Natural Resources Defense Council v. Wheeler

In a split decision, the D.C. Circuit Court of Appeals vacated the U.S. Environmental Protection Agency’s (EPA’s) 2018 rule in which EPA decided to expand the D.C. Circuit’s partial vacatur in <a href="https://climatecasechart.com/wp-content/uploads/case-documents/2017/20170808_docket-15-1328_opinion.pdf">Mexichem Fluor, Inc. v. EPA</a> of a 2015 rule barring replacement of ozone-depleting substances with hydrofluorocarbons (HFCs), which are powerful greenhouse gases. In Mexichem, the D.C. Circuit vacated the 2015 rule to the extent that it prohibited continued use of HFCs by companies that previously switched to HFCs from an ozone-depleting substance. EPA’s 2018 rule also suspended the prohibition for companies currently using ozone-depleting substances. In ruling on the challenge to the 2018 rule, the D.C. Circuit concluded that the rule was not merely a rule that interpreted Mexichem’s partial vacatur but a legislative rule that “altered the decision’s legal effect” and required notice-and-comment rulemaking. As a threshold matter, the court found that Natural Resources Defense Council (NRDC) and one of the state petitioners (New York) each had standing based on potential injuries from climate change which were caused in part by HFC emissions and which would be redressed by restrictions on such emissions. In addition, the court found that NRDC satisfied requirements for representational standing. The court also rejected the contention that the 2018 rule was not final action. The court noted that the parties agreed that the 2018 rule was the consummation of EPA’s decision-making process, but that EPA and the intervenors argued that it was Mexichem—not the 2018 rule—that determined any legal rights or obligations or effected legal consequences. The D.C. Circuit disagreed, finding that the 2018 rule changed the rights and obligations of companies that continued to use ozone-depleting substances compared to the status quo created by Mexichem. Similarly, in determining that the 2018 rule was legislative and not interpretive, the majority found that the 2018 rule had “independent effect beyond that compelled by Mexichem” and therefore reflected EPA’s “intent to exercise its delegated legislative power.” The dissenting judge would have found that the 2018 rule was an interpretive rule because it “did no more than articulate the EPA’s view of what was required by Mexichem in the ‘near term’ and pending further rulemaking.”

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Natural Resources Defense Council (NRDC) and 11 states and the District of Columbia filed their opening briefs in D.C. Circuit proceedings challenging U.S. Environmental Protection Agency (EPA) guidance that stated EPA would not apply any restrictions adopted in 2015 on the use of hydrofluorocarbons (HFCs) as substitutes for ozone-depleting substances. The petitioners argued that the guidance turned the D.C. Circuit’s 2017 decision partially vacating the 2015 restrictions (to the extent they required manufacturers currently using HFCs to stop using them) into a “complete vacatur.” NRDC and the states contended that the guidance therefore violated the Clean Air Act by suspending a final regulation without notice-and-comment rulemaking and that the guidance was arbitrary and capricious because EPA failed to provide a reasoned explanation for the suspension of the HFC use restrictions.