Nat'l Petrochemical & Refiners Ass'n v. Envtl. Prot. Agency

• Decision Date: 22 April 2011
• Docket Number: 10–1071.,Nos. 10–1070,s. 10–1070
• Citation: 643 F.3d 958,395 U.S.App.D.C. 420
• Court: U.S. Court of Appeals — District of Columbia Circuit
• Parties: NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION, Petitionerv.ENVIRONMENTAL PROTECTION AGENCY, RespondentGrowth Energy and National Biodiesel Board, Intervenors.

643 F.3d 958

395 U.S.App.D.C. 420

NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION, Petitioner

v.ENVIRONMENTAL PROTECTION AGENCY, RespondentGrowth Energy and National Biodiesel Board, Intervenors.

Nos. 10–1070

10–1071.

United States Court of Appeals, District of Columbia Circuit.

April 22, 2011.

OPINION TEXT STARTS HEREOn Petition for Rehearing En Banc.Chet Maraffa Thompson, Esquire, Daniel William Wolff, Crowell & Moring, LLP, Washington, DC, for Petitioner.Daniel R. Dertke, Robert Geoffrey Dreher, U.S. Department of Justice, Washington, DC, for Respondent.William Henry Burgess, IV, Jeffrey Bossert Clark, Sr., Esquire, Stuart A.C. Drake, John Caviness O'Quinn, Kirkland & Ellis LLP, Dan Himmelfarb, Stephen Edward Sachs, Mayer Brown LLP, Washington, DC, for Intervenors.Before: SENTELLE ^*, Chief Judge, and GINSBURG, HENDERSON ^**, ROGERS, TATEL, GARLAND, BROWN ^*, GRIFFITH, and KAVANAUGH, Circuit Judges.

ORDER

PER CURIAM.

Petitioners' petition for rehearing en banc, the responses thereto, and the reply were circulated to the full court, and a vote was requested. Thereafter, a majority of the judges eligible to participate did not vote in favor of the petition. Upon consideration of the foregoing, it is

ORDERED that the petition be denied.

BROWN, Circuit Judge, joined by SENTELLE, Chief Judge, dissenting from the denial of rehearing en banc:

It is a commonplace of administrative law that “[a]n agency may not promulgate retroactive rules absent express congressional authority.” Nat'l Min. Ass'n v. Dep't of Labor, 292 F.3d 849, 859 (D.C.Cir.2002). We have previously speculated, “[t]here may be an exception for situations in which the ‘statute prescribes a deadline by which particular rules must be in effect’ and the ‘agency misses that deadline.’ ” Sierra Club v. Whitman, 285 F.3d 63, 68 (D.C.Cir.2002) (quoting Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 224–25, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988) (Scalia, J., concurring)). But until this case, we have never so held. The panel opinion holds that an agency may promulgate fully retroactive regulations absent express congressional authority, as long as “implicit” authority for the retroactivity may be discerned in the structure of the relevant statute. Nat'l Petrochemical & Refiners Ass'n v. EPA, 630 F.3d 145, 163 (D.C.Cir.2010). I respectfully disagree. The exception adopted here conflicts with the Supreme Court's clear-statement rules, usurps legislative power, renders statutory deadlines precatory, multiplies uncertainty for regulated entities, and encourages lethargic administration. For these reasons, we should have reheard this case en banc.

I

Congress enacted the Energy Independence and Security Act (“EISA”) on December 19, 2007, to increase the volume of renewable fuel mandated for annual use by the Energy Policy Act of 2005 (“2005 Act”) and to expand the class of fuels subject to those standards. The EISA required the EPA to promulgate implementing regulations within a year. 42 U.S.C. § 7545( o) (2)(A)(i). EPA missed this deadline by more than a year, publishing on March 26, 2010, its Final Rule which became effective on July 1, 2010. 75 Fed.Reg. 14,670. To compensate for its delayed implementation of the EISA's more stringent standards, the EPA rolled the 2009 volume requirement into the 2010 requirement, requiring the industry to use the combined volume of renewable fuel by the 2010 compliance date, February 8, 2011. Id. at 14,676. The panel assumed, without deciding, that the EPA's regulation had primary, not secondary, retroactive effects. Nat'l Petrochemical & Refiners Ass'n v. EPA, 630 F.3d 145, 162 (D.C.Cir.2010). In other words, the court accepted the petitioners' view that the regulation altered “the past legal consequences of past actions,” not just the value of past investments made in reliance on the old rule. Nat'l Cable & Telecomms. Ass'n v. FCC, 567 F.3d 659, 670 (D.C.Cir.2009).

Although the statute contains no “express congressional authority” for retroactive rulemaking, Nat'l Min. Ass'n, 292 F.3d at 859, the court nevertheless concluded that “any primary retroactive effects” of the EPA's Final Rule “were implicitly authorized under the EISA,” 630 F.3d at 162, because some degree of retroactivity was foreseeable in any event. Even if the EPA had published its regulations on the statutory deadline, the Final Rule, including the renewable fuel standard for 2009, would not have gone into effect until February 18, 2009, after the 60–day Congressional Review period mandated by 5 U.S.C. § 801(a)(3). But the EISA specified that the implementing regulations should “ensure” the statutory volumes are used each year “[r]egardless of the date of promulgation.” 42 U.S.C. § 7545( o)(2)(A)(iv). Thus, the court reasoned, Congress anticipated at least a month and a half of potential retroactive application. Nat'l Petrochemical, 630 F.3d at 163. The court also looked to a provision of the 2005 Act that set a default renewable fuel standard for the year 2006 in the event the EPA failed to promulgate regulations by the 2005 Act's statutory deadline. Id. (citing 42 U.S.C. § 7545( o)(2)(A)(iv)). Even though the EISA contains no similar provision for 2009, the court interpreted the 2005 Act's default rule as a sign that Congress, when it passed the EISA in 2007, contemplated the EPA might miss its deadline. Id. According to the court, this and the “regardless of the date” provision reflected “Congress' focus on ensuring the annual volume requirement was met regardless of EPA delay.” Id. The court concluded that these structural features of the EISA and its predecessor gave the EPA “clear albeit implicit authority ... to apply both the 2009 and 2010 volume requirements in the 2010 calendar year.” Id.

II

In upholding the EPA's retroactive rulemaking absent express congressional authority, the panel opinion relies on an atypical concurring opinion by Justice Scalia. Nat'l Petrochemical, 630 F.3d at 162–63 (quoting Bowen, 488 U.S. at 224–25, 109 S.Ct. 468 (Scalia, J., concurring)). Writing only for himself, Justice Scalia speculated,

It may even be that implicit authorization of particular retroactive rulemaking can be found in existing legislation. If, for example, a statute prescribes a deadline by which particular rules must be in effect, and if the agency misses that deadline, the statute may be interpreted to authorize a reasonable retroactive rule despite the limitation of the APA.

488 U.S. at 224–25, 109 S.Ct. 468. The Supreme Court has never endorsed this view. Although we have treated as “substantially authoritative” the distinction Justice Scalia drew between primary and secondary retroactive effects in the same opinion, see Celtronix Telemetry, Inc. v. FCC, 272 F.3d 585, 588 (D.C.Cir.2001) (citing Bergerco Canada v. U.S. Treasury Dep't, 129 F.3d 189, 192–93 (D.C.Cir.1997)), we have never, until now, adopted his hypothetical exception to the general rule against primary retroactivity. In Sierra Club v. Whitman we only repeated Justice Scalia's speculation that “[t]here may be an exception for situations in which the ‘statute prescribes a deadline by which particular rules must be in effect’ and the ‘agency misses that deadline.’ ” 285 F.3d 63, 68 (quoting Bowen, 488 U.S. at 224–25, 109 S.Ct. 468).

Neither Justice Scalia in Bowen nor our court in Whitman had occasion to decide the lawfulness (or the wisdom) of allowing retroactive rulemaking on the basis of implicit congressional authorization. When the opportunity finally presented itself in this case, several considerations should have led us to reject that hypothesis.

A

The court's exception to the categorical rule against retroactive rulemaking conflicts with the Supreme Court's clear-statement rules. The enactments of Congress itself will not be given retroactive effect absent a demonstration of “clear congressional intent” in the form of an “unambiguous directive” or “express command.” Martin v. Hadix, 527 U.S. 343, 354, 119 S.Ct. 1998, 144 L.Ed.2d 347 (1999) (quoting Landgraf v. USI Film Prods., 511 U.S. 244, 280, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994)); see Lindh v. Murphy, 521 U.S. 320, 325, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997) (describing Landgraf's “clear-statement rule”); Plaut v. Spendthrift Farm, 514 U.S. 211, 237, 115 S.Ct. 1447, 131 L.Ed.2d 328 (1995) (“[S]tatutes do not apply retroactively unless Congress expressly states that they do.”).¹ And “[i]t is axiomatic that an administrative agency's power to promulgate legislative regulations is limited to the authority delegated by Congress.” Bowen, 488 U.S. at 208, 109 S.Ct. 468. It follows that an agency lacks “power to promulgate retroactive rules unless that power is conveyed by Congress in express terms.” Id.

The panel opinion, however, finds in the EISA's structure “implicit” authority for retroactive rulemaking that falls far short of a clear statement. 630 F.3d at 162, 163. In so doing, we permit an agency to seize by implication a power that Congress itself may wield only by “unambiguous directive.” Martin, 527 U.S. at 354, 119 S.Ct. 1998.

B

The court's missed-deadline exception invades the legislative function, since it is for Congress to decide how and when legislative regulations will go into effect. See Bowen, 488 U.S. at 208, 109 S.Ct. 468. The first branch of government is not helpless. If Congress were not content to leave the status quo in place until the EPA eventually promulgated its Final Rule, Congress could have included its own interim rules in the statute. See, e.g., 26 U.S.C. §§ 179D(f), 7807(a). This is effectively what Congress did in the 2005 Act by including a default renewable fuel standard for the year 2006. 42 U.S.C. § 7545( o)(2)(A)(iii). Or Congress could have authorized rulemaking without notice-and-comment procedures. See Air Transp. Ass'n of Can. v. FAA, 254 F.3d 271 (D.C.Cir.2001). Or Congress could have allowed the agency to promulgate interim-final rules before undertaking notice-and-comment procedures. See ...