VALERO ENERGY CORPORATION v. ENVIRONMENTAL PROTECTION AGENCY
No. 18-1028
Unitеd States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 8, 2018 Decided June 25, 2019
On Petition for Review of an Action of the United States Environmental Protection Agency
Samara L. Kline argued the cause for petitioner. On the briefs were Clara Poffenberger, Lisa M. Jaeger, Brittany M. Pemberton, Warren W. Harris, Yvonne Y. Ho, and Christopher L. Dodson. Megan H. Berge, Vincent M. Wаgner, and Evan
Before: HENDERSON, ROGERS, and SRINIVASAN, Circuit Judges.
Opinion for the Court filed by Circuit Judge SRINIVASAN.
SRINIVASAN, Circuit Judge: The Energy Independence and Security Act of 2007 contains a citation to nowhere. The Aсt requires gasoline sold in the United States to include a certain amount of renewable fuel, and tasks the Environmental Protection Agency with conducting periodic reviews to enable appropriate adjustments to the renewable-fuel requirements. In setting out EPA‘s periodic-review obligation, the statute directs the agency to examine certain requirements ostensibly set out in a referenced provision of the Clean Air Act. The cited provision, though, does not exist.
In an effort to make sense out of nonsense, EPA issued a document setting forth its interpretation of the periodic-review provision and еxplaining why it believes it has complied. Valero Energy Corporation, a petroleum refiner, took issue with EPA‘s position in the document and filed a petition for review in this court. We conclude that the EPA document does not constitute final agency action. We therefore dismiss Valero‘s petition for lаck of jurisdiction.
I.
A.
In 2005 and 2007, Congress amended the
To ensure that gasoline sold in the United States meets those standards, EPA requires refiners (and importers) of gasoline to include a minimum amount of renewable fuel in their gasoline. The required annual volumes for each renewable fuel are prescribed in statutory tables. See
In addition, the statute directs EPA to conduct “periodic reviews” of the program “[t]o allow for the appropriate adjustment” of the minimum total volumes for each renewable fuel.
B.
In November 2017, EPA published a document entitled “Periodic Reviews for the Renewable Fuel Standard Program.” The first of the document‘s two parts addresses the agency‘s obligations under the
the reference to “subsection (a)(2)” renders the provision “unintelligible” and thus partially “inoperative.”
In the alternative, EPA sets forth its best attempt to give content to
In the second part of the document, EPA explains why, under either interpretation of the erroneous cross-reference, its prior actions have fulfilled its statutory obligation to conduct periodic reviews. See
studies in this document require any party or the agency to do (or not do) anything beyond what the statute requires.”
C.
In January 2017, ten months before publication of the EPA document, petitioner Valero Energy Corporation sued EPA in the Northern District of Texas. Among other claims, Valero contended that
II.
We start (and end) with the question of finality. The
under the APA, see Sierra Club v. EPA, 873 F.3d 946, 951 (D.C. Cir. 2017). Under the
An agency action is final “if two independent conditions are met: (1) the action marks the consummation of the agency‘s decisionmaking process and is not of a merely tentative or interloсutory nature; and (2) it is an action by which rights or obligations have been determined, or from which legal consequences will flow.” Soundboard Ass‘n v. FTC, 888 F.3d 1261, 1267 (D.C. Cir. 2018) (formatting modified) (quoting Bennett v. Spear, 520 U.S. 154, 177-78 (1997)). Because “both prongs of Bennett v. Spear must be satisfied independently,” id. at 1271, the failure to satisfy either prong means that the challenged action is nonfinal. Here, EPA‘s document does not meet Bennett‘s second prong.
That prong looks to the “actual legal effect (or lack thereof) of the agency action in question on regulated entities.” Nat‘l Mining Ass‘n v. McCarthy, 758 F.3d 243, 252 (D.C. Cir. 2014). EPA‘s document has no legal consequences for any regulated party. The document imposes no obligations, prohibitions, or restrictions; it “compels action by neither the recipient nor the agency.” Holistic Candlers & Consumers Ass‘n v. FDA, 664 F.3d 940, 944 (D.C. Cir. 2012). Nor does it affect EPA‘s legal obligation to conduct periodic reviews. Rather, it leaves the world just as it found it. See Indep. Equip. Dealers Ass‘n v. EPA, 372 F.3d 420, 428 (D.C. Cir. 2004). For instance, the document does not expose any regulated party to
the possibility of an enforcement action or to enhanced fines or penalties. See Sackett v. EPA, 566 U.S. 120, 126 (2012). The document instead only presents EPA‘s position on what the law is and whether it has complied. Absent some identifiable effect on the regulated community, an agency works no legal effect “merely by expressing its view of the law.” AT&T Co. v. EEOC, 270 F.3d 973, 976 (D.C. Cir. 2001).
The agency‘s own characterization of its action is to the same effect. See Nat‘l Mining Ass‘n, 758 F.3d at 252. EPA expressly disclaims any legal effect. The document states that it does not “require any party or the agency to do (or not do) anything beyond what the statute requires.” Periodic Review Document at 2 n.1, J.A. 4 n.1. And the document makes clear that it has no binding effect on how EPA will conduct future reviews. See
On its own terms, then, the EPA document “do[es] not purport to carry the force of law.” Ctr. for Auto Safety v. Nat‘l Highway Traffic Safety Admin., 452 F.3d 798, 808 (D.C. Cir. 2006). The EPA accordingly acknowledged at oral argument thаt the document has “no legal effect.” Oral Argument at 35:47-35:48. It “has force only to the extent the agency can persuade a court to the same conclusion,” AT&T Co., 270 F.3d at 976, which weighs against finding that it qualifies as final action.
That is dispositive under certain of our precedents, which instruct that the analysis under Bennett‘s second prong focuses
solely on the agency action‘s legal consequences. See Joshi v. Nat‘l Transp. Safety Bd., 791 F.3d 8, 11-12 (D.C. Cir. 2015). In other decisions, though, we have indicated that the finality analysis can look to whether the agency action has a practical effect on regulated parties, even if it has no formal legal force. E.g., CSI Aviation Servs., Inc. v. U.S. Dep‘t of Transp., 637 F.3d 408, 412 (D.C. Cir. 2011) (concluding that agency action was final because it “imposed an immediate аnd significant practical burden“); Nat‘l Ass‘n of Home Builders v. Norton, 415 F.3d 8, 15 (D.C. Cir. 2005) (“Finality resulting from the practical effect of an ostensibly non-binding agency proclamation is a concept we have recognized in the past.“); cf. U.S. Army Corps of Eng‘rs v. Hawkes Co., 136 S. Ct. 1807, 1815 (2016) (endorsing a “pragmatic approach... to finality” (internal quotation marks omitted)).
We need not explore the potential tension between those lines of decisions because the EPA document is nonfinal even if we take into account its practical consequences. The document does not impose an “immediate and significant practical burden on” regulated parties like Valero. CSI Aviation Servs., 637 F.3d at 412. It does not, for example, put Valero to the “painful choice between costly compliance and the risk of prosecution at an uncertain point in the future.” Id. Nor does it impose obligations by chicanery—disclaiming legal force and effect but nonetheless “read[ing] like a ukase.” Appalachian Power, 208 F.3d at 1023. In short, the EPA dоcument is nonfinal and therefore unreviewable.
Valero sees things differently. It first contends that the document “alter[s] the legal regime,” NRDC v. EPA, 643 F.3d 311, 320 (D.C. Cir. 2011), because it “ascrib[es] new meaning to clear statutory terms,” Valero Reply Br. 6. We have never held that legal novelty alone establishes finality. In NRDC, we decided that a guidanсe document amounted to final agency
action, not because it presented a novel interpretation of the
Valero contends that legal consequences necessarily flow from the document‘s conclusion that EPA has complied with
Sierra Club had originally sued EPA to compel the promulgation of emissions
Valero asserts that the EPA document in this case likewise “forecloses interested parties from arguing that EPA has failed
to conduct periodic reviews“: “Courts can no longer compel EPA to conduct periodic reviews because the [document] proclaims that EPA has been doing those reviews all along.” Valero Reply Br. 8-9. The document, though, does no such thing. It has no effect whatsoever on Valero‘s ability to sue to compel EPA to conduct periodic reviews. See
In fact, Valero and another litigant have already brought two such cases, arguing (unsuccessfully) that EPA has failed to comply with its duty under
Instead, the EPA document sets forth a legal position without imposing any new obligations, prohibitions, or requirements. As our precedents dictate, such an action fails the second prong of Bennett v. Spear‘s finality test and is unreviewable. See, e.g., Nat‘l Min. Ass‘n, 758 F.3d at 252; Holistic Candlers, 664 F.3d at 944; Indep. Equip. Dealers Ass‘n, 372 F.3d at 427-28; AT&T Co., 270 F.3d at 975-76.
A contrary conclusion would have the undesirable consequence of discouraging agencies from issuing clarifying documents like this one. EPA published its interpretation of
the statute because it wished to “ma[k]e its views public” “as a matter of good governance and transparency,” EPA Br. 15. “Treating such [interpretations] as final and judicially reviewable agency action would discourage their use, ‘quickly muzzl[ing] [those] informal communications between agencies and their regulated communities... that are vital to the smooth operation of both government and business.‘” Rhea Lana, Inc. v. Dep‘t of Labor, 824 F.3d 1023, 1028 (D.C. Cir. 2016) (quoting Indep. Equip. Dealers Ass‘n, 372 F.3d at 428). Our finality jurisprudence rightly rejects that unwelcome result.
Finally, tо the extent Valero believes that any of the periodic reviews identified by the EPA document were themselves arbitrary, capricious, or otherwise contrary to law, we note that Valero could have directly petitioned for review of those actions under
*
*
*
*
*
For the foregoing reasons, we dismiss the petition for review.
So ordered.