US Supreme Court Clean Air Act (CAA) decisions often result in big-picture changes to administrative law. Two CAA decisions this term deal with CAA’s venue-related provisions which specify where cases challenging US Environmental Protection Administration (EPA) determinations can be filed.

These rulings — EPA v. Calumet Shreveport Refining, L.L.C. and Oklahoma v. EPA — resolve longstanding confusion over whether such cases belong in the DC Circuit or regional federal appellate courts.

Below is a high-level summary of CAA’s venue provisions, the two decisions, and key takeaways for CAA-regulated parties. In general, when taken together, the decisions illustrate a willingness of courts to look for substance over form in evaluating venue issues. With this in mind, as part of the administrative process, parties may want to work to build into the administrative record evidence needed to support preferred venue and to coordinate with other challengers to ensure consistent application of CAA’s venue provisions.

The Clean Air Act’s Venue Framework

The CAA is cooperatively implemented by federal and state regulators. CAA has been described as “an experiment in federalism” that establishes “an intergovernmental partnership to regulate air quality in the United States.” CAA channels judicial review of EPA actions to either the DC Circuit or a regional circuit, depending on the nature of the action: More specifically, CAA Section 607(b)(1) identifies three types of “final actions” and specifies which courts have jurisdiction to hear each of them:

• Actions that are “nationally applicable” (i.e.,those with binding effect across the entire country) are reviewable in the DC Circuit.
• Actions that are “locally or regionally applicable” (i.e.,those affecting only specific states or regions) are reviewable in the regional circuits.
• The third category is an exception to the second and provides that “locally or regionally applicable” actions must be reviewed in the DC Circuit if, and only if, the final action is based on “a determination of nationwide scope or effect” and the administrator publishes a finding to that effect.

The third category is where much of the dispute centers, i.e., when an EPA action considers locality specific issues as it applies a purportedly national standard.

EPA v. Calumet Shreveport Refining

EPA v. Calumet Shreveport Refining illustrates that a series of locally or regionally applicable actions can constitute a determination that is of “nationwide scope or effect” when refinery-specific facts play only a peripheral role. Calumet Shreveport Refining followed EPA’s denial of 105 small refinery exemption petitions from renewable fuel blending requirements, issuing two omnibus notices. EPA’s denials were based on two core, nationwide determinations: (1) that “disproportionate economic hardship” means hardship directly caused by compliance, and (2) that compliance costs are fully passed through to consumers (the “RIN passthrough” theory).

EPA asserted that these denials should be reviewed only in the DC Circuit on the grounds that EPA’s nationwide statutory interpretation and economic theory were the primary drivers of the relevant decisions. While the Fifth Circuit accepted this argument and denied EPA’s motion to transfer venue, EPA appealed and the Supreme Court overturned the Fifth Circuit decision and directed future courts to independently assess whether a nationwide determination is the true basis for EPA’s action, rather than deferring to EPA’s characterization of local issues into involving “nationwide” issues.

Oklahoma v. EPA

Oklahoma v. EPA stems from EPA’s disapproval of State Implementation Plans (SIPs) from 21 states, including Oklahoma and Utah, for failing to comply with the CAA’s “Good Neighbor” provision, which addresses cross-state air pollution where emissions from one state generate exceedances in a non-emitting state. EPA grouped these disapprovals into a single omnibus rule and asserted that challenges belonged in the DC Circuit, either as a nationally applicable action or under the “nationwide scope or effect” exception. States and industry petitioners challenged the SIP disapprovals in regional circuits. Of five circuits to resolve EPA’s motions to dismiss or transfer, four found regional venue proper, leaving only the Tenth Circuit as having accepted EPA’s characterization that the bundle of actions constituted a single nationally applicable action because it covered “21 states across the country” and reflected EPA’s application of “a uniform statutory interpretation and common analytical methods.”

In Oklahoma v EPA, the Supreme Court rejected the Tenth Circuit’s approach and held that each SIP disapproval is a separate, state-specific action, “the prototypical ‘locally or regionally applicable’ action.” The fact that EPA bundled multiple disapprovals into one rule does not make the action nationally applicable. The Court further found that the “nationwide scope or effect” exception did not apply because EPA’s decisions were driven by state-specific, fact-intensive analyses, not by a single nationwide determination.

In general, Oklahoma v. EPA indicates that that future challenges to EPA’s approval or disapproval of individual state SIPs should be filed in the relevant regional circuit, not the DC Circuit, unless the action is truly based on a nationwide determination. Critically, whether an EPA action constitutes a “nationwide determination” is not determined by how EPA frames the action, nor how it packages or aggregates its decisions in the Federal Register. Rather, the Court in Oklahoma directs that the underlying statutory authority and the geographic scope of the action are determinative of whether an action is nationwide.

Takeaways for the Regulated Community

Taken together, Calumet Shreveport Refining and Oklahoma v. EPA emphasize the importance of addressing venue as part of initial case strategy for CAA challenges. The distinction between a fact-specific, local action and one driven by a nationwide policy is now critical.

Evaluating venue requires scrutinizing the basis for EPA’s decision. Do national methods predominate over state or facility-specific facts? When EPA published the determination to be challenged in the Federal Register, did it expressly find and publish, with sufficient reasoning, why the action was “based on a determination of nationwide scope or effect,” and why that determination is the primary driver of the action? Indeed, parties who believe that they may be in a close case may want to provide comments on the local versus national issues as part of the pre-publication regulatory comment process. The choice of venue can significantly affect the outcome of litigation, given differences in judicial philosophy and precedent among the circuits. Factor venue analysis into overall litigation strategy from the outset.

By proactively addressing venue issues, the regulated community can more effectively ensure that challenges to EPA actions are heard in appropriate and ideally favorable, forums.