On October 21, 2024, the U.S. Supreme Court (SCOTUS) agreed to hear several EPA-related cases to determine which federal courts are the proper venues for specific EPA actions.
The specific cases are:
Although the Oklahoma and Pacificorp cases appear to be unrelated, they’ve been consolidated to determine “which courts can hear objections to a rejection from the EPA,” according to political website The Hill.
Oklahoma
The Oklahoma case involves both Oklahoma and Utah, which are legally challenging the EPA’s rejection of their state implementation plans (SIP) under the National Ambient Air Quality Standards (NAAQS).
The Clean Air Act (CAA) governs air emissions from both stationary and mobile sources and provides the EPA with the authority to set and enforce NAAQS.
One of the Act’s goals was to set and achieve an NAAQS in every state by 1975 to address the public health and welfare risks posed by certain widespread air pollutants. At the same time, states were directed to develop SIPs, applicable to appropriate industrial sources in each state, to achieve these standards. The Act was amended in 1977 and 1990 primarily to set new goals (dates) for achieving NAAQS attainment, as many areas of the country failed to meet the deadlines.
The portion of the regulation that’s being challenged is “the ‘Good Neighbor’ provision of the [CAA] anti-pollution law, requiring steps to reduce pollution that drifts into states downwind,” Reuters says.
When the EPA rejects a SIP, states have the option file a lawsuit to legally challenge the rejection.
“The states, whose plans were rejected, want their case to be heard in the 10th Circuit Court of Appeals,” The Hill continues.
Pacificorp
This case also involves challenges to the EPA’s SIP rejections. The refineries want their case heard before the 5th Circuit Court of Appeals.
Many challengers try to avoid the D.C. Circuit Court of Appeals because it has a reputation “of upholding policies under the Biden administration and is stacked with Democratic-appointed judges,” according to the Washington Examiner. “In March, the Colorado-based U.S. Court of Appeals for the 10th Circuit told Oklahoma, PacifiCorp, and other challengers that their lawsuits against the EPA’s traveling ozone plan belong at the D.C. Circuit, not under a more regional appeals court where the challengers may have an advantage in getting the rule paused.”
There’s a growing number of states and industry groups that seek more favorable legal venues outside the D.C. Circuit.
“For example, the Louisiana-based U.S. Court of Appeals for the 5th Circuit, considered to be one of the most conservative and skeptical of regulatory overreach, decided on March 22 to make it much more difficult to prevent a Texas-based plastic company from using fluorination to reinforce plastic packaging, which the agency says contributes to producing ‘forever chemicals’ and harms the environment.”
EPA v. Calumet Shreveport
The Calumet Shreveport case involves several small refineries that requested exemption from renewable fuel standards (RFS) under the CAA. After the Agency denied the biofuel waivers, the small refineries filed suit.
The RFS program sets specific volumes of renewable fuel, and refineries must either produce and sell those volumes or purchase offset credits. The refineries note it’s very expensive for smaller refineries to participate in the program.
In creating the RFS program, Congress recognized that the regulation could create economic hardships for smaller refineries and provided three exemptions within the regulation:
- A blanket exemption for all small refineries until 2011.
- A refinery-specific exemption initiated by the secretary of energy. “If, after conducting the statutorily mandated Department of Energy study, the Secretary determined that a small refinery was subject to a disproportionate economic hardship, ‘the Administrator shall extend the exemption under clause (i) for the small refinery for a period of not less than 2 additional years,’” says legal information site FindLaw.
- The subparagraph (B) exemption, which allows small refineries to “petition the Administrator for an extension under subparagraph (A) for the reason of disproportionate economic hardship. In evaluating a petition, the Administrator, in consultation with the Secretary of Energy, shall consider the findings of the study under subparagraph (A)(ii) and other economic factors.”
“The EPA denied scores of exemption requests from small refineries across the country, six of which challenged those denials in the New Orleans-based Fifth Circuit,” according to the National Law Journal (NLJ).
In this case, “the Biden administration is seeking to block the conservative U.S. Court of Appeals for the Fifth Circuit from hearing a challenge from several small oil refineries to renewable fuel standards,” the NLJ continues. “The Fifth Circuit refused to transfer those six lawsuits back in November, prompting the administration to seek Supreme Court review.”
Legal questions
SCOTUS must consider a provision in the CAA that seemingly requires certain matters to be heard in the D.C. Circuit Court of Appeals.
“The law states the D.C. Circuit is the only place to challenge ‘nationally applicable regulations’ promulgated under the [CAA],” the NLJ article says. “And while it allows for petitioners to challenge ‘locally or regionally applicable’ regulations in their home circuits, the law carves out for the D.C. Circuit those local rules that are ‘based on a determination of nationwide scope or effect.’”
In the Oklahoma and Pacificorp cases, the petitioners’ legal argument is that the EPA’s SIP denials constitute a local action.
“Oklahoma and Utah argued they could pursue their case in the Denver-based 10th U.S. Circuit Court of Appeals because the rejection by the EPA of their and 19 other states’ air quality plans constituted a local agency action, not a national one,” notes Reuters. “The 10th Circuit disagreed in February and transferred the case. Four other regional appeals courts have come to the opposite conclusion and allowed cases to be litigated before them, Oklahoma and Utah said in their petition to the U.S. Supreme Court for review.”
In the Calumet Shreveport case, the EPA argues that the “case had no business being in the 5th Circuit, because the waiver denials were part of a larger denial of exemptions sought from 36 small refineries in 18 states, making it a national issue,” Reuters adds.
SCOTUS is expected to hear arguments in these cases in February or March.
“Oklahoma Attorney General Gentner Drummond, a Republican, welcomed the Supreme Court’s action, saying the Biden administration’s ‘Good Neighbor’ policy burdened his state ‘with an unwieldy and costly one-size-fits-all plan.’
“PacifiCorp said it hoped the court would use the case to ‘clarify the cooperative authority states and the EPA exercise to implement provisions of the [CAA].”