Hunt Refining Company v. U.S. Environmental Protection AgencyHunt Refining Company v. U.S. Environmental Protection Agency
Case Information
*2 Before J ORDAN , L AGOA , and E D C ARNES , Circuit Judges.
E D C ARNES , Circuit Judge:
The Clean Air Act’s Renewable Fuel Standard (RFS) pro- gram requires most domestic oil refineries to blend a certain amount of renewable fuels into the transportation fuels they pro- duce each year. See 42 U.S.C. § 7545(o)(2). The program allows small refineries to petition the Environmental Protection Agency for an exemption from those blending requirements in cases where compliance would cause the refineries “disproportionate economic hardship.” Id. § 7545(o)(9)(B).
The EPA denied Hunt Refining Company’s petitions for hardship exemptions from the RFS program, and Hunt petitioned this Court for review. The EPA has moved to dismiss or transfer venue under the Clean Air Act’s judicial review provision, 42 U.S.C. § 7607(b)(1), contending that Hunt’s petitions should have been filed in the United States Court of Appeals for the District of Columbia. And they should have been.
I. In 2005 and 2007, Congress amended the Clean Air Act to establish the RFS program. See Energy Policy Act of 2005, Pub. L. No. 109-58, § 1501, 119 Stat. 594, 1067; Energy Independence and Security Act of 2007, Pub. L. No. 110-140, §§ 201–02, 121 Stat. 1492, 1519–28 (codified at 42 U.S.C. § 7545(o)). The program was part of a larger effort to “increase the production of clean renewable fuels.” Energy Independence and Security Act, preamble, 121 Stat. at 1492. Under the program, all gasoline sold in the United States must contain certain amounts of “renewable fuel, advanced bio- fuel, cellulosic biofuel, [or] biomass-based diesel.” 42 U.S.C. § 7545(o)(2)(A)(i).
Congress set the annual volume requirements for those re- newable fuels through 2022 and instructed the EPA to set the vol- ume requirements for years after 2022. § 7545(o)(2)(B)(i)–(ii). It also directed the EPA to promulgate regulations to ensure that the gasoline sold in the United States each year contains the required volumes of renewable fuel. § 7545(o)(2)(A)(i), (3)(B). In its im- plementing regulations, the EPA identified oil refineries and im- porters as the parties responsible for complying with the RFS pro- gram. 40 C.F.R. § 80.1406.
Concerned that the RFS obligations could unfairly burden small refineries, Congress gave all small refineries an exemption from the RFS program through 2010. 1 42 U.S.C. § 7545(o)(9)(A)(i); see HollyFrontier Cheyenne Refin., LLC v. Renewable Fuels Ass’n , 141 S. Ct. 2172, 2175–76 (2021). It directed the EPA to extend a small re- finery’s exemption for at least two more years if a study by the De- partment of Energy determined that the refinery “would be subject to a disproportionate economic hardship if required to comply” with the RFS program. 42 U.S.C. § 7545(o)(9)(A)(ii); see also 40 C.F.R. § 80.1441(e)(1). And Congress also provided that “[a] small refinery may at any time petition the [EPA] for an extension of the exemption . . . for the reason of disproportionate economic hard- ship.” 42 U.S.C. § 7545(o)(9)(B)(i).
Hunt Refining Company operates a small refinery in Tusca- loosa, Alabama. It has applied for a hardship exemption each year since 2011, and until 2018, the EPA had always granted Hunt the requested exemption.
1 A “small refinery” is “a refinery for which the average aggregate daily crude oil throughput for a calendar year . . . does not exceed 75,000 barrels.” 42 U.S.C. § 7545(o)(1)(K); see also 40 C.F.R. § 80.1401.
In 2019 the EPA acted on 36 hardship exemption petitions
for RFS compliance year 2018, granting 31 (including Hunt’s) and
denying five. Several refineries and a renewable fuel producer pe-
titioned the D.C. Circuit for review.
See Sinclair Wyo. Refin. Co. v.
EPA
, No. 19-1196 (D.C. Cir. filed Sept. 20, 2019). At the EPA’s re-
quest, the D.C. Circuit remanded the EPA’s decision on the 2018
exemption petitions so that the agency could reconsider the peti-
tions in light of intervening decisions from the Tenth Circuit,
Re-
newable Fuels Ass’n v. EPA
,
In April 2022 the EPA on remand from the D.C. Circuit de- nied all 36 hardship exemption petitions for compliance year 2018, concluding that none of the petitioning refineries had shown dis- proportionate economic hardship caused by compliance with the RFS program. In reaching its decision the EPA applied a revised interpretation of § 7545(o)(9) and a new economic theory that it determined was “applicable to all small refineries no matter the lo- cation or market in which they operate.”
In June 2022 the EPA issued a nearly identical decision that denied 69 pending hardship exemption petitions (including Hunt’s petitions for compliance years 2019, 2020, and 2021) for the same reasons.
Hunt petitioned this Court for review of the EPA’s April and June 2022 decisions denying its petitions. The EPA responded by moving to dismiss or transfer Hunt’s petitions to the D.C. Circuit.
II.
42 U.S.C. § 7607(b)(1) is the Clean Air Act’s judicial review
provision. It provides that challenges to “nationally applicable” fi-
nal actions taken by the EPA “may be filed only in” the United
States Court of Appeals for the District of Columbia, while chal-
lenges to “locally or regionally applicable” EPA final actions “may
be filed only in” the appropriate regional circuit court of appeals.
42 U.S.C. § 7607(b)(1). But if a locally or regionally applicable ac-
tion is “based on a determination of nationwide scope or effect,”
and if, in taking that action, “the [EPA] Administrator finds and
publishes that such action is based on such a determination,” a chal-
lenge to that action must be filed in the D.C. Circuit. 2 ;
see also
RMS of Ga., LLC v. EPA
,
The EPA contends that Hunt should have filed its petitions for review in the D.C. Circuit because the challenged denial actions either were “nationally applicable” or, if locally applicable, are “based on a determination of nationwide scope or effect” made and published by the EPA. See April 2022 Denial of Petitions for Small Refinery Exemptions Under the Renewable Fuel Standard 2 We need not decide whether 42 U.S.C. § 7607(b)(1) is a jurisdictional or venue provision. It is enough that Congress made the provision mandatory and that the EPA has asked us to follow it. See RMS of Ga., LLC v. EPA , 64 F.4th 1368, 1372 n.5 (11th Cir. 2023).
Program, 87 Fed. Reg. 24,300, 24,301 (Apr. 25, 2022) (publishing the EPA’s finding that the April 2022 denial action was “based on a determination of nationwide scope or effect”); Notice of June 2022 Denial of Petitions for Small Refinery Exemptions Under the Re- newable Fuel Standard Program, 87 Fed. Reg. 34,873, 34,874 (June 8, 2022) (publishing the same finding about the June 2022 denial action).
When deciding whether a final action is “nationally applica-
ble,” we begin by “analyzing the nature of the EPA’s action, not
the specifics of the petitioner’s grievance.”
RMS of Ga.
, 64 F.4th at
1372;
see also Sierra Club v. EPA
,
Looking to the “face” of the challenged denial actions,
see
RMS of Ga.
,
Second, and more importantly, the EPA denied the hardship
exemption petitions based on a new statutory interpretation and
analytical framework that is applicable to all small refineries no
matter their location or market.
See RMS of Ga.
,
Hunt insists that the denial actions were locally applicable
because, according to Hunt, § 7545(o)(9) requires that small refin-
ery hardship decisions be based on individualized assessments of
refinery-specific circumstances. The problem with that argument
is that as Hunt acknowledges, the EPA did not base its denials on
refinery-specific circumstances. In fact, Hunt complains in its brief
to us that the EPA violated the CAA by
not
making individualized
determinations and by ignoring refinery-specific evidence. It ap-
pears to us that in the denial actions the EPA did review the refin-
eries’ individual and market-specific evidence, but it determined
that evidence did not affect its overall economic analysis or conclu-
sions about the costs of RFS compliance. We must consider the
national applicability of the challenged actions based on what the
EPA actually did in the actions, not on what Hunt believes the EPA
should have done.
See generally RMS of Ga.
,
Hunt relies on two unpublished opinions from other circuits
involving challenges to EPA denials of multiple states’ State
Implementation Plans (SIPs) for their failure to comply with cer-
tain national ambient air quality standards.
See Texas v. EPA
, No.
23-60069 (5th Cir. May 1, 2023);
Kentucky v. EPA
, Nos. 23-3216 &
23-3225 (6th Cir. Jul. 25, 2023). In those cases the Fifth and Sixth
Circuits denied transfer, concluding that the SIP disapprovals were
locally or regionally applicable because the actions by their nature
regulated individual states.
See Texas
, No. 23-60069, at *10–11;
Ken-
tucky,
Nos. 23-3216 & 23-3225
,
at *5;
see also Am. Rd. & Transp.
Builders Ass’n v. EPA
,
Even if we gave any weight to unpublished opinions (includ- ing those from other circuits), the Texas and Kentucky opinions wouldn’t help Hunt. Unlike those two denial actions, the ones be- fore us in this case do not involve SIP approvals or disapprovals. And as discussed, unlike those two denial actions, the ones before us in this case were not based on any individual refinery’s specific circumstances or concerns. 3
3 In Texas the Fifth Circuit recognized that transfer to the D.C. Circuit would be appropriate where the EPA’s action “uniformly appl[ies] to a broad swath of” petitioners. See No. 23-60069, at *10.
We conclude that the April and June 2022 EPA decisions in
this case were nationally applicable and may be challenged only in
the D.C. Circuit. Even if they were only locally or regionally ap-
plicable, they were based on a determination of nationwide scope
or effect because they announced a new, universally applicable ap-
proach to evaluating hardship petitions, and the EPA published a
finding to that effect.
See
III. We are not alone in reaching that conclusion. The Third, Seventh, Ninth, and Tenth Circuits have all granted similar mo- tions by the EPA to dismiss or transfer petitions for review of the same denial actions to the D.C. Circuit. See Am. Refin. Grp., Inc. v. EPA , No. 22-1991 (3d Cir. Aug. 9, 2022); Am. Refin. Grp., Inc. v. EPA , No. 22-2435 (3d Cir. Sept. 23, 2022); Countrymark Refin. & Logistics, LLC v. EPA , No. 22-1878 (7th Cir. July 20, 2022); Countrymark Refin. & Logistics, LLC v. EPA , No. 22-2368 (7th Cir. Sept. 8, 2022); Calumet Mont. Refin., LLC v. EPA , Nos. 22-70124 & 22-70166 (9th Cir. Oct. 25, 2022); Wyo. Refin. Co. v. EPA , No. 22-9538 (10th Cir. Aug. 23, 2022); Wyo. Refin. Co. v. EPA , No. 22-9553 (10th Cir. Sept. 12, 2022).
The Fifth Circuit is the only circuit to have denied the EPA’s motions to transfer petitions for review of the April and June denial actions. See Calumet Shreveport Refin., LLC v. EPA , 86 F.4th 1121, 1130–33 (5th Cir. 2023). The two-member Calumet majority con- cluded that the challenged actions were locally or regionally appli- cable and not based on a determination of nationwide scope or ef- fect. It reached that conclusion after interpreting Fifth Circuit precedent to require that the applicability focus be on the “ legal ef- fect” of the actions. See id. at 1131–32 (citing Texas v. EPA , 829 F.3d 405, 419 (5th Cir. 2016)). The actions had no national legal effect, the majority reasoned, because they did not bind small refineries whose hardship petitions were not the subject of the actions. See id. And the EPA had to consider refinery-specific evidence, which meant the effect of the EPA’s determinations would not be the same for all refineries. See id. at 1132–33.
We find Judge Higginbotham’s dissent in Calumet more per- suasive. He pointed out that there is no basis in the text of 42 U.S.C. § 7607(b)(1) for considering an action’s “legal effect.” See id. at 1143–45 (Higginbotham, J., dissenting). Instead, the issue of stat- utory interpretation turns on the plain meaning of the words “na- tionally applicable,” which looks to “the location of the persons or enterprises that the action regulates.” Id. at 1143 (quotation marks omitted). That focus leads to the “inescapabl[e]” conclusion that the denial actions here are nationally applicable: “they apply one consistent statutory interpretation and economic analysis to small refineries nationwide.” at 1144–45. Like Judge Higginbotham, we can’t escape that conclusion.
And again, even if the actions were locally or regionally ap- plicable, we would disagree with the conclusion that they were not based on a determination of nationwide scope or effect. The EPA based its adjudications on a new statutory interpretation and eco- nomic analysis, and the scope or effect of that new approach is na- tionwide. See id. at 1145–46. Or, as Judge Higginbotham put it, “The scope and effect of these core determinations are nationwide, as they are applicable to all small refineries no matter the location or market in which they operate.” at 1145. We agree.
IV. As a protective measure, Hunt filed petitions for review of the April and June 2022 denial actions in the D.C. Circuit. See Hunt Refin. Co. v. EPA , No. 22-1132 (D.C. Cir. filed June 24, 2022); Hunt Refin. Co. v. EPA , No. 22-1194 (D.C. Cir. filed Aug. 8, 2022). Those petitions have been consolidated with other refineries’ challenges to the same agency actions and are currently being briefed on the merits. See Sinclair Wyo. Refin. Co. v. EPA , No. 22-1073 (D.C. Cir. June 15, 2023). So while we conclude that Hunt’s challenges to the denial actions must be heard in the D.C. Circuit, instead of trans- ferring Hunt’s petitions it will be more efficient and save a step or two for us to grant the EPA’s motion to dismiss them. See, e.g. , Calumet Mont. Refin., LLC v. EPA , Nos. 22-70124 & 22-70166 (9th Cir. Oct. 25, 2022) (dismissing a refinery’s petitions for review of the April and June denial actions because the refinery separately filed petitions challenging the same denial actions in the D.C. Circuit).
THE PETITIONS FOR REVIEW ARE DISMISSED. L AGOA , J., Concurring L AGOA , Circuit Judge, Concurring:
I join the majority opinion in full. I write separately to clar-
ify a point of law that is featured in the parties’ arguments and to
rectify a bit of confusion arising from this Court’s dicta in
Sierra
Club v. Leavitt
,
As Judge Carnes thoroughly explains, 42 U.S.C. § 7607(b)(1) is the provision of the Clean Air Act that governs judicial review of challenges to actions taken by the Environmental Protection Agency (“EPA”). It provides that, where the agency action being challenged is “nationally applicable,” the petition for review “may be filed only in the United States Court of Appeals for the District of Columbia.” § 7607(b)(1). Conversely, where the agency action being challenged is “locally or regionally applicable,” § 7607(b)(1) provides that the petition for review “may be filed only in the United States Court of Appeals for the appropriate circuit,” i.e., the appropriate court of appeals based on location. Although this is relatively straightforward, things get slightly more complicated in the hybrid scenario. Specifically, § 7607(b)(1) provides that the pe- tition for review of “locally or regionally applicable” agency action “may be filed only in the United States Court of Appeals for the District of Columbia” if two conditions are met: (1) the agency ac- tion is “based on a determination of nationwide scope or effect”; and (2) “if in taking such action the Administrator [of the EPA] [found] and publishe[d] that such action is based on such a deter- mination.” L AGOA , J., Concurring
The issue is that, during a brief aside, this Court once blurred
the lines between these two conditions. In
Leavitt
, the Sierra Club
had asked us to review the EPA’s decision not to object to a permit
decision made by the Georgia Environmental Protection Division,
see
The Administrator’s judgment as to whether a locally or re- gionally applicable EPA action is based on a determination of na- tionwide scope or effect certainly bears a relationship with the sec- ond condition for exclusive judicial review in the D.C. Circuit, i.e., that the Administrator publishes a finding to that effect. § 7607(b)(1). But the Administrator’s judgment on this matter does not control the first condition for exclusive judicial review in the D.C. Circuit, i.e., that the agency action actually be “based on a de- termination of nationwide scope or effect.” For that prong to L AGOA , J., Concurring have any significance, courts surely must form their own judgment on the matter. By suggesting that it is entirely up to the Adminis- trator to judge whether an EPA action is based on such a determi- nation, the quoted language from Leavitt effectively collapsed both conditions into the second condition, thereby rendering the first condition superfluous. [1]
In any event, because
Leavitt
’s discussion of § 7607(b)(1) fo-
cused on hypothetical scenarios,
see
Notes
[1] The D.C. Circuit appears to have done the same in
Alcoa, Inc. v. E.P.A.
, No.
04-1189,