NATIONAL BIODIESEL BOARD, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
No. 15-1072
United States Court of Appeals, District of Columbia Circuit.
Decided December 20, 2016
Consolidated with 15-1073. Argued October 27, 2016
Finally, the company‘s attempt to argue that its violations for unilaterally restricting union agents’ access to its Edith Service Center and San Juan Generating Station are moot in light of its agreement to restore the agents’ access to those facilities, Pet‘r‘s Reply Br. 4-5, is doubly flawed: the argument is first raised in the company‘s reply brief without explanation, see, e.g., Al-Adahi v. Obama, 613 F.3d 1102, 1111 n.6 (D.C. Cir. 2010), and an “employer‘s compliance with an order of the Board does not render the cause moot,” NLRB v. Mexia Textile Mills, 339 U.S. 563, 567 (1950).
Accordingly, because the Board is entitled to enforcement of the unchallenged violations, see Parsippany Hotel Mgmt. Co. v. NLRB, 99 F.3d 413, 418 (D.C. Cir. 1996), and of its Order remedying them, Allied Mech. Servs., Inc. v. NLRB, 668 F.3d 758, 765 (D.C. Cir. 2012), we deny the petition for review and grant the Board‘s cross-application for enforcement of its Decision and Order.
Perry M. Rosen, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief was John C. Cruden, Assistant Attorney General, and Susan Stahle, Of Counsel, U.S. Environmental Protection Agency.
Before: TATEL, BROWN, and KAVANAUGH, Circuit Judges.
TATEL, Circuit Judge:
Petitioner, a trade association representing the domestic biofuel industry, challenges the Environmental Protection Agency‘s decision to allow a group of Argentine biofuel producers and other companies to use certain recordkeeping practices in connection with sales of their
I.
Established by Congress in 2005, the Renewable Fuel Standard (RFS) program requires transportation fuel—the kind used in cars and sold at gas stations—to include specific amounts of “renewable fuel” made from planted crops, trees, animal waste, algae, or other alternatives to traditional fossil fuels. Energy Policy Act of 2005, Pub. L. No. 109-58, § 1501, 119 Stat. 594 (codified as amended at
In order to accomplish this objective, Congress defined “renewable fuel” as “fuel that is produced from renewable biomass” and specified that “renewable biomass” means, as relevant here, “[p]lanted crops and crop residue harvested from agricultural land cleared or cultivated at any time prior to December 19, 2007, that is either actively managed or fallow, and nonforested.”
To implement the RFS program, the statute directs EPA to “promulgate regulations to ensure that gasoline sold or introduced into commerce in the United States... contains the applicable volume of renewable fuel,”
Renewable fuel is made from plant material, known as feedstock, typically sent from farms to grain elevators, then to crushers, and eventually to fuel producers, who transform it into renewable fuel. Biofuel produced abroad and intended for use by domestic refiners—the subject of this litigation—is often sent from producers to importers, who then sell the renewable fuel for incorporation into domestic transportation fuel.
Under the RFS program, producers and importers of renewable fuel generate “Renewable Identification Numbers” (RINs)—codes that correspond to batches of fuel. See
In 2010, EPA promulgated a final rule that imposes recordkeeping requirements on RIN-generating producers and importers in order to verify that crops used in renewable fuel production come from qualified land, i.e., land in cultivation prior to December 19, 2007. 75 Fed. Reg. at 14,699-701;
The first, individual tracking, requires producers or importers to keep, but not provide to EPA unless requested, (1) “[m]aps or electronic data identifying the boundaries of the land” where each type of feedstock was harvested, (2) “commercial documents showing the quantity of feedstock purchased from each area ... and showing each transfer of custody from the location where it was produced to the renewable fuel production facility,” and (3) records sufficient to verify that the feedstock came from land cleared or cultivated prior to December 19, 2007, such as sales records.
The second option, aggregate compliance, excuses from recordkeeping requirements “any producer or RIN-generating importer” in a country subject to an approved aggregate compliance plan.
A third option—the one at issue here—is the alternative tracking requirement.
In 2012, the Argentine Chamber of Biofuels (CARBIO), a nonprofit association of biodiesel producers, soybean growers, warehouses, and oil-crushing mills, submitted a comprehensive survey program for EPA‘s approval as an alternative tracking program. In considering the application, EPA required CARBIO to answer many questions about its proposal and submit additional materials in the form of seven addenda. Some two-and-a-half years later, EPA approved the application, finding that CARBIO‘s proposal satisfied section 80.1454(h)‘s requirements.
The plan works like this. Using historical satellite images, CARBIO begins by identifying land cleared or cultivated prior
On November 13, 2013, while EPA was considering CARBIO‘s proposal, Petitioner National Biodiesel Board (NBB) sent a letter to EPA expressing concern about the viability of enforcing an alternative tracking program abroad and requesting that EPA “provide the public with notice and comment on any proposed survey plan for foreign feedstocks and production before EPA takes any action.” On January 27, 2015, EPA approved the CARBIO proposal and responded to NBB, explaining that “[g]iven the significant notice and comment process used to develop [the recordkeeping] regulations,” the agency “d[id] not find it appropriate to create additional notice and comment processes for each plan approval as you suggested in your letter.”
NBB then filed these petitions for review. In case number 15-1073, Petitioner seeks review of the 2010 Rule that established the alternative tracking program. 75 Fed. Reg. 14,670. In case number 15-1072, Petitioner challenges EPA‘s approval of CARBIO‘s alternative tracking proposal. We consolidated the cases and heard them together at oral argument.
II.
EPA offers a threshold objection to the petitions for review—that NBB lacks Article III standing. In response, NBB asserts that it has standing on behalf of its members: domestic producers who will suffer injury as a result of increased competition from Argentine biodiesel.
Article III standing requires “injury in fact” that is “actual or imminent” and “fairly ... trace[able] to the challenged action of the defendant” as well as “likely ... redress[able] by a favorable decision,” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal citations and quotation marks omitted). Under the doctrine of competitor standing, economic actors “suffer constitutional injury in fact when agencies lift regulatory restrictions on their competitors or otherwise allow increased competition.” Louisiana Energy and Power Authority v. FERC, 141 F.3d 364, 367 (D.C. Cir. 1998). An association, such as NBB, may represent the interests of its members if—the issue here—“at least one of [its] members has standing to sue in [its] own right.” See American Library Association v. FCC, 401 F.3d 489, 492 (D.C. Cir. 2005).
This case differs little from Delta Construction v. EPA, 783 F.3d 1291 (D.C. Cir. 2015) (per curiam), in which we held that an importer and seller of a vegetable-based fuel suffered constitutional injury as a result of “EPA regulations that incentivize[d] other renewable fuels like electricity sold by its competitors.” Id. at 1299. Here it is “self-evident” that NBB members meet the constitutional prerequisites of injury, causation, and redressability, as approval of the CARBIO plan incentivizes importation of renewable fuels that will compete with domestic production, and an order vacating that approval would eliminate the resultant competitive harm. Id. at
With standing established, we turn to Petitioner‘s challenges.
III.
We begin with NBB‘s attack on section 80.1454(h), which EPA promulgated in 2010. 75 Fed. Reg. 14,670. EPA argues that the challenge is untimely.
Section 307(b)(1) of the Clean Air Act provides that a petition for review of any nationally applicable regulations:
shall be filed within sixty days from the date notice of such promulgation, approval, or action appears in the Federal Register, except that if such petition is based solely on grounds arising after such sixtieth day, then any petition for review under this subsection shall be filed within sixty days after such grounds arise.
First, NBB notes that section 307(b)(1)‘s provision for judicial review after the initial sixty days “if such petition is based solely on grounds arising after,”
On this point, NBB relies on our decision in Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 129-32 (D.C. Cir. 2012), aff‘d in part, rev‘d in part sub nom. Utility Air Regulatory Group v. EPA, 573 U.S. 302, 134 S.Ct. 2427, 189 L.Ed.2d 372 (2014), in which we held that section 307(b)(1) did not bar industry petitioners’ challenge to a longstanding EPA program when a new rule expanded the program “to never-regulated sources” operated by those industries. Id. at 130. The new rule gave petitioners “newly ripened” claims against the program because, as we explained, prior to its expansion the prospect that the program would injure petitioners was too speculative to confer jurisdiction on the court. Id. at 131. Here, in stark contrast, NBB members were subject to the Rule on day one, which is why NBB both participated in the rulemaking process and intervened in litigation challenging the Rule. Instead of defending the Rule, NBB members could have argued then that the Rule‘s recordkeeping requirements were insufficient to protect against the importation of nonqualified renewable fuel. Because NBB was well positioned to challenge the Rule on these grounds when it was first promulgated, the CARBIO plan conferred on NBB no “newly ripened” claim. See Sierra Club de Puerto Rico v. EPA, 815 F.3d 22, 26-28 (D.C. Cir. 2016) (explaining that Coalition left unchanged the principle that mere application of a regulation, “without anything more,” falls short of “after-arising grounds.“).
NBB next argues that its challenge is timely because EPA “reopened” the Rule when it approved the CARBIO proposal. The reopener doctrine allows an otherwise untimely challenge to proceed “where an agency has—either explicitly or implicitly—undertaken to ‘reexamine its former choice.‘” National Mining Association v. Department of the Interior, 70 F.3d 1345, 1351 (D.C. Cir. 1995) (quoting Public Citizen v. Nuclear Regulatory Commission, 901 F.2d 147, 151 (D.C. Cir. 1990)). The CARBIO proposal is, the argument goes, a “constructive” reopening of the Rule, which “occurs if the revision of accompanying regulations ‘significantly alters the stakes of judicial review’ as the result of a change that ‘could have not been reasonably anticipated.‘” National Resources Defense Council v. EPA, 571 F.3d 1245, 1266 (D.C. Cir. 2009) (per curiam) (quoting Sierra Club v. EPA, 551 F.3d 1019, 1025 (D.C. Cir. 2008)). We have described the magnitude of alteration required to invoke this doctrine as a “sea change,” and have declined to apply it when “the basic regulatory scheme remains unchanged.” Id. As the Rule expressly establishes that foreign producers may seek approval of an alternative tracking program, the CARBIO plan neither alters that regulatory framework nor works a change that NBB members could not have reasonably anticipated. To the extent NBB argues that the CARBIO proposal is out of line with the Rule, this is—yet again—a challenge to EPA‘s application of the Rule rather than to the Rule itself.
For these reasons, NBB‘s petition for review of the Rule is untimely under section 307(b)(1) and is, accordingly, dismissed.
IV.
We now turn to the heart of this case—whether EPA erred when it approved the CARBIO plan. NBB challenges EPA‘s action on both procedural and substantive grounds.
With respect to procedure, NBB contends that EPA erred when it approved the CARBIO plan via informal adjudication without public notice and comment. As a general matter, “agencies have ‘very broad discretion whether to proceed by way of adjudication or rulemaking.‘” Qwest Services Corp. v. FCC, 509 F.3d 531, 536 (D.C. Cir. 2007) (quoting Time Warner Entertainment Co. v. FCC, 240 F.3d 1126, 1141 (D.C. Cir. 2001)). Not only does the Rule do nothing to fetter this discretion, but it expressly requires public notice and comment for country-wide aggregative compliance applications, see
NBB insists that EPA‘s approval of the CARBIO proposal was, in effect, a rule that required notice and comment, not an adjudication, because the plan “provides a new set of substantive standards for future conduct, indefinitely applying to a large number of entities,” involves “several policy determinations,” and leaves “key facts ... unresolved.” Reply 11-12. But we need not meditate on the sometimes-fuzzy line between rulemaking and informal adjudication because EPA‘s approval of the
On to NBB‘s substantive objection: that approval of the CARBIO plan was arbitrary and capricious. Our standard of review under the Clean Air Act is the same as under the Administrative Procedure Act,
NBB contends that EPA‘s approval of the CARBIO proposal was arbitrary and capricious because the plan fails to comply with the alternative tracking requirements set out in
A.
NBB first argues that the CARBIO plan is out of sync with the Rule because it fails to include importers. As designed, the CARBIO proposal tracks the fuel supply chain from farm through biodiesel production, but not thereafter. As NBB points out, however, section 80.1454(h) appears to suggest, in three places, that a survey plan must include producers and importers.
EPA responds that the best reading of section 80.1454(h) is that only an alternative tracking plan sponsored by RIN-generating importers needs to include importers, whereas the CARBIO proposal is sponsored by RIN-generating producers. “[W]e review an agency‘s interpretation of its own regulations with ‘substantial deference.‘” In re Sealed Case, 237 F.3d 657, 667 (D.C. Cir. 2001) (quoting Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994)). Even without that deference, however, we can readily adopt EPA‘s interpretation given our obligation to “read ... words ‘in their context and with a view to their place in the overall scheme.‘” King v. Burwell, 576 U.S. 473, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)).
Section 80.1454(h) specifies that “[a]ny foreign or domestic renewable fuel producer or RIN-generating importer” may adopt an alternative tracking requirement. (emphasis added). Elaborating, section 80.1454(h)(1) states that “a renewable fuel producer or importer” must sponsor an independent survey plan in order to comply. (emphasis added). The Rule thus provides that either RIN-generating producers or RIN-generating importers may sponsor an alternative tracking plan, and, by implication, without participation from the other. Given that the purpose behind these recordkeeping provisions is to ensure that entities generating RINs can produce the records needed to verify that renewable fuel comes from qualified land, we agree with EPA that little additional value would flow from requiring a producer, once it has generated the RIN and possesses those records, to continue monitoring its product downstream. By contrast, if an importer is the RIN-generating entity, then biofuel producers are upstream, and an importer can only possess the necessary documentation if it has tracked the product from the farm to its doors. This second scenario is, EPA explains, why the three provisions cited by NBB inelegantly refer to producers and importers. Respondent‘s Br. 50-51.
Additional textual clues favor EPA‘s view. For one thing, as EPA points out, the alternative tracking program is open to any “foreign or domestic renewable fuel producer.”
Second, the alternative tracking approach must “achieve at least the same level of quality assurance” as individual tracking.
Third, as EPA observes, the regulation‘s preamble includes not a single reference to importers. According to EPA, this demonstrates that it “envisioned [alternative
Fourth, reading the regulation in EPA‘s preferred manner creates no gap in the regulatory scheme. Approval of an alternative tracking plan only allows participating entities to avail themselves of section 80.1454(h)‘s recordkeeping provisions. Non-participating entities, like RIN-generating importers, remain subject to section 80.1454(c)(1)‘s individual tracking requirements, as well as to other regulatory provisions that stand independent of the recordkeeping measures in section 80.1454. See, e.g.,
Taken together, these features of the regulation demonstrate that the CARBIO plan‘s omission of importers is consistent with the best reading of the Rule.
B.
NBB‘s second argument rests on the Rule‘s requirement that an alternative tracking plan must be “[d]esigned to achieve the same level of quality assurance” as the individual tracking and aggregate compliance options.
One such feature is the plan‘s use of satellite technology to identify land cleared or cultivated prior to 2007, a methodology NBB calls too “untested” and ill-defined to provide the requisite level of quality assurance. For several reasons, this claim fails on the launch pad.
For one thing, under the regulation, the CARBIO plan must provide “the same level of quality assurance” as the individual and aggregate compliance approaches.
In any event, we can hardly imagine a more appropriate occasion to defer to EPA‘s expert judgment than its assessment of whether a particular satellite methodology can accurately measure environmental change. Indeed, Petitioner has identified no basis in the record to upset the agency‘s conclusion as to CARBIO‘s use of satellite technology.
The CARBIO proposal includes 23 pages explaining its methodology. Relying predominantly on images collected by NASA‘s Landsat program, the plan takes electromagnetic data gathered by sensors on Landsat satellites and then employs algorithms to transform that data into categories of land use. EPA is well-positioned to evaluate the proposal‘s technical feasibility, as the agency itself uses satellite data to measure international land-use changes as part of its analysis of lifecycle greenhouse-gas emissions in the Renewable Fuel Standard program. See EPA, Renewable Fuel Standard Program Regulatory Impact Analysis, 317 (2010). Moreover, the Landsat program is, since the launch of its first satellite in 1972, “the longest continuous space-based record of Earth‘s land in existence.” NASA, About Landsat, http://landsat.gsfc.nasa.gov/?page_id=2. Today, the program produces images capable of spotting “[w]hen a new road appears in the dense forests
NBB believes that the land categories adopted in the plan will result in the misclassification of native forests as qualified land. But the proposal classifies native forests as “other vegetation” and specifies that “go areas” will exclude that category. Without context, NBB‘s passing reference to the plan‘s treatment of wetlands provides an insufficient basis to set the agency‘s action aside. Petitioner‘s Br. 42-43. The plan requires CARBIO—not the independent surveyor—to identify go areas. Yet nothing in the Rule precludes such an arrangement and, for good measure, the proposal specifies that a third party will verify its maps on an annual basis.
NBB separately contends that the plan‘s reliance on satellite imagery to verify historical land use runs afoul of the Rule‘s requirement that the independent surveyor “[o]btain the records and product transfer documents associated with the feedstocks being audited.”
NBB also takes issue with the plan‘s use of waybills. Under the plan, waybills are inspected to ensure feedstock was sent from a zip code that matches an identified go area. If ineligible land falls within a zip code, no feedstock from that zip code may qualify.
NBB thinks this system is inadequate because waybills display only whether feedstock was shipped from a qualifying zip code, so shipments made from qualifying land could contain unqualified feedstock. In other words, NBB fears that qualified land might launder unqualified feedstock. But any concern about feedstock laundering is equally present under the individual tracking regime and, as noted above, CARBIO‘s proposal need achieve only the “same level of quality assurance” as individual tracking.
In a related argument, NBB contends that the CARBIO plan fails to explain how it will prevent mixing of qualified and unqualified feedstock. Again, however, NBB never explains how the CARBIO plan is any more deficient in this respect than the individual tracking regime—the relevant question. Moreover, the CARBIO plan provides, with no direct analogue under the individual tracking provision, for use of a “mass balance” approach, which ensures that RINs are only generated in proportion to the quantity of qualified biomass. Additional regulatory requirements—independent of the recordkeeping provisions at issue—impose a responsibility to segregate
Having been given no basis to disturb EPA‘s conclusion that the CARBIO plan is “[d]esigned to achieve the same level of quality assurance” as the individual tracking and aggregate compliance regimes, we move on to NBB‘s final challenge.
C.
Under section 80.1454(h)(2)(iii), “annual compliance surveys ... must be ... [r]epresentative of all renewable fuel producers and importers in the survey area and representative of their feedstock suppliers.” Elaborating, the Rule states that the “survey program must include a statistically supportable methodology.” 75 Fed. Reg. at 14,670. Because the CARBIO proposal does not identify the survey area and all of the feedstock suppliers in advance, NBB argues, EPA failed to “rationally” assess whether the CARBIO program will use a sampling methodology that is “representative” of the feedstock suppliers. Petitioner‘s Br. 35-38.
This challenge misses the regulation‘s distinction between survey plans and surveys. See, e.g.,
NBB‘s theory—that EPA may not approve an alternative tracking program without knowing the full population of feedstock suppliers in advance—scrambles the sequence envisioned in the regulation. Moreover, it is unclear why EPA must know the precise universe of feedstock suppliers in the survey in order to determine, in advance, whether a methodology for conducting those surveys is acceptable.
NBB separately questions whether CARBIO‘s plan to use a “random sampling methodology with probability proportional to size (PPS) of feedstock amounts supplied for biodiesel production” is a proper statistical methodology. Given our highly deferential standard of review, however, we are more likely to brew renewable fuel ourselves than second-guess the EPA‘s determination on this highly technical point based on a fleeting attack by the challenger.
V.
For the foregoing reasons, we dismiss the petition in case number 15-1073 and deny the petition in case number 15-1072.
So ordered.