RMS of Georgia, LLC d/b/a Choice Refrigerants v. EPA

The federal district court for the Northern District of Georgia found that it lacked subject matter jurisdiction to hear a constitutional challenge to the American Innovation and Manufacturing Act (AIM Act), which requires a phasedown of production and consumption of HFCs through a cap-and-trade program in which the number of government-issued allowances for HFC production or consumption decrease over time. A seller of a hydrofluorocarbon (HFC)-based refrigerant alleged that the AIM Act violated the Constitution because it “fails to provide an intelligible principle as to how an executive agency is to identify allowance recipients or to distribute allowances among recipients, resulting in the transfer of legislative power to the Executive Branch” in violation of the nondelegation doctrine. The district court concluded that the Clean Air Act required challenges to U.S. Environmental Protection Agency action under the AIM Act to be filed in the courts of appeals and rejected the seller’s argument that it was not challenging a final agency action.

A company that imports, produces, and sells refrigerants filed a lawsuit in federal district court in Georgia claiming that the American Innovation and Manufacturing Act of 2020 (AIM Act)—which phases down production and consumption of hydrofluorocarbons (HFCs)—is unconstitutional because it transfers legislative powers to EPA. The company alleged that the AIM Act contains “a gaping hole” because Congress “did not provide any instruction or even policy suggestions to EPA regarding who would receive the ‘allowances’ newly required for HFC production and consumption, nor in what amounts or proportions.” The company said EPA’s system of allocation granted some allocations attributable to the company’s products to an ”intellectual property pirate” and to the company’s former business partner rather than the company. The complaint asked the court to make a declaration that the AIM Act “violates the United States Constitution because it fails to provide an intelligible principle as to how an executive agency is to identify allowance recipients or to distribute allowances among recipients, resulting in the transfer of legislative power to the Executive Branch.” The plaintiff also sought permanent injunctive relief.