American Fuel & Petrochemical Manufacturers v. EPA
3f4th373
| D.C. Cir. | 2021Background:
- In June 2019 EPA promulgated the "E15 Rule," revising fuel-volatility regulations and RIN-market rules after a White House directive to allow year-round sale of E15 and increase RIN transparency. Section II of the Rule extended the statutory 1-psi Reid Vapor Pressure (RVP) waiver to fuels with "at least 9% and no more than 15%" ethanol by interpreting 42 U.S.C. § 7545(h)(4) to cover blends above 10% and by finding E15 "substantially similar" to E10 under § 7545(f)(1)(A).
- Historically Congress codified a 1-psi summertime RVP allowance for "blends containing gasoline and 10 percent . . . ethanol" (E10); EPA had previously limited the waiver to ~9–10% ethanol and had declined to apply it to E15 in 2010–2011 waivers.
- Petroleum industry groups and small retailers challenged Section II; AFPM (a trade association) brought suit on behalf of members Motiva and Sinclair, alleging competitive injury from expanded E15 sales.
- The court found AFPM had associational standing because Motiva and Sinclair demonstrated competitor standing (increased competition and likely redress via vacatur).
- On the merits the court held EPA’s interpretation of § 7545(h)(4) (treating "containing 10% ethanol" as a floor that includes >10%) was contrary to the statute’s text, context, and history and therefore beyond EPA’s authority.
- The court severed and vacated Section II of the E15 Rule and dismissed the remaining petitions as moot (EPA had stated Sec. II was not severable from its substantial-similarity action, but Sec. II was severed from other parts of the rule).
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 7545(h)(4)’s 1-psi waiver applies to E15 (blends >10% ethanol) | § 7545(h)(4) unambiguously refers to E10 only; EPA cannot extend waiver to E15 | "Contain" is ambiguous and may be read as "contain at least 10%," so EPA’s interpretation is reasonable | Court: Text, structure, and history show § 7545(h)(4) refers to E10; EPA exceeded statutory authority — vacated Sec. II |
| Standing of AFPM (associational standing via members) | AFPM’s members (Motiva, Sinclair) will suffer competitive injury from expanded E15 sales | EPA contests injury/redressability | Court: AFPM has associational standing; Motiva and Sinclair show competitor injury and redressability under Lujan and Nat’l Biodiesel framework |
| Validity of EPA’s substantial-similarity determination under § 7545(f)(1)(A) | Petroleum: EPA lacked authority to make a partial determination; its finding that E15 is substantially similar is arbitrary | EPA: substantial-similarity finding supports waiver extension | Court: Did not reach merits of § 7545(f)(1)(A) because § 7545(h)(4) ruling disposes of Sec. II |
| Regulatory Flexibility Act (Small Retailers Coalition) | EPA’s small-business certification was inadequate; vacatur required | EPA: certification was reasonable | Court: Challenge dismissed as moot after vacatur of Sec. II |
Key Cases Cited
- Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (framework for judicial review of agency statutory interpretation)
- Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements)
- Nat’l Biodiesel Bd. v. EPA, 843 F.3d 1010 (D.C. Cir. 2016) (competitor standing doctrine for industry challengers)
- Ethyl Corp. v. EPA, 51 F.3d 1053 (D.C. Cir. 1995) (overview of CAA fuel-and-additives regulatory scheme)
- Am. Methyl Corp. v. EPA, 749 F.2d 826 (D.C. Cir. 1984) (statutory context on fuel-additive regulation)
- City of Arlington v. FCC, 569 U.S. 290 (2013) (statutory ambiguity assessed in regulatory context)
- Barnhart v. Sigmon Coal Co., 534 U.S. 438 (2002) (interpretive significance of deliberate statutory omissions)
- North Carolina v. FERC, 730 F.2d 790 (D.C. Cir. 1984) (severability analysis for agency rules)