The U.S. Court of Appeals for the District of Columbia Circuit is often called the nation’s second most powerful court. The reason is mostly due to its heavy docket of litigation over regulatory policy, which can include marquee components of a president’s agenda.
The U.S. Supreme Court considered one important source of the D.C. Circuit’s caseload on Tuesday when it heard two cases dealing with the venue provision of the Clean Air Act, 42 U.S.C. § 7607(b)(1).
Over roughly 2½ hours, the justices debated whether separate challenges to certain EPA actions belong in the D.C. Circuit or can be litigated in a regional U.S. court of appeals. The first case involved the EPA refusing to exempt small oil refineries from clean energy rules; the second centered around the EPA’s rejection of state air quality plans.
The law states the D.C. Circuit is the only place to challenge “nationally applicable regulations” promulgated under the Clean Air Act. And while it allows petitioners to challenge “locally or regionally applicable” regulations in their home circuits, the law carves out for the D.C. Circuit those local rules “based on a determination of nationwide scope or effect.”
The justices signaled that they may rule differently on the two cases, expressing more support for sending the case involving the refineries to the nation’s capital, while returning the state air quality disputes back to the heartland.
“I have a pretty strong intuition—I won’t tell you what it is—about both of these cases,” Justice Elena Kagan said. “And one goes one way and one goes the other way.”
Despite her reticence, Kagan’s other questions indicated she was more skeptical of the refineries’ attempt to avoid the D.C. Circuit than the various states defending air quality plans that were rejected by the EPA.
Tuesday’s proceedings seemed to reflect the different perspectives of the justices, four of whom served on the D.C. Circuit before being elevated to the Supreme Court.
Justice Brett Kavanaugh, a 12-year veteran of the federal appeals court in Washington, pushed back on a suggestion by an attorney representing various energy companies that his clients would not get full and fair consideration before the D.C. Circuit.
“They get fair attention in both courts,” Kavanaugh said.
“It is true that the judges of the D.C. Circuit are excellent judges and work very hard,” responded the attorney, Misha Tseytlin of Troutman Pepper Locke.
“And they’re not afraid to rule against EPA pretty routinely either … when justified,” Kavanaugh said.
Tseytlin said that, in the D.C. Circuit, he would face more constraints in briefing certain local issues than he would otherwise get in a regional circuit, later adding that the nuances of local air quality conditions “would get lost in the D.C. Circuit.”
“It doesn’t get lost,” Kavanaugh replied. “I’ll just say that.”
Deputy U.S. Solicitor General Malcolm Stewart, appearing on behalf of the EPA, seemed to agree.
“If location in D.C. meant that the D.C. Circuit is a hometown court, then this court would be a hometown court for EPA, and I’ve never had that perception,” Stewart joked.
In addition to Kavanaugh, Chief Justice John Roberts Jr. and Justices Clarence Thomas and Ketanji Brown Jackson served on the D.C. Circuit.
In one of the cases, the federal government 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 case involves the EPA’s renewable fuel standard program, under which it sets specified volumes of renewable fuel that oil refineries must include in transportation fuel or else purchase offsetting credits. 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.
The Fifth Circuit refused to transfer those six lawsuits to D.C., prompting the government to seek Supreme Court review.
Several of the court’s liberal justices, along with Kavanaugh, seemed to lean in favor of consolidating the challenges in the D.C. Circuit in light of the standards that EPA claims to have used in rejecting the exemption requests. In particular, EPA insists it applied a nationwide standard, wherein small refineries must show their economic hardship is directly caused by the renewable fuel standards, and that they must overcome the presumption that they can’t pass those added costs on to consumers.
Kagan said that “common denominator” suggests the EPA’s exemption denials were based not on local determinations but national ones.
Kavanaugh cited the Clean Air Act’s goal of ensuring “speed” and clarity for industry, suggesting that policy reasons cut in favor of having the D.C. Circuit hear the cases to “help American businesses have some certainty more quickly.”
Justice Neil Gorsuch, an alumnus of the U.S. Court of Appeals for the Tenth Circuit, appeared to reject the EPA’s argument, noting that the agency had previously considered exemption requests on an individualized basis.
“You’re asking us to change historical practice pretty radically,” Gorsuch said.
In the other case, the EPA says the U.S. Court of Appeals for the Tenth Circuit is the wrong place to challenge the federal agency’s rejection of a state plan to address air quality problems in downwind states. The Tenth Circuit agreed with the government early last year and transferred lawsuits from Oklahoma, Utah and a set of energy cooperatives to their judicial colleagues in the nation’s capital.
The justices appeared to flip their positions during the second hearing of the day, with Gorsuch suddenly open to sending the case over the state implementation plans, or SIPs, to the D.C. Circuit.
“I mean, gosh, if anything’s impact is nationwide, it’s got to be air pollution, because it travels,” he said. “It crosses the country in ways that don’t respect our jurisdictional boundaries between circuits.”
“Wouldn’t it be efficient,” Gorsuch said later on in the hearing, “to have those [SIPs] determined in one venue with excellent judges who pay close attention to them?”
The Supreme Court term is shaping up to be a big one for the landscape of administrative challenges.
The justices also are considering the proper venue for tobacco companies trying to sue the FDA for denying their new e-cigarette products.
The cases heard Tuesday are Oklahoma v. EPA and Pacificorp v. EPA, Nos. 23-1067 and 23-1068; and EPA v. Calumet Shreveport RFG, No. 23-1229.
The high court is expected to render its decisions by July.