Notice & Comment

D.C. Circuit Review – Reviewed: Renewable Fuel Standard Redux

The D.C. Circuit released six published opinions last week, including the latest challenge to EPA’s Renewable Fuel Standard (RFS) program and an appeal involving the scope of the consultant corollary to FOIA Exemption 5.

First, in Sinclair Wyoming Refining Co. v. EPA, the court denied several petitions for review of EPA’s RFS rulemaking for 2020, 2021, and 2022. The rulemaking set the quantity of renewable fuel that must be introduced by refiners and retailers. The panel unanimously rejected the challenges brought by producers of cellulosic biofuel, who argued that EPA should have required more cellulosic biofuel. The panel divided on the challenges brought by other refiners and retailers, who argued that EPA should have set lower volumes for the various renewable fuels.

In an opinion by Judge Pillard, the majority held that EPA did not arbitrarily and capriciously pursue unquantified benefits (such as reducing greenhouse-gas emissions) despite the existence of quantified costs (such as increased fuel costs). The majority reasoned that “the statute Congress drafted is designed to yield benefits that it deemed important but understood are not easily monetizable.”

The majority also held that EPA did not exceed its statutory authority or act arbitrarily and capriciously by imposing a “supplemental volume” for 2022. The supplemental volume made up for a 2016 volume that the D.C. Circuit previously vacated as too low. The majority concluded that EPA could impose the supplemental volume because it must “ensure the applicable volumes are met,” even though the supplemental volume was more restrictive than previous retroactive RFS rulemakings. The panel further concluded that the supplemental volume was not arbitrary and capricious. It noted that EPA mitigated the hardship of the supplemental volume by spreading it over multiple years and providing 11 months of lead time.

Judge Katsas dissented in part. He would have invalidated the 2022 volume requirements because EPA failed to give adequate weight to increased costs and relied on unquantified reductions in greenhouse-gas emissions. Judge Katsas would have further held that EPA lacked authority to impose the supplemental volume. And he would have held that, even if EPA had such power, it arbitrarily and capriciously failed to apply its cellulosic waiver authority to mitigate the hardship of the supplemental volume.

Second, in American Oversight v. U.S. Department of Health and Human Services, a divided panel clarified the scope of the consultant corollary to FOIA Exemption 5. The exemption protects certain “intra-agency memorandums or letters,” and the D.C. Circuit has long interpreted it to include many communications from “consultants.” In Department of Interior v. Klamath Water Users Protective Association (2001), the Supreme Court cast doubt on the scope of the consultant corollary.

In an opinion by Judge Garcia, the majority held that an agency may not invoke Exemption 5 to withhold “agency records generated by a government consultant with its own stake in the outcome of the agency’s decision-making process.” Applying that rule, the majority held that the defendant agencies could not withhold communications they received from Congress during the 2017 effort to repeal the Affordable Care Act. Judge Wilkins dissented in part, arguing that FOIA should not be interpreted to preclude members of Congress from providing advice to agencies. 

Third, in Jibril v. Mayorkas, a unanimous panel affirmed the dismissal of a lawsuit alleging that officials placed the plaintiff family on a terrorist watchlist known as the “Selectee List.” The government made an ex parte submission, and the district court dismissed for lack of standing. Although the district court did not disclose the contents of the ex parte submission, it did discuss a series of hypothetical facts. The D.C. Circuit approved the use of those hypotheticals and affirmed. The court reasoned that family members who were never on the Selectee List would lack standing unless they could show future plans to travel with someone on the list. The court further reasoned that if one family member had been on the Selectee List but was removed before the lawsuit was filed, then none of the plaintiffs would have standing. The court further affirmed the district court’s denial of leave to amend to add a claim for nominal damages because the original complaint sought only prospective relief.

Fourth, in Perry v. Raimondo, the D.C. Circuit addressed the standard of review for “mixed cases” brought before the Merit Systems Protection Board (MSPB). A mixed case is one in which the plaintiff has brought both a federal discrimination claim and a challenge to an adverse employment action under the Civil Service Reform Act (CSRA). The D.C. Circuit unanimously held that a district court reviewing the MSPB’s decision must consider discrimination claims de novo, even if the MSPB did not address them because it lacked jurisdiction. Although the government argued otherwise in the district court, it conceded this point on appeal.

Finally, the D.C. Circuit also decided a criminal case and an arbitration case last week. In United States v. Saffarinia, the court unanimously affirmed the conviction of a former federal official. Of note, it held that falsifying disclosures on an Office of Government Ethics form could constitute obstruction of justice under 18 U.S.C. § 1519. And in Micula v. Government of Romania, the court unanimously affirmed the denial of Romania’s motion for relief from judgments confirming an international arbitral award.

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