Amicus Curiae Brief — Valero Energy Corporation, et al., Petitioners v. Environmental Protection Agency

No. 19-835

In The

Supreme Court of the United States

VALERO ENERGY CORP., ET AL.,

Petitioners,

v.

ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

On Petition for Writ of Certiorari to

The United States Court of Appeals

For the District of Columbia

MOTION FOR LEAVE TO FILE

AND BRIEF OF AMICUS CURIAE

NATIONAL ASSOCIATION OF HOME

BUILDERS OF THE UNITED STATES IN

SUPPORT OF PETITIONERS

AMY C. CHAI*

THOMAS J. WARD

NATIONAL ASSOCIATION

OF HOME BUILDERS

OF THE U.S.

1201 15th Street, N.W.

Washington, D.C. 20005

(202) 266-8200

achai@nahb.org

* Counsel of Record

1

Amicus curiae National Association of Home

Builders of the United States (NAHB) respectfully

moves for leave of the Court to file the accompanying

brief under Supreme Court Rules 21, 33.1, 37.2.

Counsel for all parties received timely notice of

amicus curiae’s intent to file the brief, and all but

one party has consented. The Renewable Fuels

Association takes no position.

NAHB writes in support of the Petitioners because

the issues presented, including setting appropriate

bounds to the deference courts grant agencies in

statutory interpretation, carry wide-ranging effects

that impact the many regulations that govern

residential construction.

NAHB frequently participates as a party litigant

and amicus curiae in matters that involve federal

agency adherence to Congressional directives and to

the Administrative Procedure Act (APA). NAHB

members are regulated by multiple federal agencies,

in additional to state and local regulators, and are

adversely impacted when agencies stray outside

Congressional mandates or fail to comply with the

APA’s rulemaking requirements.

In the accompanying brief, NAHB cites several

examples where its members have experienced

agency action that ignores or subverts statutory

directives, as well as situations where agencies have

refused to consider relevant public comment

provided through the rulemaking process.

Courts play a critical role in ensuring agency

compliance with statute and procedure. Both

2

Petitioners and NAHB have experienced the

consequences when agencies fail to adhere to

Congressional mandate and refuse to consider

public input. Therefore, amicus curiae respectfully

requests that the Court grant leave to file this brief.

Respectfully submitted,

AMY C. CHAI*

THOMAS J. WARD

NATIONAL ASSOCIATION

OF HOME BUILDERS

OF THE U.S.

1201 15th Street, N.W.

Washington, D.C. 20005

(202) 266-8200

achai@nahb.org

* Counsel of Record

No. 19-835

In The

Supreme Court of the United States

VALERO ENERGY CORP., ET AL.,

Petitioners,

v.

ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

On Petition for Writ of Certiorari to

The United States Court of Appeals

For the District of Columbia

BRIEF OF AMICUS CURIAE

NATIONAL ASSOCIATION OF HOME

BUILDERS OF THE UNITED STATES IN

SUPPORT OF PETITIONER

AMY C. CHAI*

THOMAS J. WARD

NATIONAL ASSOCIATION

OF HOME BUILDERS

OF THE U.S.

1201 15th Street, N.W.

Washington, D.C. 20005

(202) 266-8200

achai@nahb.org

* Counsel of Record

i

CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Court Rule 29.6, Amicus

National Association of Home Builders of the United

States (“NAHB”) states that it is a non-profit

501(c)(6) corporation incorporated in the State of

Nevada, with its principal place of business in

Washington, D.C. NAHB has no corporate parents,

subsidiaries or affiliates, and no publicly traded

stock. No publicly traded company has a ten percent

or greater ownership interest in NAHB.

ii

TABLE OF CONTENTS

Page(s)

INTEREST OF AMICUS CURIAE ...................... 1

SUMMARY OF ARGUMENT ............................... 2

ARGUMENT ........................................................... 3

I. REGULATED COMMUNITIES SUFFER

WHEN AGENCIES CANNOT BE HELD

ACCOUNTABLE BY CONGRESS AND

THE PUBLIC .................................................... 3

A. When Agencies Fail to Follow the

Commands of Congress, Regulated

Communities Experience Uncertainty ......... 3

B. When Agencies Shut Out Relevant

Information, Regulated Communities

Cannot Be Heard by Their Government ...... 7

II. PETITIONERS’ CASE EXEMPLIFIES

WHY THIS COURT SHOULD REJECT

THE NOTION OF “EXTREME

DEFERENCE” IN THE RULEMAKING

CONTEXT ........................................................ 11

A. “Extreme Deference” Has no Place in

APA Judicial Review ................................... 11

B. Even if “Extreme Deference” Exists,

it is Inapplicable Here ................................. 15

CONCLUSION ..................................................... 17

iii

TABLE OF AUTHORITIES

Page(s)

CASES

ACLU v. FCC, 823 F.2d 1554 (D.C. Cir. 1987) .. 9-10

American Fuel & Petrochem. Mfrs. v. EPA,

937 F.3d 559 (D.C. Cir. 2019) ........................13, 15

Baltimore Gas & Elec. Co., et al. v. Natural

Res. Def. Council, 462 U.S. 87 (1983) ...... 11-12, 13

Bloomington Nat’l Bank v. Telfer,

916 F.2d 1305 (7th Cir. 1990) ............................. 12

Board of Regents of State Colleges v. Roth,

408 U.S. 564 (1972) ............................................. 16

Catawba County, N.C. v. EPA,

571 F.3d 20 (D.C. Cir. 2009) ............................... 13

Chevron v. Nat. Res. Def. Council,

467 U.S. 837 (1984) ...................... 11, 12, 13, 14, 15

Encino Motorcars, LLC v. Navarro,

136 S. Ct. 2117 (2016) ......................................... 13

FCC v. Fox Television Stations, Inc.,

556 U.S. 502 (2009) ............................................... 9

Hydro Resources, Inc. v. EPA,

608 F.3d 1131 (10th Cir. 2010) ......................15, 16

Kisor v. Wilkie, 139 S. Ct. 2400 (2019) .................. 14

iv

TABLE OF AUTHORITIES (cont.)

Page(s)

Marsh v. Oregon Nat. Res. Council,

490 U.S. 360 (1989) ............................................. 11

Michigan v. EPA, 135 S. Ct. 2699 (2015) .............. 14

Mississippi Comm’n on Envtl. Quality v. EPA,

790 F.3d 138 (D.C. Cir. 2015) ............................. 13

Motor Vehicle Mfrs. Ass’n. of U.S., Inc. v.

State Farm Mut. Automobile Ins. Co.,

463 U.S. 29 (1983) ..........................................10, 14

National Ass’n of Home Builders v. Defenders

of Wildlife, 551 U.S. 644 (2007) ..................... 13-14

Secretary of Labor v. Cranesville Aggregate

Companies, Inc., 878 F.3d 25 (2d Cir. 2017) ...... 13

Southwestern Elec. Power Co. v. U.S. EPA,

920 F.3d 999 (5th Cir. 2019) .......................... 12-13

Thomas Jefferson University v. Shalala,

512 U.S. 504 (1994) ............................................. 14

TNS, Inc. v. N.L.R.B.,

296 F.3d 384 (6th Cir. 2002) ............................... 12

Utility Air Regulatory Group et al. v. EPA,

573 U.S. 302 (2014) ......................................4, 5, 14

v

TABLE OF AUTHORITIES (cont.)

Page(s)

STATUTORY &

CONSTITUTIONAL PROVISIONS

Administrative Procedure Act (APA),

5 U.S.C. § 551 ........................................................ 3

Occupational Safety and Health Act,

29 U.S.C. § 660(c)(2).......................................... 6, 8

29 C.F.R. § 1904.35(b)(1) ..................................... 5, 6

29 C.F.R. § 1904.36 .............................................. 6, 7

29 C.F.R. § 1904.41 .................................................. 7

Carbon Pollution Emission Guidelines for

Existing Stationary Sources: Electric

Utility Generating Units,

80 Fed. Reg. 64,662 (Oct. 23, 2015) ................... 8-9

Clean Energy Incentive Program (CEIP),

80 Fed. Reg. 64,662 (Oct. 23, 2015) ...................... 8

Occupational Safety & Health Administration,

Tracking of Workplace Injuries and

Illnesses Rule (May 12, 2016)

81 Fed. Reg. 29,624 ............................................... 5

83 Fed. Reg. 36,494 ............................................... 7

83 Fed. Reg. 36,497 ............................................... 7

83 Fed. Reg. 36,500 ............................................... 7

vi

TABLE OF AUTHORITIES (cont.)

Page(s)

Occupational Safety & Health Administration,

Tracking of Workplace Injuries and

Illnesses Rule, (Jan. 25, 2019)

84 Fed. Reg. 380 .................................................... 5

Federal Plan Requirements for Greenhouse

Gas Emissions from Electric Utility Generating

Units Constructed on or Before Jan. 8, 2014;

Model Trading Rules; Amendments to

Framework Regulations; Proposed Rule,

80 Fed. Reg. 64,966 (Oct. 23, 2015) ................... 8-9

OTHER

EPA-HQ-OAR-2013-0602, National Ass’n of Home

Builders’ Petition for Reconsideration of the

Carbon Pollution Emission Guidelines for

Existing Stationary Sources: Electric

Generating Units, Dec. 22, 2015 .......................... 9

U.S. Dept of Justice, Attorney General’s

Manual on the Administrative Procedure Act,

1947, https://fall.fsulawrc.com/admin/

1947coverhtml ............................................................ 3

Petition For A Writ of Certiorari,

Valero Energy Corp. & Am. Fuel &

Petrochemical Mfrs., 2019 WL 7423389

(No. 19-835) ..................................................4, 7, 15

vii

TABLE OF AUTHORITIES (cont.)

Page(s)

Complaint, National Association of Home Builders

of the United States, et al. v. Perez, et al.,

2017 WL 75736 (No. 5:17-cv-00009)

(W.D. Okla. Jan. 4, 2017)...................................... 5

1

INTEREST OF AMICUS CURIAE 1

The National Association of Home Builders of the

United States (“NAHB”) is a Washington, D.C.based trade association whose mission is to enhance

the climate for housing and the building industry.

Chief among NAHB’s goals are providing and

expanding opportunities for all people to have safe,

decent, and affordable housing. Founded in 1942,

NAHB is a federation of more than 700 state and

local associations. About one-third of NAHB’s

approximately 140,000 members are home builders

or remodelers, and constitute 80% of all homes

constructed in the United States. The remaining

members are associates working in closely related

fields within the housing industry, such as mortgage

finance and building products and services.

NAHB is a vigilant advocate in the nation’s courts.

It frequently participates as a party litigant and

amicus curiae to safeguard the constitutional and

statutory rights and business interests of its

members and those similarly situated.

Counsel of record for all parties received notice at least

10 days prior to the due date of the amicus curiae’s intention to

file this brief. No counsel for a party authored this brief in

whole or in part, and no counsel or party made a monetary

contribution intended to fund the preparation or submission of

this brief. No person other than amicus curiae, its members,

or its counsel made a monetary contribution to its preparation

or submission.

1

2

SUMMARY OF ARGUMENT

Regulated communities – industries, municipalities,

and individuals – rely on federal agencies’ adherence

to statute and compliance with the Administrative

Procedure Act (APA) to produce effective regulation

that accounts for these communities’ real-world

experience. Congress sets the stage for permissible

agency action, and the cornerstone of the APA

process is the opportunity for the public to comment

on an agency’s proposed activity.

In this case, the U.S. Environmental Protection

Agency (EPA) has ignored both Congressional

directive and relevant public comments, causing

significant hardship and uncertainty for the affected

regulated industries. But the Petitioners are not

alone in this experience – amicus curiae NAHB has

also experienced situations, described in more detail

below, where agencies have failed to adhere to

statutory requirements or refused to consider

meaningful public input.

This Petition presents the Court with an

opportunity to ensure that agencies adhere to clear

Congressional mandates and accept relevant public

comment. Additionally, consideration of the U.S.

Court of Appeals for the District of Columbia’s use of

“extreme deference” is appropriate given the

particularly egregious application in this case.

3

ARGUMENT

I. REGULATED COMMUNITIES SUFFER

WHEN AGENCIES CANNOT BE HELD

ACCOUNTABLE BY CONGRESS AND THE

PUBLIC.

The Administrative Procedure Act (APA), 5 U.S.C. §

551 et seq. was enacted in 1946 to ensure that

regulated communities could maintain access to an

increasingly bureaucratic government as it

developed the laws and rules that govern our

activities. See U.S. Dept. of Justice, Attorney

General’s Manual on the Administrative Procedure

Act, 1947 (describing the basic purposes of the

APA) 2. While the administrative process can be

lengthy and burdensome, it is critical to ensuring

that those regulated retain a voice in how they are

regulated.

Two primary avenues by which regulated

communities exercise this voice – through their

elected representatives in Congress and through the

APA notice and comment process – are threatened

by EPA’s actions and the D.C. Circuit’s decisions in

Petitioners’ case.

A. When Agencies Fail to Follow the

Commands of Congress, Regulated

Communities Experience Uncertainty

NAHB wholeheartedly agrees with Petitioners that

“agencies must obey clear congressional commands,”

Available at https://fall.fsulawrc.com/

admin/1947coverhtml (last visited Jan. 30, 2020).

2

4

and that courts play a critical role in enforcing “the

line separating lawful exercise of delegated power

from unaccountable agency action.” Petition For A

Writ of Certiorari at 5, Valero Energy Corp. & Am.

Fuel & Petrochemical Mfrs., 2019 WL 7423389 (No.

19-835), (“Petitioners Brief”). Like Petitioners,

NAHB members have experienced regulatory

uncertainty and arbitrary outcomes caused when

agencies stray from statutory text.

For example, NAHB was a petitioner before this

Court in Utility Air Regulatory Group et al. v. EPA,

573 U.S. 302 (2014). It came as a surprise to many

that NAHB needed to litigate a Clean Air Act (CAA)

“prevention of significant deterioration” (PSD) rule

since home building has never been considered a

major stationary source or subject to CAA

permitting requirements. However, when EPA

interpreted the CAA to require PSD permits for

sources emitting more than 250 tons per year of

carbon dioxide, millions of putative new sources

became eligible for PSD regulation, including

apartment buildings and even some single family

homes. Id at 328. NAHB members were suddenly

thrown into a regulatory program that threatened

multi-year construction delays, devastating to an

industry dependent on financing mechanisms with

short timeframes. EPA’s proffered solution – to

raise the statutory limit through regulation – was in

reality of little assistance because of its legal

vulnerability.

Thus, EPA’s refusal to adhere to the clear direction

of Congress launched NAHB headlong into

expensive, protracted litigation. In the end, this

5

Court held that “EPA’s rewriting of the statutory

thresholds was impermissible” and “reaffirm[ed] the

core administrative-law principle that an agency

may not rewrite clear statutory terms to suit its own

sense of how the statute should operate.” Id. at 325,

328. Because of this Court’s holding NAHB’s

members were spared the need to navigate CAA

permitting that would have brought important

housing projects to a halt. But it never should have

made it that far.

The Occupational Safety & Health Administration’s

(OSHA) Final Rule to Improve Tracking of

Workplace Injuries and Illnesses, 81 Fed. Reg.

29,624 (May 12, 2016) (“Electronic Recordkeeping

Rule”) 3, provides another example of an agency that

has attempted to rewrite its statutory authority.

OSHA originally sought the electronic submission of

detailed employee injury information on workplace

incidents, but subsequently revamped the rule it

published in 2016 to require only a more general

report that does not divulge sensitive employee

health information. 84 Fed. Reg. 380 (Jan. 25, 2019).

However, OSHA decided to retain certain “antiretaliatory provisions” included in the original rule

designed in OSHA’s view to prevent employers from

After OSHA finalized the Electronic Recordkeeping

rule, NAHB and several other organizations challenged the

legality of the final rule, alleging, among other things, that the

Electronic Recordkeeping Rule exceeded OSHA’s statutory

authority, was arbitrary and capricious, and violated the APA.

See Complaint, National Association of Home Builders of the

United States, et al. v. Perez, et al., 2017 WL 75736 (No. 5:17cv-00009) (W.D. Okla. Jan. 4, 2017).

3

6

underreporting employee injuries.

1904.35(b)(1) and § 1904.36.

29

CFR

§

Moreover, OSHA asserted it had the authority to

issue citations to employers that engage in alleged

retaliatory activity, despite clear statutory

language. Section 11(c) of the Occupational Safety

and Health Act (OSH Act) specifies that the federal

district courts, not OSHA, have jurisdiction to hear

and decide such claims. 29 U.S.C. § 660(c)(2) (“In any

such action the United States district courts shall

have jurisdiction.”).

Once again, NAHB and its members face regulatory

uncertainty because an agency has deviated from

the language of the statute. Litigation in this matter

is currently at the district court level. It could

conceivably take years for NAHB to receive clarity,

especially if the lower courts fail to rein in the

agency’s unlawful action.

In Petitioners’ case, EPA has rewritten its statutory

obligations by ignoring altogether the requirement

to annually consider the make-up of obligated

parties. Instead, the agency made a one-time

determination that it has repeatedly refused to

reconsider, despite the statute’s clear directive.

Because NAHB has been – and continues to be –

injured by similar conduct from federal agencies,

NAHB urges this Court to hear Petitioners’ case.

7

B. When Agencies Shut Out Relevant

Information, Regulated Communities

Cannot Be Heard by Their Government

As Petitioners relay, EPA has repeatedly refused to

consider their comments concerning obligated

parties, despite the relevance of Petitioners’

comments to EPA’s request for input on why the

Renewable Fuels Program (RFS) is going terribly

awry. See Petitioners Brief at 8 (describing EPA’s

assessments that statutory volume targets were

“impossible to achieve.”) (internal citations omitted).

As with agencies’ failures to adhere to Congressional

directives, NAHB has also experienced agency

refusals to consider relevant, critical information

offered during public comment periods. Returning

to the Electronic Recordkeeping Rule, OSHA

explicitly refused to consider public comments

concerning

the

anti-retaliatory

regulatory

provisions the agency first adopted in 2016. In its

proposal to amend the 2016 rule to remove the

electronic recordkeeping requirements involving the

posting of individual injury information, OSHA

repeatedly stated that it “is only seeking comment

on the proposed changes to § 1904.41, and not on any

other aspects of part 1904.” 83 Fed. Reg. 36,494,

36,497, 36,500. However, OSHA’s assertion it has

authority to hear and decide anti-retaliation claims

is unchanged and remains a concern in the Final

Rule. Thus the agency deemed these comments

concerning § 1904.36 off-limits. NAHB is therefore

in the unenviable position – again – of having to

litigate OSHA’s refusal, at significant expense and

while OSHA continues its unlawful practice of

8

issuing citations in contravention of OSH Act

Section 11(c).

NAHB faced a more subtle twist on this issue when

EPA sought to bake a voluntary program into a final

rule with no notice to the public. In 2015, EPA

adopted the Clean Power Plan, a regulation

ostensibly governing greenhouse gas emissions from

power plants. Carbon Pollution Emission Guidelines

for Existing Stationary Sources: Electric Utility

Generating Units; Final Rule, 80 Fed. Reg. 64,662

(Oct. 23, 2015). Once again, NAHB’s members found

themselves drawn into the fray of a regulation that

by all appearances should not apply to home

building. EPA’s final rule left the door open to the

use of end-use energy efficiency for compliance with

the rule’s obligations. This is a key concern of

NAHB’s due to the expense of overly restrictive

energy efficiency building codes. Additionally, EPA’s

actions threatened successful voluntary state and

local end-use energy efficiency programs. These

programs are used by NAHB’s members to costeffectively deliver energy efficiency and utility cost

savings to home owners.

Moreover, the final rule contained a brand-new

program not previously proposed: the “Clean Energy

Incentive Program” (CEIP). 80 Fed. Reg. at 64,664.

(describing the CEIP in broad strokes and noting

that EPA will “address design and implementation

details . . . in a subsequent action.” Id. at 64,676).

EPA provided a little more information in its

proposed “Federal

Plan Requirements for

Greenhouse Gas Emissions from Electric Utility

Generating Units Constructed on or Before January

9

8, 2014; Model Trading Rules; Amendments to

Framework Regulations; Proposed Rule,” 80 Fed.

Reg. 64,966 (Oct. 23, 2015) (“Proposed Federal

Plan”). In this proposal, EPA described the CEIP as

being “outlined and initiated in the final [emission

guidelines].” Id. at 64,969. Additionally, a more

detailed request for information was very quietly

made through a posting on EPA’s website that was

circulated to a small number of organizations. See

EPA-HQ-OAR-2013-0602, National Association of

Home Builders’ Petition for Reconsideration of the

Carbon Pollution Emission Guidelines for Existing

Stationary Sources: Electric Generating Units, Dec.

22, 2015 (describing the now-defunct webpage and

NAHB’s lack of notice).

However, as EPA had already finalized the CEIP in

the final Clean Power Plan rule, NAHB was unable

in either post hoc proceeding to comment on whether

the CEIP should exist in the first place; whether it

tracked with EPA’s statutory authority; whether it

related to the regulatory purposes of the Clean

Power Plan; and the extent to which such a program

impacted NAHB’s interests. Instead, the CEIP was

a fait accompli, and NAHB was limited to providing

input on the specifics and logistics in a disjointed

and disorganized series of proceedings.

When the public is unable to comment fully and

provide federal agencies with pertinent information,

the final product will suffer. See, e.g., FCC v. Fox

Television Stations, Inc., 556 U.S. 502, 561-2

(2009)(Breyer, J., dissenting) (describing the FCC’s

failure to consider certain comments and citing to

ACLU v. FCC, 823 F.2d 1554, 1581 (D.C. Cir. 1987)

10

“Notice and comment rulemaking procedures

obligate the FCC to respond to all significant

comments, for the opportunity to comment is

meaningless unless the agency responds to

significant points raised by the public”) (emphasis

added)(internal citations omitted). The regulation

will not encompass the full needs of the communities

it governs and will ultimately be less successful.

Agencies are also obligated to consider relevant

information received from the public through notice

and comment rulemaking. See Motor Vehicle Mfrs.

Ass’n. of U.S., Inc. v. State Farm Mut. Automobile

Ins. Co., 463 U.S. 29, 43 (1983) (holding that “the

agency must examine the relevant data and

articulate a satisfactory explanation for its action

including a rational connection between the facts

found and the choice made.”) (internal citations

omitted). To be sure, there are public comments that

go beyond the scope of a proposed regulatory action.

But the Petitioners’ and NAHB’s comments are

clearly relevant and deserve consideration. In the

Petitioners’ case, its comments directly addressed

EPA’s request for comment on how to fix the RFS

program. And in NAHB’s case, its comments strike

directly at the action OSHA seeks to take. In the

example of the CEIP, NAHB sought to submit

comments on the origin of a brand new program

inserted for the first time into a final rule.

NAHB urges this Court to grant the petition to

ensure that agencies consider all relevant comments

brought before them.

11

II. PETITIONERS’ CASE EXEMPLIFIES WHY

THIS COURT SHOULD REJECT THE

NOTION OF “EXTREME DEFERENCE” IN

THE RULEMAKING CONTEXT.

A. “Extreme Deference” Has No Place in

APA Judicial Review

So-called “extreme deference” to administrative

agencies has its roots in Baltimore Gas & Electric

Co., et al. v. Natural Resources Defense Council, 462

U.S. 87 (1983). In that case, decided the year before

Chevron v. Natural Resources Defense Council, 467

U.S. 837 (1984), this Court held that because the

Nuclear Regulatory Commission had made

“predictions, within its area of special expertise, at

the frontiers of science . . . a reviewing court must

generally be at its most deferential.” 462 U.S. at 103.

To date, this Court has not relied heavily on

“extreme deference” – instead, this Court’s two-part

test in Chevron governs most litigation concerning

agency deference to statutory interpretations. See

467 U.S. at 842-3 (describing the two questions

confronting agencies when interpreting statutes:

first, whether Congress has directly spoken, and

second, if not, whether the “agency’s answer is based

on a permissible construction of the statute.”). In

Marsh v. Oregon Natural Resources Council, 490

U.S. 360 (1989), the Court returned briefly to

Baltimore Gas & Electric, recognizing the dispute

before it as “a classic example of a factual dispute

the resolution of which implicates substantial

agency expertise.” Id. at 376. While this Court cited

Baltimore Gas & Electric, the conclusion ultimately

drawn is simply that “we cannot accept respondents’

12

supposition that . . . the Corps’ decision ‘deserves no

deference.’ Accordingly, as long as the Corps’

decision . . . was not ‘arbitrary or capricious,’ it

should not be set aside.” Id. at 377. Thus, Chevron

analysis applied, and extreme deference did not play

a role in the outcome of the litigation.

Other federal Courts of Appeal have followed suit.

For example, the Sixth Circuit in TNS, Inc. v.

N.L.R.B., 296 F.3d 384 (6th Cir. 2002) cited

Baltimore Gas & Electric and reiterated the

proposition that “in general . . . scientific regulatory

agencies such as the NRC should be given extreme

deference within their area of expertise.” Id. at 398.

However, the court then declined to apply extreme

deference in that case. Id. at 399 (holding the Board

was not beholden to another agency’s conclusion).

Another example from the Seventh Circuit,

Bloomington Nat’l Bank v. Telfer, 916 F.2d 1305 (7th

Cir. 1990) described this Court’s holdings in

Baltimore Gas & Electric and Chevron, and

ultimately applied the Chevron test. Id. at 1309

(rejecting petitioner’s extreme deference argument

by finding the statute to be unambiguous under

Chevron).

Thus, while courts may occasionally cite to

Baltimore Gas & Electric or the need to be highly

deferential when a dispute turns on scientific fact

within the special expertise of the agency, most

courts nonetheless apply the level of deference

stipulated by Chevron’s step two. See, e.g.,

Southwestern Electric Power Co. v. U.S. EPA, 920

F.3d 999, 1028-9 (5th Cir. 2019) (applying Chevron

13

step two to a question of whether EPA’s “decision to

set surface impoundments as BAT for leachate is”

permissible under the statute); Secretary of Labor v.

Cranesville Aggregate Companies, Inc., 878 F.3d 25,

33 (2d Cir. 2017) (applying Chevron step two to

determine whether the OSH Act or Mine Act should

govern). These courts are correct in their

application.

The D.C. Circuit is the exception in its treatment of

Baltimore Gas & Electric, however. In a number of

cases, including the Petitioners’ case, it has

espoused the notion that “we give an ‘extreme degree

of deference’ to the EPA’s evaluation of ‘scientific

data within its technical expertise.’” American Fuel

& Petrochemical Mfrs. v. EPA, 937 F.3d 559, 574

(D.C. Cir. 2019)(internal citations omitted);

Mississippi Comm’n on Envtl. Quality v. EPA, 790

F.3d 138, 150 (D.C. Cir. 2015); Catawba County,

N.C. v. EPA, 571 F.3d 20, 41 (D.C. Cir. 2009). The

D.C. Circuit has also added an additional wrinkle to

extreme deference by deeming it particularly

important when reviewing “EPA’s administration of

the complicated provisions of the Clean Air Act.” Id.

As this Court has held numerous times, agency

deference is appropriate where a statute is

ambiguous and the agency’s interpretation is

“reasonable.” See Encino Motorcars, LLC v.

Navarro, 136 S. Ct. 2117, 2124 (2016).

In

determining the reasonableness of an agency’s

action, a number of factors come into play. For

example, the interpretation must be “reasonable in

light of the statute’s text and the overall statutory

scheme,” National Ass’n of Home Builders v.

14

Defenders of Wildlife, 551 U.S. 644, 666 (2007); it

must “rest[] on a consideration of the relevant

factors,” Michigan v. EPA, 135 S. Ct. 2699, 2706

(2015) (citing Motor Vehicle Mfrs. Ass’n, 463 U.S. at

43); and an agency’s interpretation must not “bring

about an enormous and transformative expansion in

[the agency’s] regulatory authority without clear

congressional authorization.” Utility Air, 573 U.S. at

324. Courts have long rationalized this deference as

resulting from the agency’s “specialized knowledge”

See, e.g., Thomas Jefferson University v. Shalala,

512 U.S. 504, 512 (1994) (describing the deference

due to agencies where the regulation involves a

“highly technical regulatory program” and the

evaluation of criteria requires “significant

expertise”(internal citations omitted)).

Most recently, in Kisor v. Wilkie, 139 S. Ct. 2400

(2019), this Court recognized in a different context

that “agencies (unlike courts) have ‘unique

expertise,’ often of a scientific or technical nature.”

Id. at 2413. However, these factors all support the

rationale for Chevron deference, not “extreme”

deference. Regardless of the subject matter, courts

still have an obligation to ensure that an agency’s

interpretation is reasonable – that it comports with

the statute and regulatory framework and considers

relevant factors.

The D.C. Circuit’s stated reliance on “extreme

deference” impermissibly adds an additional barrier

for parties to overcome when they challenge agency

action. It fosters the “reflexive” deference that this

Court has sought to discourage. Kisor, 139 S. Ct. at

2415. Even worse, it is particularly misplaced here,

15

where the D.C. Circuit deferred to an agency

interpretation based on knowledge far outside its

area of specialized expertise.

B. Even if “Extreme Deference” Exists, it is

Inapplicable Here

Even if the D.C. Circuit is correct that “extreme

deference” is warranted for “EPA’s evaluation of

‘scientific data within its technical expertise,’”

American Fuel & Petrochem., 937 F.3d at 574, a

proposition NAHB disputes, the facts of this case

make clear that the issues here fall well outside

EPA’s technical expertise.

As Petitioners explain in their brief, the RFS

program was established by statute with the goal of

increasing the production and use of renewable

fuels. Petitioners Brief at 5. The provision at issue

involves the point of obligation – which of the

entities listed in the statute (refineries, blenders,

distributors, and importers) should be designated

“obligated parties” and be required to acquire and

retire Renewable Identification Numbers (RINs).

Petitioners Brief at 6.

EPA’s area of specialized knowledge is dictated by

the statutes Congress has “entrusted to” its

administration. Chevron, 467 U.S. at 844; see also

Hydro Resources, Inc. v. EPA, 608 F.3d 1131, 1146

(10th Cir. 2010)(“Courts do not, however, afford the

same deference to an agency’s interpretation of a

statute lying outside the compass of its particular

expertise and special charge to administer.”). The

specialized expertise EPA is expected to maintain

16

involves matters of environmental science – air and

water pollutants, waste treatment, toxic substance

characteristics, for example. See, e.g., Hydro

Resources, 608 F.3d at 1146 (holding that EPA

should not receive deference where a statutory

provision did not “specially involv[e] environmental

regulation.”).

Thus, there is no science within the agency’s

expertise underpinning the decisions concerning

obligated parties. Even if one were to include “the

groping endeavors of . . . economics” as science,

Board of Regents of State Colleges v. Roth, 408 U.S.

564, 581 (1972)(Douglas, J., dissenting)(internal

citations omitted), economics is not within EPA’s

technical expertise. Extreme deference to EPA on an

economical quandary concerning the functioning of

fuel markets is therefore highly inappropriate.

17

CONCLUSION

This case presents an excellent opportunity for this

Court to consider agency adherence to statute,

responsiveness to public comment, and appropriate

bounds of “extreme deference.” NAHB respectfully

asks this Court to grant the petition.

Dated: February 3, 2020

AMY C. CHAI*

THOMAS J. WARD

NATIONAL ASSOCIATION

OF HOME BUILDERS

OF THE U.S.

1201 15th Street, N.W.

Washington, D.C. 20005

(202) 266-8200

achai@nahb.org

* Counsel of Record