Justices' search for simple solution to Clean Air Act venue dispute goes up in smoke

WASHINGTON (CN) — Despite a marathon hearing Tuesday, the Supreme Court appeared no closer to determining a clear standard for deciding whether the government or its challengers can claim home court advantage in pollution disputes.

States and refineries asked the justices to clarify venue rules for challenging the Environmental Protection Agency’s actions under the Clean Air Act. In theory, the statute requires any nationwide regulations to be filed in the D.C. Circuit, with all others falling within an appropriate circuit.

But applying the Clean Air Act’s venue rules has become increasingly fraught, leaving the circuit courts divided over what ‘nationally applicable’ means under the statute. The justices tried to clear up the standard for nearly three hours on Tuesday but made little progress.

“I don’t know Mr. Stewart, you’re making this much more complicated than I came in here thinking it was,” Justice Elena Kagan, a Barack Obama appointee, said to Malcolm Stewart, the Justice Department’s deputy solicitor general.

The cases before the justices exemplified the complexities of the dispute. In 2022, the EPA denied 105 economic hardship requests from 36 small refineries under the Clean Air Act’s Renewable Fuel Program. At the same time, the agency adopted a general standard for reviewing future economic hardship requests.

Several refineries brought challenges to the agency’s decision in the Third, Fifth, Seventh, Ninth, 10th, 11th and D.C. Circuits.

Most of the appeals courts punted their challenges to the D.C. Circuit, finding that the EPA’s hardship standard amounted to a nationally applicable action. One panel diverged, however, holding that the Fifth Circuit was the appropriate venue for several challenges because assessments for individual plants fell outside of nationwide standards.

The D.C. Circuit and Fifth Circuit issued conflicting rulings, creating one rule for refineries in the Fifth Circuit and another rule for refineries everywhere else.

The government said the diverging rulings demonstrated why most cases should be funneled to the D.C. Circuit.

“Under the approach to venue adopted by the court of appeals, several different regional circuits would have been required to consider substantially similar challenges to the agency’s approach, wasting judicial resources and creating a heightened risk of inconsistent outcomes,” the government wrote in its brief.

The EPA argued that the economic hardship exemptions were nationally applicable because every small-refinery exemption inherently affected national Renewable Fuel Program requirements. All pending and future refinery exemptions, the government said, fall under the prescribed general requirements. The agency also says it acted based on determinations of nationwide scope.

To decide whether an action is nationally applicable, the government said courts could look at the economic analysis supporting the EPA’s action or whether the agency’s statutory analysis followed precedent.

Justice Neil Gorsuch, a Donald Trump appointee, quibbled with the complexity of the government’s standard for determining when an action was nationally applicable.

“You’re saying, when there are new theories of statutory interpretation or new economic theories of nationwide impact, it goes to the D.C. Circuit, but if they’re old, then I can bring it in my own circuit where I actually live and operate and work,” Gorsuch said. “Is it a 10-year cutoff — I mean, venue is supposed to be simple.”

Chief Justice John Roberts, a George W. Bush appointee, and Justice Ketanji Brown Jackson, a Joe Biden appointee, both said they were sympathetic to the search for a simplified standard but were skeptical one was available to them.

“I understand the general concern about simplicity, but it appears that Congress did not share that concern with respect to this statute because it’s very complicated,” Jackson said.

More important, Justice Brett Kavanaugh, a Donald Trump appointee, said was uniformity and speed. Kavanaugh said American businesses are less concerned over which standard is used and instead favor certainty and speed that can be relied upon to make multi-million-dollar decisions.

“[American businesses] will say, ‘we don’t care whether the rule is A or B… but tell us what the rule is so we can make our investment decisions and our business decisions,” Kavanaugh said.

Justice Elena Kagan, a Barack Obama appointee, said there’s always a nationwide element to these cases but courts should consider whether determinations change depending on local conditions.

The justices’ second argument of the day considered similar questions in a Clean Air Act dispute involving the EPA’s Good Neighbor Provision — a rule prohibiting states from undermining their downwind neighbor’s compliance with ozone standards.

In 2023, the EPA rejected plans to address cross-border pollution from 21 states. Oklahoma and Utah tried to challenge the EPA’s decision in the 10th Circuit, but their appeal was sent to the D.C. Circuit because of the program’s nationwide impact.

Oklahoma and Utah told the Supreme Court that their Good Neighbor plans were individualized and therefore should be governed by regional courts.

The justices appeared more skeptical of this argument.

“If there’s anything that has nationwide impact, it’s air pollution because it travels,” Gorsuch quipped.

Kagan hinted at her desired outcome, stating that she had a strong intuition that the justices would reverse one ruling and uphold the other.

“One goes one way, and one goes the other way because in one, everything is being decided by the nationwide determination; and in the other, pretty much nothing is being decided by the nationwide determination,” Kagan said.

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