362 F. Supp. 3d 126
S.D. Ill.2019Background
- DOE promulgated amended test procedures for central air conditioners and heat pumps in 2016 to address "split systems" and unmatched outdoor units, with a compliance date of July 5, 2017.
- Johnson Controls, Inc. (JCI) marketed unmatched outdoor units using R-407C compatible with banned R-22 systems; JCI challenged the Rule and sought administrative relief from DOE (extension, waiver, stay) and filed for review in the Seventh Circuit.
- DOE twice postponed the Rule's effective date in early 2017 and then issued an administrative stay (Delay Rule) in July 2017 delaying the R-407C provisions; the Delay Rule was filed with the Federal Register after the Rule’s scheduled effective date.
- NRDC sued in September 2017 challenging DOE's Section 705 stay as arbitrary, capricious, and procedurally defective under the APA; DOE later lifted the Delay Rule and granted JCI an interim waiver, then sought dismissal as moot.
- The Court ordered supplementation of the administrative record to include the Federal Register notice for the Delay Rule, concluded it retained jurisdiction, and reviewed the Delay Rule under the APA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court has jurisdiction given parallel Seventh Circuit litigation | NRDC: separate action; court can review DOE's stay | DOE: entanglement with Seventh Circuit means lack of jurisdiction; move to transfer | Held: Jurisdiction proper; issues distinct from Seventh Circuit challenge |
| Mootness after DOE lifted Delay Rule and granted interim waiver | NRDC: voluntary cessation doctrine; replacement waiver is similar and recurrence likely | DOE: lifting the Delay Rule and granting waiver eliminates live controversy | Held: Not moot—DOE failed heavy burden to show no reasonable expectation of recurrence and effects not eradicated |
| Whether Section 705 stays are committed to agency discretion and unreviewable | NRDC: Section 705 is reviewable; courts can assess reasoned explanation and procedure | DOE: "justice so requires" is broad and unreviewable discretion | Held: Section 705 stays are reviewable; not committed to agency discretion by law |
| Whether DOE’s Delay Rule was arbitrary, capricious, or procedurally defective | NRDC: DOE provided a conclusory one‑sentence rationale, ignored record objections, failed to apply stay factors, and issued stay after Rule effective date | DOE: exercised broad discretion to postpone; administrative stay appropriate | Held: Delay Rule arbitrary and capricious; DOE failed to give reasoned explanation, did not address counterarguments, did not apply stay standard, and issued the Delay Rule after the Rule was effective |
Key Cases Cited
- Friends of the Earth v. Laidlaw Envtl. Servs., 528 U.S. 167 (U.S. 2000) (voluntary cessation does not automatically moot a case)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (agency must provide a reasoned explanation; review for arbitrary and capricious action)
- Webster v. Doe, 486 U.S. 592 (U.S. 1988) (example of statute committing action to agency discretion in national security context)
- Nat. Res. Def. Council v. Abraham, 355 F.3d 179 (2d Cir. 2004) (publication in the Federal Register as culminating event in rulemaking)
- Mhany Mgmt., Inc. v. County of Nassau, 819 F.3d 581 (2d Cir. 2016) (defendant bears heavy burden to show voluntary cessation moots case)
- Granite State Outdoor Advertising, Inc. v. Town of Orange, 303 F.3d 450 (2d Cir. 2002) (two-part test for mootness after voluntary cessation)