatility and had imposed
severe economic hardship on obligated parties. It also disincentivized infrastructure development that would facilitate adding renewable fuel to transportation fuels. AFPM
Pet. Br. 63-64. But even after EPA itself raised concerns
about the RIN market, EPA’s final 2018 Rule again ignored responsive comments regarding the point of obligation because the agency had deemed them “beyond the
scope” of the rule. App., infra, 551a. Weeks later, as comments had forecast, the East Coast’s largest refiner declared bankruptcy, citing the program’s “unpredictable,
escalating, and unintended compliance burden” as the
“primary driver” of its decision. AFPM Pet. Br. 7 (citation
and internal quotation marks omitted). Petitioners challenged EPA’s 2018 Rule, again arguing, as relevant here,
that EPA failed to make the required determination of
13
“appropriate” obligated parties.
The D.C. Circuit briskly rejected the point-of-obligation argument: “There is no doubt that the EPA is correct
that comments regarding the agency’s ‘obligated party’
definition fell outside the scope of the 2018 rulemaking.”
App., infra, 132a. EPA had “declared” that it was uninterested in considering the point of obligation, ibid., and the
court concluded that Coffeyville justified EPA’s declaration. Id. at 133a. Despite citing Coffeyville, the court did
not actually analyze whether EPA had abused its direction—even though Coffeyville pointed to the court’s obligation to assess that as support for holding that the statute imposed no annual duty. Id. at 54a.
REASONS FOR GRANTING THE PETITION
The need for this Court’s review transcends correcting
EPA’s and the D.C. Circuit’s serious statutory-interpretation errors. The more basic purpose of preventing agencies from inflating their power at the expense of congressional commands—and of ensuring that courts are not
complicit when agencies overreach—is central here.
This Court’s case law reflects an important balance:
affording some deference to agencies while vigorously enforcing statutory commands. The judgments below disturb that balance, risking the RFS program and many others. The Court should grant the petition to ensure that
traditional judicial review holds agencies accountable to
congressional directives.
I. The D.C. Circuit wrongly deferred to EPA’s evasion
of the annual duty that the Act clearly imposes
Petitioners bring a single petition because the three
cases here illustrate how EPA and the D.C. Circuit have
eliminated an important and textually-explicit congressional command to an administrative agency.
• In Coffeyville, the D.C. Circuit granted EPA discretion where it had none. Congress ordered EPA
14
to annually consider whether the point of obligation remains appropriate, but the majority below
approved EPA’s self-serving belief that annual consideration is not “worthwhile.” App., infra, 53a.
• In Alon, the same panel approved a collateral proceeding in which EPA arbitrarily and irrationally
refused to initiate a rulemaking to consider the appropriate point of obligation. App., infra, 32a-42a.
The majority allowed that proceeding to function as
a one-time substitute for obeying Congress’s command to consider the appropriate “point of obligation” every single year, alongside the other required elements for each annual Rule. Id. at 55a.
• Finally, in AFPM—issued only one week after
Coffeyville—the D.C. Circuit showed that Coffeyville’s suggestion that EPA could abuse its discretion by ignoring the point of obligation in future annual rulemakings was toothless. App., infra, 132a133a. The record in AFPM amplified grounds indicating that the point of obligation was no longer appropriate and impeded the RFS program’s functioning, but the court, without conducting any
“abuse of discretion” analysis, summarily deferred
to EPA’s decision to place the point of obligation entirely “outside the scope” of the 2018 Rule. Ibid.
These decisions allow EPA to evade a basic statutory command—to consider the point of obligation. EPA has relied
on them—as recently as this month—to continue evading
the command.5 As important as that command is for the
See EPA, Renewable Fuel Standard Program - Standards for 2019
and Biomass-Based Diesel Volume for 2020: Response to Comments,
EPA-420-R-18-019 (Nov. 2018) at 188 (concluding that “[c]hanges to
the point of obligation” are “beyond the scope” of 2019 annual rulemaking); EPA, Renewable Fuel Standard Program - Standards for
2020 and Biomass-Based Diesel Volume for 2021 and Other Changes:
Response to Comments, EPA-420-R-19-018 (Dec. 2019) at 219
5
15
RFS program, its court-approved breach also reflects judicial reluctance to constrain agency lawlessness.
A. The Act requires annual consideration
Under the Clean Air Act, EPA must annually determine a renewable fuel obligation, a “[r]equired element[]”
of which is that the obligation “shall be applicable to refineries, blenders, and importers, as appropriate.”
§7545(o)(3)(B)(ii). Discarding statutory-interpretation
principles, the majority below concluded that the word
“appropriate” gives EPA discretion to determine the obligated parties once, then apply that definition indefinitely.
This interpretation defies the statute’s text and unreasonably enlarges the agency’s discretion to resolve a major
question beyond the bounds that Congress dictated. See,
e.g., Michigan v. EPA, 135 S. Ct. 2699, 2711 (2015) (“The
Agency must consider cost,” but it is “up to the Agency to
decide (as always, within the limits of reasonable interpretation) how to account for cost.”). Even setting aside this
clear congressional mandate, EPA acted arbitrarily and
capriciously by refusing to consider the point of obligation
in the underlying proceedings.
1. The Act’s text requires annual consideration of
whether the point of obligation is “appropriate”
The Act unavoidably obligates EPA to annually consider whether the point of obligation is appropriate:
(ii) Required elements
The renewable fuel obligation determined for a
calendar year under clause (i) shall—
(I) be applicable to refineries, blenders, and
importers, as appropriate;
***.
(declining to “reopen” consideration of the point of obligation in 2020
annual rulemaking, because “[t]he D.C. Circuit reviewed this issue in
Alon”).
16
§7545(o)(3)(B)(ii)(I). This delegation is not optional; it
does not give EPA discretion to avoid making the annual
point-of-obligation determination. “It is rudimentary administrative law that discretion as to the substance of the
ultimate decision does not confer discretion to ignore the
required procedures of decisionmaking.” Bennett v.
Spear, 520 U.S. 154, 172 (1997); see also Envt’l Def. Fund
v. Thomas, 870 F.2d 892, 898-899 (2d Cir. 1989) (“The
words ‘as may be appropriate’ clearly suggest that the Administrator must exercise judgment.” (emphasis added)).
a. Several textual observations reinforce this point.
First, by its very definition, “appropriate” is a term which
“naturally and traditionally includes consideration of all
the relevant factors.” Michigan, 135 S. Ct. at 2707 (quoting White Stallion Energy Ctr., LLC v. EPA, 748 F.3d
1222, 1266 (D.C. Cir. 2014) (Kavanaugh, J., concurring in
part and dissenting in part)) (emphasis added). While
Michigan rebuked EPA for insufficiently considering
such factors, id. at 2712, EPA’s action here is worse—it
cannot consider the correct factors if it refuses to undertake consideration at all. Under the Act’s text, “each * * *
calendar year” EPA must simultaneously consider what
the next year’s renewable fuel obligation will be and who
will be responsible for achieving it. §7545(o)(3)(B)(i). This
linkage makes sense, because who is obligated is fundamental to whether the obligation can be achieved.
Second, the statute also uses the word “appropriate” in
the Implementing Directive, §7545(o)(2)(A)(iii)(I). In that
context, no one contends that the word “appropriate” excused EPA from considering the relevant factors in implementing compliance provisions. When Congress uses
“identical words” in “different parts of the same statute,”
courts normally interpret them to carry “the same meaning.” Henson v. Santander Consumer USA Inc., 137 S. Ct.
1718, 1723 (2017) (quoting IBP, Inc. v. Alvarez, 546 U.S. 21,
34 (2005)). All agree that the first instance of “appro-
17
priate” required consideration at the implementing stage.
The second instance requires the same consideration at
the annual-rule stage. Indeed, the only reasonable reading of Congress’s decision to twice use “appropriate” in the
point-of-obligation context is that Congress wanted EPA
to pay particular attention to whether the Act’s burdens
were allocated consistently with the Act’s purpose.
Third, the RFS program is not the only environmental
scheme within the Clean Air Act that requires EPA to
consider, at a specific time, whether to adjust requirements. That Act, for example, also requires EPA to “at
least every 8 years, review and, if appropriate, revise” certain performance standards. 42 U.S.C. §7411(b)(1)(B).
Tellingly, however, that requirement includes an express
escape hatch absent from the RFS program: EPA “need
not review any such standard if the [agency] determines
that such review is not appropriate in light of readily available information on the efficacy of such standard.” Ibid.
Both the expressio unius and surplusage canons are basic
statutory-construction tools. See Antonin Scalia & Bryan
A. Garner, Reading Law: The Interpretation of Legal
Texts 107-111, 174-179 (2012). When Congress wants EPA
to determine whether review is appropriate, it says so expressly.
Fourth, the program’s nature and structure indicate
that Congress did not delegate to EPA the decision of how
often—or whether—EPA must review the program’s
“foundational element.” App., infra, 41a. The point of obligation is critical to the program’s success, and it unquestionably drives economic behavior in the massive, unregulated, and opaque market for RINs. EPA has no expertise
in commodity-market oversight. The scope and impact of
the RFS program on the nation’s economy and the comparative lack of relevant agency expertise emphasize that
courts must exhaust traditional statutory-interpretation
tools before deferring to EPA’s construction—if deference
18
is appropriate at all. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000) (“Deference under
Chevron * * * is premised on the theory that a statute’s
ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.”)
b. As Judge Williams recognized, in “apparent haste
to bow to EPA’s admittedly self-serving declaration of
what the law means,” the majority “doesn’t actually use
any of the tools of statutory construction in an attempt to
discern Congress’s meaning.” App., infra, 88a. The whole
point of Congress giving EPA discretion was for it “to
choose among the options that Congress has given it”—
not to “‘explain[]’ why, in the agency’s opinion, it’s ‘appropriate’ not to choose among the options.” Id. at 77a (quoting Kisor v. Wilkie, 139 S. Ct. at 2449 (Kavanaugh, J., concurring in the judgment)).
The majority erred by concluding without considering
context or the statute as a whole that the word “appropriate” meant that Congress had invited State Farm-style
discretion. App., infra, 46a (citing Kisor, 139 S. Ct. at
2448-2449 (Kavanaugh, J., concurring in the judgment)).
Of course, “appropriate” signals agency discretion, but
only within the Act’s bounds—which here require annual
review. See Michigan, 135 S. Ct. at 2707; cf., e.g.,
Kennecott Copper Corp., Nev. Mines Div., McGill, Nev. v.
Costle, 572 F.2d 1349, 1354 (9th Cir. 1978) (a statute providing that “(t)he Administrator shall approve any revision
* * * if he determines that it meets the [relevant] requirements” makes it “clear that the Administrator has a nondiscretionary duty to make a decision” (citation omitted;
emphasis added)).
Analogies abound. The Federal Open Market Committee, for example, must meet “at least four times each
year,” 12 U.S.C. §263, to consider adjusting the target federal funds rate “so as to promote effectively the goals of
maximum employment, stable prices, and moderate long-
19
term interest rates.” 12 U.S.C. §225a. The Fed could not
assert that meeting just once a year would suffice, nor
could it retain a prior rate without deliberation. Congress
judged that superintending the entire economy includes a
minimum deliberative frequency. The Fed must assess
whether the prior target rate still fits present conditions,
and it must do so at the stated intervals. Likewise, EPA
must assure itself that the point of obligation is “appropriate” in connection with setting the renewable fuel obligation “each * * * calendar year[].” §7545(o)(3)(B)(ii)(I).
The majority opinion in Coffeyville contends that the
statute “does not specify when or in what context EPA
must make its appropriateness determination.” App., infra, 46a. But the statute in fact specifies both. That determination is one “[r]equired element[]” of setting the “renewable fuel obligation,” which EPA “shall determine and
publish” “each * * * calendar year[].” §7545(o)(3)(B). The
timing directive precedes “as appropriate” by only eleven
words. Ibid.
Finally, the majority cites §7545(o)(3)(B)(ii)(I), the Implementing Directive, which requires EPA to promulgate
“compliance provisions applicable to refineries, blenders,
distributors, and importers, as appropriate.” App., infra,
44a. The majority says that inclusion of “distributors” in
the Implementing Directive indicates that the first required element in the annual determination shows that
distributors cannot be obligated parties. Id. at 49a. But
as Judge Williams noted, the Act’s text already excludes
distributors from being obligated parties, because distributors do not introduce fuel “into commerce.” App., infra,
82a. The majority’s construction therefore renders
§7545(o)(3)(B)(ii)(I) superfluous. That provision implicitly
confirms that distributors do not have annual obligations,
but §7545(o)(3)(B)(ii)(I)’s text and place within the statute
reveal that it functions to require EPA to annually verify
whether the point of obligation remains appropriate.
20
The majority’s cursory textual analysis fails. Judge
Williams correctly showed that recourse to traditional
statutory-construction tools “seems inevitably to require”
EPA to annually consider the point of obligation. App.,
infra, 76a. He likewise correctly saw that the majority extended deference where this Court would refuse it—
because the statutory text leaves no ambiguity. Id. at 87a.
2. EPA’s construction unreasonably allows it to
avoid considering whether the point of obligation is impeding the program’s goals
Even if there were any statutory ambiguity, Chevron
bars deference to EPA’s unreasonable interpretation.
“Chevron allows agencies to choose among competing reasonable interpretations of a statute; it does not license interpretive gerrymanders under which an agency keeps
parts of statutory context it likes while throwing away
parts it does not.” Michigan, 135 S. Ct. at 2708. “Even
under Chevron’s deferential framework, agencies must
operate within the bounds of reasonable interpretation.”
Util. Air Regulatory Grp. v. EPA, 573 U.S. 302, 321 (2014)
(UARG) (citation and internal quotation marks omitted)).
The majority endorsed EPA’s interpretation that “appropriate” allows EPA to perform the required consideration
only when it deemed the consideration itself to be “feasible or worthwhile.” App., infra, 53a. This interpretation
is not reasonable.
First, EPA’s reading requires conceding that Congress
would allow EPA to disregard indefinitely a central aspect
of a major, costly, and forward-reaching program. At the
time of enactment, Congress could not predict how the renewable-fuel program would develop. See Congressional
Research Service, The Renewable Fuel Standard (RFS):
An Overview (Sept. 4, 2019) at 12. Because “implementation and impacts of the program are affected by many factors that are not easily predicted or controlled,” ibid., Congress mandated annual review. The majority’s contrary
21
conclusion conflicts with its acknowledgement that “the
case for changing an environmental regulation will almost
never manifest itself at one discrete moment,” but instead
“will accumulate progressively over time, as scientific
knowledge advances or economic conditions change.”
App., infra, 25a.
Second, EPA’s reading results in different deference
levels governing required elements that appear sequentially in the same subsection. Absent an annual duty, EPA
might ignore the point of obligation until it received (and
chose to respond to) a petition for rulemaking. Pushing
off the congressionally mandated duty to “whenever, if
ever,” transfers power to EPA: an agency’s denial of a petition for rulemaking is subject only to “‘extremely limited’ and ‘highly deferential’” judicial review. Massachusetts v. EPA, 549 U.S. 497, 527 (2007) (citation omitted). As
Judge Williams noted, a different deference level (with a
more demanding standard of review) tends, at the least, to
“concentrate the mind of the administrator.” App., infra,
90a. The Act links all the “[r]equired” elements; EPA’s
view disaggregates them in multiple ways, including how
the courts review EPA’s work.
Third, evidence of the effects of EPA’s refusal to annually consider the point of obligation “should have alerted
EPA that it had taken a wrong interpretive turn.” UARG,
573 U.S. at 328. Even after EPA began receiving comments addressing the point of obligation, it concluded annual rulemakings by setting volumetric obligations below
statutory targets, determining that Congress’s goals were
“impossible to achieve” due to “real-world constraints.”
App., infra, 199a-200a. Further, EPA has exempted increasing numbers of small refineries from annual renewable-fuel obligations after determining that compliance imposed “economic hardship” on them, see §7545(o)(9), thus
exacerbating the harsh impact of the misplaced point of
obligation on the remaining obligated parties. This
22
dysfunction is rooted in EPA’s refusal to consider the point
of obligation.
The majority rejected these arguments, citing EPA’s
“belie[f]” that “it would not be feasible or worthwhile to
undertake such reconsideration annually.” App., infra,
53a. Although “administrative convenience” and “improve[d] administrability” might contribute to a reasonable explanation under Chevron’s second step, see, e.g.,
Mayo Found. for Med. Educ. & Research v. United States,
562 U.S. 44, 59 (2011), those factors must yield when they
lead to an interpretation that hinders a statute’s express
purposes. See ibid. (approving agency’s conveniencebased interpretation when it also “further[ed] the purpose” of the underlying statute); see also Judulang v.
Holder, 565 U.S. 42, 64 (2011) (concluding that agency action that is “unmoored from the purposes” of the underlying statute “cannot pass muster under ordinary principles
of administrative law”). The majority’s reliance on administrative ease for its interpretative conclusion was therefore misplaced. Cf. Michigan, 135 S. Ct. at 2708 (“[I]t is
unreasonable to read an instruction to an administrative
agency to determine whether ‘regulation is appropriate
and necessary’ as an invitation to ignore cost.”).
EPA wrongly claims that by “not propos[ing] any
changes to the definition of an obligated party,” it eliminates any duty to consider comments indicating that the
definition is no longer appropriate. App., infra, 187a. But
in Judge Williams’s words, a reasonable interpretation
forecloses the argument that EPA “need not even address
the point—ever again.” App., infra, 78a.
3. EPA’s decision to treat relevant comments as
“beyond the scope” of rulemaking was arbitrary and capricious
Even if EPA had no explicit statutory obligation to consider the point of obligation annually, its decision to place
23
the issue “beyond the scope” of annual rulemaking, App.,
infra, 187a, 551a, would still be arbitrary and capricious.
“One of the basic procedural requirements of administrative rulemaking is that an agency must give adequate reasons for its decisions.” Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125 (2016). An agency’s decision
is arbitrary and capricious if the agency “entirely failed to
consider an important aspect of the problem” or “offered
an explanation for its decision that runs counter to the evidence before the agency.” Nat’l Ass’n of Home Builders
v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983)). EPA must give “adequate reasons” for refusing to consider the point of obligation. Encino Motorcars, 136 S. Ct. at 2125. It cannot make an important aspect of the program irrelevant by decree.
The point of obligation is “foundational” to the RFS
program, as the majority below recognized. App., infra,
41a. EPA’s insistence that it can maintain the RFS program without even considering this issue is akin to a motorist insisting that she can maintain her vehicle (or worse,
someone else’s vehicle) without ever checking the oil. That
would be particularly irrational if the engine began to
seize, and exponentially more so if the driver recognized
that the engine was failing. But that is the situation here:
“EPA and obligated parties have raised serious concerns
that the Renewable Fuel Program is not actually functioning as intended.” ACE, 864 F.3d at 712.
For example, in its 2018 Proposal, EPA identified specific concerns with the program, including “whether and
how the current [RIN] trading structure provides an opportunity for market manipulation.” App., infra, 539a.
EPA specifically sought “comment and input on potential
changes to the RIN trading system that might help address these concerns.” Ibid. But in the same Proposal,
EPA stated that it would not consider revisiting “the
24
current definition of ‘obligated party.’” Ibid. Then, in a
supplemental notice of proposed rulemaking for the 2018
Rule, EPA highlighted considerable variation in renewable-fuel import and export levels, raised related concerns
regarding renewable-fuel prices and energy independence, and “invite[d] comment on how to balance” the Act’s
objectives of “increasing renewable fuels” and “limiting in
certain circumstances the additional cost” of doing so.
App., infra, 545a n.4. EPA is not blind to the RIN program’s shortcomings; it merely wishes to avoid seeing an
obvious cause.
In responsive comments, petitioners linked problems
EPA identified to the misplaced point of obligation.
AFPM Pet. Br. 56-57. Petitioners explained that unobligated RIN sellers are reaping windfall profits instead of
incentivizing increased renewable-fuel sales. Ibid. This,
in turn, causes undesirable volatility, price spikes, and
RIN-market distortions. Petitioners also introduced extensive data and analysis demonstrating that applying the
2018 obligations only to refineries and importers, as EPA
proposed, would constrain available supply—but that obligating appropriate parties, including blenders, would enhance supply. Id. at 55. Finally, petitioners introduced evidence demonstrating that obligated parties cannot “pass
through” RIN costs as EPA purported to believe. Id. at
29-30.
Although petitioners demonstrated that EPA’s concerns regarding imports, exports, and RIN-market manipulation flowed from the misplaced point of obligation,
and although EPA expressly solicited comments on these
exact issues, EPA ignored all comments identifying the
point of obligation as the culprit. EPA’s failure to consider
an important aspect of these problems is a textbook arbitrary-and-capricious action. See FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 537 (2009) (“[a]n agency cannot * * * ignore inconvenient facts”). Its offered expla-
25
nation—that the point of obligation was “beyond the
scope” of the annual rulemaking—directly contradicts evidence showing that the point of obligation is at the heart
of program failures. Indeed, counterintuitive decisions—
like setting the point of compliance someplace other than
where compliance is achieved, as EPA did—require more
explanation, not no explanation.
Therefore, even setting aside EPA’s annual statutory
duty, this Court cannot uphold EPA’s arbitrary and capricious refusal to reconsider the point of obligation in promulgating the underlying annual rules.
B. The D.C. Circuit’s deference to EPA’s faulty collateral proceeding was improper and threatens
other programs
The foregoing shows that the Act requires annual consideration of the point of obligation—and that, even if it
didn’t, EPA’s refusal to consider related comments was arbitrary and capricious. The majority below reached a contrary conclusion by unduly deferring to EPA. First, EPA
argued that its denial of rulemaking—a collateral proceeding—cures the defective annual rulemakings. AFPM
Resp. Br. 56. Vacatur of that denial is necessary to ensure
that EPA cannot invoke it to justify ignoring the point of
obligation in the future. Second, in conducting the collateral proceeding, EPA wrongly continued its reliance on
administrative ease and ignored crucial evidence and intra-agency inconsistency.
Review is needed to bring EPA back within lawful
bounds, and to prevent lower courts from further expanding agency discretion to circumvent clear requirements.
The collateral proceeding was an improper exercise that
reached the wrong result. It should be vacated.
1. The D.C. Circuit wrongly deferred to EPA’s decision to conduct a collateral proceeding
Rather than address comments regarding the point of
26
obligation in annual rulemaking, EPA considered the issue
in a collateral proceeding that it convened more than three
years after it began receiving requests for rulemaking.
App., infra, 532a. The collateral proceeding did not justify
EPA’s interpretation of the Act or make its “beyond the
scope” determination any less arbitrary and capricious.
The Act links the point of obligation (who is obligated?)
and the percentage determinations (for how much?) side
by side in the same list of annual duties. §7545(o)(3)(B)(ii).
These duties include at least three required elements for
an annual rulemaking that sets a single “renewable fuel
obligation” for the coming year. Ibid. Jointly considering
these interdependent duties allows the commenting public, EPA, and the courts to see every “aspect of the problem” together. State Farm, 463 U.S. at 43. Disaggregating them leads to inconsistency and incoherence.
Nor can the collateral proceeding justify EPA’s decision to put the point of obligation “beyond the scope” of
the annual Rules. First, if the Act requires annual consideration, see supra Part I.A, then the collateral proceeding—which began only thirteen days before the 2017 Rule
was finalized—cannot discharge even the 2017 obligation.
Second, petitioners’ comments on the 2018 Rule raised
new issues that EPA did not adequately address in the collateral proceeding. See infra Part II.B.2.
EPA’s imposition of a collateral proceeding also unduly
burdens stakeholders. Rather than participate in the comprehensive annual rulemaking that Congress intended,
petitioners had to comment annually and initiate separate
rulemaking petitions to have any hope of relief. The Wall
Street Journal described this fight to get EPA to just consider the point of obligation as “a saga of bureaucratic
hell” that “would make Kafka smile.” Editorial, Another
Day in Bureaucratic Hell, Wall St. J., Aug. 8, 2019, at A14.
These separate rulemaking petitions, moreover,
27
offered no guarantee that EPA would timely respond. See,
e.g., In re Pesticide Action Network N. Am., 798 F.3d 809,
813 (9th Cir. 2015) (requiring a decision only after “EPA
ha[d] spent nearly a decade reviewing” a petition and had
ignored the court’s “unambiguous order directing EPA to
specify a date for issuing a ‘final ruling’”). And when EPA
does respond, a different standard of review applies. See
supra Part I.A.2. These points demonstrate that an isolated collateral proceeding cannot discharge what Congress made an annual duty.
EPA’s decision in the collateral proceeding should be
vacated to protect the integrity of the program and to deter agencies from using shell games to evade congressional mandates. Moreover, under any standard of review,
the collateral proceeding reached the wrong result.
2. EPA’s decision in the collateral proceeding
does not deserve deference
EPA’s collateral proceeding not only contravened its
statutory mandate, but also showcased arbitrary and capricious decisionmaking. The agency continued its long
reliance on administrative ease to justify a decision that
disregarded critical evidence and was plagued by inconsistency.
a. Since 2007, EPA has relied on administrative ease
to justify divorcing program obligations from the means of
compliance. EPA admitted the 2007 regulations were for
administrative ease—“minimiz[ing] the number of regulated parties and keep[ing] the program simple.” 75 Fed.
Reg. 14,722. EPA also relied on administrative ease in
2010—instead of minimizing the number of regulated parties, it pivoted to preventing a “significant change in the
number of obligated parties.” Ibid. And in the collateral
proceeding, EPA claimed that it would not consider the
point of obligation annually due to associated “time pressure” and “lack of certainty.” App., infra, 367a & n.10.
28
To take those concerns at face value in light of the
countervailing textual and structural arguments mandating consideration reflects insufficient scrutiny. See Massachusetts v. EPA, 549 U.S. at 534 (“Nor can EPA avoid its
statutory obligation by noting the uncertainty surrounding various features of climate change and concluding that
it would therefore be better not to regulate at this time.”).
Review is needed to clarify how far convenience can go to
justify an agency’s choices that impede rather than further statutory objectives.
First, EPA has not shown that any material convenience results from disregarding its statutory duty. The
“burden” that the majority worried about “heap[ing] * * *
onto EPA’s plate,” App., infra, 53a, is a pre-existing feature of the annual rulemaking, which, point of obligation
aside, already prompts thousands of comments and extensive litigation. EPA’s interpretation does not obviously incentivize fewer comments (assuming that is a benefit).
Under EPA’s interpretation, the scope of rulemaking encompasses symptoms of the misaligned point of obligation—such as the need for statutory waivers—but not the
underlying cause. Nor has EPA’s interpretation produced
a smoother-functioning program, which itself would ease
EPA’s burdens. EPA’s worries are both “vastly overblown,” App., infra, 86a, and counterintuitive. See Athens
Cmty. Hosp., Inc. v. Shalala, 21 F.3d 1176, 1180 (D.C. Cir.
1994) (“ease of administration can hardly justify a requirement that is of little or no benefit”).
Second, whatever role convenience might play in the
abstract, its significance must diminish as the regulatory
effort that the agency avoids grows in importance. Here,
the regulatory target is a massive portion of the economy,
and the convenience EPA invokes places the program’s
foundational feature on autopilot. Indeed, EPA demands
solicitude that even judges do not receive, given that this
Court has rejected the “administrative convenience”
29
rationale for the judiciary. See, e.g., Steel Co. v. Citizens
for a Better Env’t, 523 U.S. 83, 101 (1998) (rejecting the
idea of “[h]ypothetical jurisdiction”—even if it allows efficient resolution of otherwise-complex cases).
Third, administrative ease is not a valid rationale for
an agency to do nothing—to give the point of obligation no
consideration—because doing nothing is always easier
than doing what Congress requires. See Leather Indus.
of Am., Inc. v. EPA, 40 F.3d 392, 403 (D.C. Cir. 1994)
(“Given that the EPA had at hand the information necessary accurately to prevent the known risks, it must provide some explanation for ignoring it * * * .”). Administrative convenience might justify an agency’s decision to consider a problem at a certain level of generality, but EPA’s
decision to decline consideration altogether represents a
difference in kind, not degree.
If administrative ease can justify EPA’s (in)action here,
it can justify almost anything.
b. EPA’s decision in the collateral proceeding was irrational and capricious in light of evidence that the Alon
opinion expressly declined to address. A pivotal assumption in EPA’s denial of rulemaking petitions was that, no
matter how volatile, inefficient, and extreme the RIN market becomes, the misaligned point of obligation is harmless. This assumption, in turn, rests on the premise that
“[a]ll obligated parties, including merchant refiners, are
generally able to recover the cost of the RINs they need
for compliance” by passing RIN acquisition costs to their
customers. App., infra, 403a. EPA also justified inaction
by maintaining that “the current structure of the RFS
program is working” and “providing obligated parties a
number of options for acquiring the RINs they need to
comply with the RFS standards.” Id. at 359a. These assumptions defied the evidence before EPA and the
agency’s own contrary determinations.
30
For example, EPA received comments from the largest
refiner on the East Coast, Philadelphia Energy Solutions
& Marketing, LLC (“PES”) detailing immediate realworld consequences of RIN-market dysfunction on a significant portion of the nation’s domestic refining capacity.
Alon Pet. Br. 46. PES explained that annual RIN costs,
which represented more than twice its payroll and were its
single largest expense after crude oil, had forced it to conduct layoffs, delay capital investments, suffer credit downgrades, and pursue imminent restructuring. Ibid.
In response, EPA invoked a stale pass-through theory,
well aware that this theory defied reality. While EPA’s denial theorized that “refiners recover the cost of the RIN
through higher prices,” App., infra, 488a, EPA contemporaneously was exempting increasing numbers of obligated
refineries after finding that they suffered “disproportionate economic hardship” caused by the renewable-fuel obligation. See §7545(o)(9)(B)(i). For the 2017 compliance
year, EPA issued economic-hardship exemptions to 35
small refineries—a 500% increase from just two years
prior—and exemptions stayed at a similar level for 2018.6
Government statistics show that fewer than 60 refineries
qualified as “small refineries” potentially eligible for hardship exemptions—meaning that over half of all small refineries could not pass through RIN costs and instead
were suffering economic hardship necessitating exemptions.7 Given this record, EPA’s conclusion that it need not
reexamine the point of obligation because the RIN market
was functioning and RIN costs were entirely passed
EPA, RFS Small Refinery Exemptions, https://www.epa.gov/fuels-registration-reporting-and-compliance-help/rfs-small-refinery-exemptions
(last updated December 19, 2019).
6
U.S. Energy Information Administration, Refinery capacity data by
individual refinery as of January 1, 2019, https://www.eia.gov/
petroleum/refinerycapacity/refcap19.xls.
7
31
through was contrary to the evidence, and arbitrary and
capricious. See Nat’l Ass’n of Home Builders, 551 U.S. at
658; see also Ergon-W. Va., 896 F.3d at 613 (holding that
EPA’s reliance on pass-through theory to deny exemption
was arbitrary given specific evidence of hardship to the
petitioning refiner).
EPA also dismissed PES’s comments on the 2018 Rule
based on looking retrospectively at what EPA saw as a
small number of pre-2017 refinery closures. The fact that
the RIN market had not driven other refineries out of
business, however, was not a reasonable basis for EPA to
conclude that the RIN market was functioning well. See,
e.g., Sinclair Wyo. Ref. Co. v. EPA, 887 F.3d 986, 988 (10th
Cir. 2017) (holding that EPA exceeded its authority by interpreting hardship exemption to require a threat to a refinery’s survival as an ongoing operation). In fact, within
two months after EPA published the denial, PES filed for
bankruptcy. AFPM Pet. Br. 7. Echoing its comments on
the 2018 Rule, PES expressly identified the RFS program’s “unpredictable, escalating, and unintended compliance burden” as “the primary” precipitant of its bankruptcy.8 PES also asserted that “[a]ligning the point of
obligation” would eliminate serious threats to the nation’s
refining industry. PES Disclosure Statement at 25.
The pass-through theory was also suspect due to EPA’s
shifting positions regarding extreme RIN prices. In 2007,
EPA intended that RINs be widely available at low cost to
facilitate compliance. 72 Fed. Reg. at 23,944; see also ACE,
864 F.3d at 699 (describing RIN markets as intended “to
facilitate flexible and cost-effective compliance.”). In 2010,
EPA reaffirmed that its choice of obligated parties
Disclosure Statement for the Joint Prepackaged Chapter 11 Plan of
Reorganization of PES Holdings, LLC and Its Debtor Affiliates at 1,
In re PES Holdings, LLC, No. 18-10122-KG (Bankr. D. Del. Jan. 22,
2018), ECF No. 10 (“PES Disclosure Statement”).
8
32
assumed “an excess of RINs at low cost.” 74 Fed. Reg.
24,904, 24,963 (May 26, 2009). But EPA changed its tune
following a series of wildly escalating and volatile prices
that journalists dubbed “RINsanity.”9 In the denial, EPA
recast high-cost RINs as desirable, a purported reflection
of “the increasing cost of supplying additional renewable
fuels to the marketplace.” App., infra, 393a.
These and other unexplained inconsistencies in foundational assumptions underlying the denial exemplify
reckless rulemaking and independently require vacating
the denial.
3. The opinions below threaten other programs
that rely on statutorily mandated procedural
requirements
The D.C. Circuit allowed EPA to transform annual
procedural safeguards here into authorization to indefinitely ignore the point of obligation—precisely the opposite of Congress’s mandate. Because Congress often enacts procedural rules to achieve substantive goals, the
holding below threatens more than just the RFS program.
For example, the Secretary of Health and Human Services must annually update the factor that determines how
much the Medicare program will reimburse a hospital for
its wage-labor. 42 U.S.C. §1395ww(d)(3)(E)(i). The factor
“shall” be updated “on the basis of a survey conducted by
the Secretary (and updated as appropriate).” Ibid. The
Secretary has discretion to design the survey but cannot
deem it “appropriate” to conduct no survey at all. See also,
See, e.g., Gretchen Morgenson & Robert Gebeloff, Wall St. Exploits
Ethanol Credits, and Prices Spike, N.Y. Times, Sept. 15, 2013, at A1;
Laura Blewitt, Oil Refiners Cry Foul as ‘RINsanity’ Returns Amid
Margin Squeeze, Bloomberg News (Aug. 4, 2016, 11:01 PM),
https://www.bloomberg.com/news/articles/2016-08-04/oil-refiners-cry
-foul-as-rinsanity-returns-amid-margin-squeeze (hailing “RINsanity
the sequel”).
9
33
e.g., 42 U.S.C. §1396s (list of pediatric vaccines must be
“periodically reviewed and as appropriate revised”); 33
U.S.C. §1311 (effluent limitations must be “reviewed at
least every five years and, if appropriate, revised”); 42
U.S.C. §§4321 to 44370m-12 (requiring agencies to consider the environmental consequences of particular federal actions).
As in these statutes, the RFS program dictates a procedure rather than an outcome. Annual review was Congress’s best tool to keep the program functioning far into
the future. Congress’s ability to constrain EPA and other
agencies via specific procedural limitations deserves protection. The judgments below shift power to agencies to
act—or not—at their whim, not Congress’s command. If
Congress cannot trust the courts to insist that agencies
follow statutory procedures, its ability to enact forwardlooking programs diminishes. See, e.g., Massachusetts v.
EPA, 549 U.S. at 532 (recognizing Congress’s understanding “that without regulatory flexibility, changing circumstances and scientific developments” can render a major
environmental program “obsolete”). Review is warranted
to preserve the boundaries that allow congressional delegation of authority. Absent agency adherence to procedural commands, neither agencies nor Congress can function properly.
II. This case presents an ideal vehicle
This petition presents a helpful alignment of three separate cases that reflect the D.C. Circuit’s complete range
of response. Coffeyville is the D.C. Circuit’s resolution of
the annual point-of-obligation issue, on which the panel divided. The majority said that EPA can use a “separate
proceeding” because “appropriate” has no “particular
temporal dimension.” App., infra, 46a. Judge Williams
disagreed, but concluded that the collateral proceeding
(which he viewed as contemporaneous) saved the 2017
Rule. AFPM, upholding the 2018 Rule, doesn’t mention
34
the collateral proceeding; it just cites Coffeyville. Although Coffeyville said that a refusal to reconsider the
point of obligation could be an abuse of discretion if the
record were definitive enough, AFPM gave EPA complete
deference, concluding—without examining the record—
that there is “no doubt” that the point of obligation is beyond the scope of annual rulemaking. Id. at 132a.
Review now is also timely and urgent because EPA
must review “the implementation of the [RFS] program
during calendar years” 2006 to 2022 to inform its administration of the program beyond 2022. §7545(o)(3)(B)(ii)(I).
While a decision in this case would affect the 2017 and 2018
Rules (which are directly at issue), and the four following
annual rules, it would be even more important beginning
with the 2023 Rule. In that year, while the point of obligation will remain within the scope of annual rulemaking, see
supra Part I.A.3, it will also become a baseline whose prior
“implementation” the agency must “review” as it continues to administer the program. §7545(o)(2)(B)(ii). Because
this baseline will affect how the program functions indefinitely, it is critical for the agency to determine it using the
procedures that Congress specifically required.
CONCLUSION
The petition for a writ of certiorari should be granted.
35
Respectfully submitted.
CLARA M. POFFENBERGER
CLARA POFFENBERGER
ENVIRONMENTAL LAW
AND POLICY, LLC
2933 Fairhill Road
Fairfax, Virginia 22031
(703) 231-5251
SAMARA L. KLINE
BAKER BOTTS L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6825
MEGAN H. BERGE
BAKER BOTTS L.L.P.
The Warner
1299 Pennsylvania Ave. N.W.
Washington, D.C. 20004
(202) 639-1308
BRITTANY M. PEMBERTON
BRACEWELL LLP
2001 M Street N.W.
Suite 900
Washington, D.C. 20036
(202) 828-1708
Counsel for Petitioner
Valero Energy Corporation
December 2019
EVAN A. YOUNG
Counsel of Record
ELLEN SPRINGER
JOSHUA MORROW
BAKER BOTTS L.L.P.
98 San Jacinto Boulevard
Suite 1500
Austin, Texas 78701
(512) 322-2506
evan.young@bakerbotts.com
Counsel for Petitioner
Valero Energy Corporation
RICHARD MOSKOWITZ
AMERICAN FUEL &
PETROCHEMICAL
MANUFACTURERS
1800 M Street N.W.
Suite 900 North
Washington, D.C. 20036
(202) 457-0480
Counsel for Petitioner
American Fuel &
Petrochemical Manufacturers
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.