Valero Energy Corp. v. Envtl. Prot. Agency
Valero Energy Corp. v. Envtl. Prot. Agency
Opinion
*534 The Energy Independence and Security Act of 2007 contains a citation to nowhere. The Act 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 explaining 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 lack of jurisdiction.
I.
A.
In 2005 and 2007, Congress amended the Clean Air Act to establish the Renewable Fuel Standards program.
See
Energy Policy Act of 2005, Pub. L. No. 109-58,
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
*535
periodic-review provision, § 7545(o)(11), including the provision's reference to the nonexistent "subsection (a)(2)."
See
Periodic Review Document at 3-7, J.A. 5-9. With regard to the intended meaning of that erroneous reference, EPA opines that there is "no 'overwhelming evidence from the structure, language, and subject matter' of the statute pointing in a single direction."
In the alternative, EPA sets forth its best attempt to give content to § 7545(o)(11) 's mistaken cross-reference. Because the reference to "subsection (a)(2)" is ambiguous, EPA reasons, it can adopt "any reasonable construction." Id. at 6, J.A. 8. EPA concludes that, if necessary, it would read "subsection (a)(2)" to refer to subsection (o)(2)(B)-i.e., § 7545(o)(2)(B). See id. at 5-7, J.A. 7-9. EPA would also interpret the ensuing reference to "each individual and entity described in paragraph (2)" to refer to the list of regulated individuals and entities in § 7545(o)(2) -namely, "refineries, blenders, distributors, and importers" and "consumers of transportation fuel." Id. at 6-7, J.A. 8-9 (citations omitted). In sum, EPA would interpret the provision to require periodic review of the impacts of the required annual volumes contained in § 7545(o)(2)(B) on "refineries, blenders, distributors, and importers, as well as on consumers of transportation fuel." Id. at 7, J.A. 9.
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 id. at 8-12, J.A. 10-14. As evidence that it has conducted the required reviews, EPA points to various analyses it has performed for rulemakings relating to the Renewable Fuel Standard program and for other occasions. See id. , J.A. 10-14. The document marks the first time those analyses have been explicitly identified as "periodic reviews." See id. at 8, J.A. 10. Nonetheless, EPA concludes that they suffice to establish compliance with the requirements of § 7545(o)(11). That said, a footnote states that "neither [the] interpretation of the statute nor the description of [EPA's] studies in this document require any party or the agency to do (or not do) anything beyond what the statute requires." Id. at 2 n.1, J.A. 4 n.1. The footnote also states: "[O]ur reviews of the [Renewable Fuel Standard] program occur on a continuing basis, and are subject to change in both approach and results. Indeed, we regularly consider new approaches and update our [Renewable Fuel Standard] technical analysis, and we intend to continue doing so." Id.
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 § 7545(o)(11) imposes a mandatory duty to conduct periodic reviews and that EPA had failed to conduct even a single review.
See
Valero Energy Corp. v. EPA
, No. 7:17-cv-00004-O,
*536 Soon after the district court's decision, EPA published the document at issue in this case. Valero filed a timely petition for review of the document in this court. According to Valero, EPA's document incorrectly interprets the periodic-review provision and erroneously concludes that the agency has complied with its periodic-review obligations.
II.
We start (and end) with the question of finality. The Clean Air Act authorizes review only of "final action,"
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 interlocutory 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
,
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
,
The agency's own characterization of its action is to the same effect.
See
Nat'l Mining Ass'n
,
*537
devoid of relevant commands" to regulated parties.
Nat'l Mining Ass'n
,
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.
,
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.
,
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.
,
Valero sees things differently. It first contends that the document "alter[s] the legal regime,"
NRDC v. EPA
,
Valero contends that legal consequences necessarily flow from the document's conclusion that EPA has complied with § 7454(o)(11). In support of that view, Valero leans heavily on
Sierra Club v. EPA
,
Sierra Club had originally sued EPA to compel the promulgation of emissions
*538
standards for certain hazardous air pollutants, as required by § 112(c)(6) of the Clean Air Act.
See
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 § 7454(o)(11).
See
EPA Motion to Dismiss,
Small Retailers Coal. v. EPA
, No. 7:17-cv-00121-O (N.D. Tex. Feb. 20, 2018);
Valero Energy Corp. v. EPA
, No. 7:17-cv-00004-O,
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
,
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
,
Finally, to 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.
Reference
- Full Case Name
- VALERO ENERGY CORPORATION, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent
- Cited By
- 17 cases
- Status
- Published