90 F.4th 461
5th Cir.2024Background
- In 2020, the Department of Energy (DOE) created new classes of dishwashers and laundry machines with shorter cycle times, exempting them from existing energy and water use restrictions.
- The DOE, under the Biden administration, repealed these 2020 rules in January 2022, eliminating the new short-cycle appliance classes.
- Several states, led by Louisiana, challenged the repeal ("Repeal Rule") in the Fifth Circuit, claiming it was arbitrary, capricious, and outside DOE’s statutory authority.
- The states argued they were injured by losing the option to purchase faster appliances, which is an actionable injury under standing doctrine.
- The Fifth Circuit reviewed whether the DOE's rulemaking process complied with the requirements of the Administrative Procedure Act and relevant statutes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to Sue | States lost opportunity to buy faster appliances, which is a cognizable injury. | No injury because regulated products never entered the market. | States have standing; loss of choice is injury in fact. |
| DOE Authority over Water Use | DOE lacks statutory authority to regulate water use in dishwashers and washers. | DOE can regulate both energy and water use for appliances. | Ambiguous statutory support for water regulation, but court need not decide—other issues dispositive. |
| Arbitrary/Capricious Agency Action | DOE failed to properly consider appliance performance and substitution effects; ignored key evidence. | DOE claimed compliance with EPCA, and that it's sufficient its 2020 rules were allegedly illegal. | Repeal Rule arbitrary and capricious: failed to consider performance, alternatives, and relied on insufficient legal basis. |
| Agency's Consideration of Alternatives | DOE unlawfully repealed without considering less drastic alternatives to full repeal. | DOE's only option was repeal of the offending rules. | Agency must consider alternatives, per precedent—even if past action was unlawful. |
Key Cases Cited
- Clapper v. Amnesty Int'l USA, 568 U.S. 398 (standing: injury in fact required for federal court jurisdiction)
- Lujan v. Defs. of Wildlife, 504 U.S. 555 (standing: establishes injury in fact, traceability, redressability requirements)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (agency must acknowledge and reason through policy changes)
- SEC v. Chenery Corp., 318 U.S. 80 (agency action must be judged on contemporaneous reasons, not post hoc rationalizations)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29 (arbitrary and capricious standard under APA; agency must consider alternatives)
- DHS v. Regents of the Univ. of Cal., 140 S. Ct. 1891 (agency must consider alternatives to rescission even if prior action is unlawful)