Renewable Fuels Ass'n v. U.S. Envtl. Prot. Agency
| Decision Date | 16 February 2021 |
| Docket Number | Civil Action No. 18-2031 (JEB) |
| Citation | 519 F.Supp.3d 1 |
| Court | U.S. District Court — District of Columbia |
| Parties | RENEWABLE FUELS ASSOCIATION and Growth Energy, Plaintiffs, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and United States Department of Energy, Defendants. |
Matthew W. Morrison, Bryan Matthew Stockton, Shelby Leigh Dyl, Pillsbury Winthrop Shaw Pittman, LLP, Washington, DC, for Plaintiff Renewable Fuels Association.
Claire H. Chung, Pro Hac Vice, Seth Paul Waxman, David Mark Lehn, Pro Hac Vice, Wilmer Cutler Pickering Hale & Dorr LLP, Matthew W. Morrison, Bryan Matthew Stockton, Shelby Leigh Dyl, Pillsbury Winthrop Shaw Pittman, LLP, Washington, DC, for Plaintiff Growth Energy.
Kristin Brudy-Everett, U.S. Attorney's Office for the District of Columbia, Michelle D. Jackson, U.S. Attorney's Office Homicide Section, Matthew Evan Kahn, U.S. Department of Justice Fraud Section, Washington, DC, for Defendants.
Under the Environmental Protection Agency's Renewable Fuel Standard program (RFS), covered oil refineries must introduce a certain volume of renewable fuel, such as ethanol, into the transportation fuel supply each year. From 2015 to 2017, EPA nonetheless granted exemptions to dozens of refineries, finding them to have met the statutory criterion of "disproportionate economic hardship." 42 U.S.C. § 7545(o)(9)(B)(i). Prior to this Freedom of Information Act suit, however, it had not published any records of its decisions to afford or deny such relief to any particular refinery. Prompted by Plaintiff trade associations’ FOIA requests and this litigation, EPA has now produced 72 decision documents from those years, but it has withheld from many of them two elements of information: (i) the petitioner's name and (ii) the location of the facility for which relief was requested. The agency grounds its withholding in FOIA Exemption 4, claiming that disclosing the redacted information would reveal "commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4) ; see ECF No. 58-3 (Vaughn Index) at 2–3. Plaintiffs disagree and now move for partial summary judgment to compel disclosure.
With a minor caveat, the Court sides with the Government. Divulging the identity of the refinery at issue in an RFS determination document would reveal the fact that said refinery applied for the exemption. And for most (but not all) of the refineries at issue, EPA has demonstrated that such information meets all three requirements of Exemption 4: it is commercial or financial, it is obtained from a person, and it is privileged or confidential. As to a small number of redactions, however, the Court will order that EPA reconsider its decision.
Congress first enacted the Renewable Fuel Standard program in the mid-2000s, with the goal of forcing the market to produce increasing volumes of renewable fuel each year. See Renewable Fuel Standard Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019, 82 Fed. Reg. 58,486, 58,487 (Dec. 12, 2017). Under the program, oil refineries are required to produce a certain volume of biofuels as a percentage of the overall volume of fuel they turn out. See id. at 58,488 ; Renewable Fuels Ass'n v. EPA (RFA ), 948 F.3d 1206, 1222 (10th Cir. 2020), cert. granted sub nom. HollyFrontier Cheyenne v. Renewable Fuels Ass'n, No. 20-472, ––– U.S. ––––, ––– S.Ct. ––––, ––– L.Ed.2d ––––, 2021 WL 77244 (U.S. Jan. 8, 2021). "Small refineries" averaging fewer than 75,000 barrels per day of crude-oil throughput, however, may be exempted from RFS requirements "for the reason of disproportionate economic hardship." 42 U.S.C. §§ 7545(o)(1)(K), (9)(B)(i) ; 40 C.F.R. § 80.1441(e)(2).
For years, EPA did not release any information at all about its decisions to grant or deny small-refinery exemptions. After coming under pressure to be less secretive, the agency relented and in 2018 began providing a dashboard with aggregate-level data. See ECF No. 51-1 (Pl. SJ Mot.) at 5; Erin Voegele, Wheeler: EPA to create public ‘dashboard’ on RFS waivers, Biodiesel Magazine (Aug. 2, 2018), https://bit-ly.ezproxy.lib.ntust.edu.tw/39hrz2M. Those data reveal an interesting trend. For the program's first two years, 59 refineries were granted exemptions. See ECF No. 51-1, Exh. A (2011 Small Refinery Exemption Study) at 26. As the industry adjusted to the RFS requirements, the number declined, totaling just seven in 2015. See EPA, RFS Small Refinery Exemptions, https://bit-ly.ezproxy.lib.ntust.edu.tw/3a7pGVH (last visited Jan. 25, 2021). After a change in presidential administrations, however, the number of exemptions again increased substantially, from 19 granted in 2016, to 35 in 2017, and 32 in 2018. Id. EPA's grant rate also skyrocketed, from around 25% for the years 2013 to 2015 to an apex of 95% in 2017. Id. Even as it disclosed these high-level numbers, EPA did not identify the specific refineries that received exemptions, nor did it publish any of its decisions to grant or deny an exemption petition.
That changed after two nonprofit trade associations, known as the Renewable Fuels Association (RFA) and Growth Energy, and one of Growth Energy's member organizations submitted FOIA requests to EPA and one to the Department of Energy seeking information about the specific refineries that had sought exemptions. See ECF No. 1-1, Exhs. B, H, J, M, P, R, U (Requests). After neither agency timely responded to any request, RFA and Growth Energy filed this action on August 30, 2018. See ECF No. 1 (Complaint). The parties ultimately agreed to a production schedule for responsive documents from both agencies. See ECF No. 19 (March 29, 2019, Joint Status Report) at 1–2. DOE completed its production about a month later, although it referred some redacted documents to EPA for further review. See ECF No. 20 (April 29, 2019, Joint Status Report) at 1. EPA, for its part, agreed to a three-phase production schedule. See March 29, 2019, Joint Status Report at 1–2. Phase I encompasses certain final decisions by EPA to grant or deny a small-refinery exemption in 2016 and 2017; Phases II and III contain additional responsive documents, about which the Court will say no more as they are not the subject of the instant Motion.
In early 2020, as part of its Phase I production, EPA initially produced a total of 55 decision documents revealing its exemption decisions in 2016 and 2017. See ECF No. 58-2 (Declaration of Kevin M. Miller), ¶ 19. After providing the affected refineries the ability to submit confidentiality claims regarding their petitions, the agency redacted the petitioner name and/or refinery location from 27 of the decision documents under FOIA Exemption 4. Id., ¶¶ 20, 26. As to the remaining 28 documents for which identifying information was disclosed, EPA concluded that 25 of the petitioning entities did not qualify for confidential treatment under FOIA, and the remaining three had not even claimed the information as private. Id., ¶ 20.
Shortly after that production, the Tenth Circuit decided RFA, 948 F.3d 1206, holding that refineries were not statutorily eligible for a small-refinery exemption in a given year unless they had received one for each prior year going back to the RFS's creation. Because only seven refineries had been granted an exemption in 2015, it follows that many of the exemptions granted by EPA in 2016 and 2017 were unlawful (although that conclusion has no effect on the propriety of withholding information from those decisions under FOIA). Plaintiffs — hoping to learn which refineries received those exemptions — requested that EPA immediately broaden the scope of Phase I to include decision documents from 2015. See ECF No. 47 (Motion for Hearing) at 3. EPA objected that the 2015 documents also likely contained confidential business information (CBI) subject to Exemption 4, and it argued that it should not have to undertake the necessary, time-consuming analysis of that issue until it reached Phase III of the existing phased production schedule. See ECF No. 48 (Response) at 2. This Court eventually resolved the dispute by ordering the agency to either release, or specifically claim as exempt CBI, certain information about the 2015 documents within seven weeks: (1) the petitioner's name; (2) the name and location of the affected facility; (3) the general nature of relief requested; (4) the time period for which relief was requested; and (5) the extent to which EPA granted or denied relief. See Minute Order of July 23, 2020; ECF No. 58 (Def. Opp.) at 5–6. With Plaintiffs’ consent, the Court stayed further production of Phase II and Phase III records. See Minute Order of July 23, 2020.
The agency then timely produced responsive excerpts from the 2015 RFS compliance year of 17 decision documents concerning 14 refineries. See Miller Decl., ¶¶ 23, 32. In seven of those documents, it withheld the petitioner's name and facility location, again claiming that information was covered by Exemption 4. See id., ¶ 24. As to the other ten documents, EPA rejected confidentiality claims from three of the petitioners, and the other seven had not sought to keep the information closely held. Id.
All told, after this additional production, EPA has produced 72 small-refinery-exception decision documents covering the years 2015 through 2017. It has withheld the facility's location in 34 documents and the petitioner's name in 26 of those. Id., ¶¶ 25, 37. Plaintiffs now move for partial summary judgment to resolve whether Exemption 4 permits EPA's withholdings and, they hope, to compel the agency to disclose the names and locations of the affected refineries. See Pl. SJ Mot. at 2. In an effort to better understand the refineries’ submissions and EPA's decisions, the Court ordered the Government to provide for in camera review copies of "the affected...
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