WASHINGTON, D.C.—Growth Energy and the Renewable Fuels Association (RFA) today jointly petitioned the Supreme Court to overturn an opinion from the U.S. Court of Appeals for the Fifth Circuit regarding the U.S. Environmental Protection Agency’s (EPA’s) denials of several small refinery exemptions (SREs) under the Renewable Fuel Standard (RFS). In their petition, Growth Energy and RFA argue that challenges to those denials should be adjudicated solely in the U.S. Court of Appeals for the D.C. Circuit, not in regional circuits like the Fifth, which only covers Louisiana, Mississippi, and Texas. In contrast to all other U.S. Courts of Appeals that evaluated this venue issue, the Fifth Circuit concluded that it was the proper venue to hear and rule on these challenges, despite the fact that EPA’s SRE policy is “nationally applicable” and “based on a determination of nationwide scope or effect.”
“There’s a simple reason why the Third, Seventh, Ninth, Tenth, and Eleventh Circuits have all found that EPA’s SRE decisions should be litigated in the D.C. Circuit. SREs have nationwide impacts on the entire U.S. renewable fuels market, and EPA has developed and applied a nationwide SRE policy to assess them,” said Growth Energy CEO Emily Skor. “The Supreme Court should take up our petition and overturn the Fifth Circuit’s opinion to ensure that SRE review is governed by a single court whose decisions apply nationwide. Furthermore, the Court should not allow oil industry interests to take advantage of a fragmented system of judicial review and forum shop for more favorable courts at the expense of a coherent SRE program. Only by funneling SRE challenges to the D.C. Circuit can we ensure consistent, nationwide SRE policy and avoid regulatory and market uncertainty for the nation’s transportation fuel supply.”
Background
In April and June 2022, EPA denied 105 SRE petitions from 36 refineries located in 18 states. In assessing the petitions, EPA applied a single, nationwide legal requirement: to be eligible for an SRE, petitioning refineries must demonstrate a direct causal relationship between RFS compliance and their claimed economic hardship. EPA then invited petitioning refineries to submit refinery-specific evidence to rebut EPA’s general factual finding that refineries have the ability to pass through their costs of compliance with the RFS and that, as a general matter, RFS compliance does not cause refineries to incur any net compliance costs, let alone economic hardship. Reviewing the evidence submitted by the refineries, EPA found that none met their burden.
Refineries whose SRE petitions were denied challenged the denials in the Third, Fifth, Seventh, Ninth, Tenth, Eleventh, and D.C. Circuits. All regional circuit courts except the Fifth Circuit concluded that only the D.C. Circuit was the proper venue to hear the challenges, and they dismissed or transferred the challenges to the D.C. Circuit. By contrast, the Fifth Circuit held that venue in that court was proper, and in a divided 2-1 panel opinion, vacated EPA’s denials for the refineries that brought challenges in that court. The D.C. Circuit challenge is pending.