# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 4- 34 05

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Lio n Oi l Co m

pa ny

ll ll ll ll ll ll ll ll ll ll l Peti ti on er

v.

Env iro nm en ta l Pr ot ect io n Ag en cy

ll ll ll ll ll ll ll ll ll ll l Resp on de nt

__ __ __ __ __ __
Pet it io n fo r Rev ie w of a n Ord er o f th e Env iro nm en ta l Pr ot ect io n Ag en cy

__ __ __ __ __ __
Su bm it te d: Ju ne 11 , 20 15 Fil ed : J ul y

8, 2 01 5

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Befo re GRUENDER, BEAM, an d B ENTON, Ci rcu it Ju dg es

.

__ __ __ __ __ __
BENTON, Circu it Ju dg e.

Lio n Oil Co m

pa ny pe ti ti on ed th e Env iro nm en ta l Pro te ct io n Age nc y f o r a n

ex em pt io n fro m th e Ren ewab le Fu el St an da rd pr og ram f o r 20 13

. EPA de ni ed th e
pe ti ti on

. Lio n Oil ap pe al s

. Hav in g juri sd ic ti on un de r 42 U.S.C. § 76 07 (b )(1 ), th is

co ur t af fir m s.I.

The RFS pr og ram se ts an nu al r e n e w ab le -fu el ta rg et s fo r refi ne rie s. Se e 42
U.S.C. § 75 45 (o )

. Refi ne rie s m us t bl en d th ei r sh are of ren ewab le fu el or bu y cred it s fro m th os e who ex ceed bl en di ng req ui rem en ts

. Co ng res s ex em pt ed “ sm al l”
refi ne rie s— 75 ,00 0 b arre ls of c ru de oi l o r le ss pe r da y —fr om RFS ob li ga ti on s un ti l
20 11

. §§ 75 45 (o )(1 )(K)
, 7 5 4 5 ( o ) (9 )(A)(i )

. The ex em pt io n can be ex te nd ed

. The Dep art m en t of th e Ene rg y “ sh al l co nd uc t fo r [EPA] a st ud y to de te rm in e whe th er

co m pl ia nc e wit h [RFS req ui rem en ts ] wou ld im po se a di sp ro po rti on at e e c o no m ic
ha rd sh ip on sm al l refi ne rie s.” § 75 45 (o )( 9 ) ( A )(i i)( I)

. If DOE de te rm in es a sm al l
refi ne ry “ wou ld be su bjec t to a di sp ro p or ti on at e eco no m ic ha rd sh ip if req ui red to

co m pl y ,” EP A “s ha ll ex te nd th e ex em pt io n

. . . fo r a pe rio d of no t le ss th an 2
ad di ti on al y ears .” § 75 45 (o )(9 )(A)(i i)( II )

. Als o, “ A sm al l refin ery m ay at an y ti m e
pe ti ti on [EPA] fo r an ex t e n s i o n o f th e ex em pt io n

. . . fo r th e reas on of
di sp ro po rti on a te eco no m ic ha rd sh ip .” § 75 45 (o )(9 )(B) (i)

. W he n ev al ua ti ng su ch

pe ti ti on s, EP A
, “i n co ns ul ta ti on wit h th e Secr et ary of Ene rg y , sh al l co ns id er th e fin di ng s o f [DOE’ s] st ud y

. . . an d o th er ec on om ic fact or s.” § 7 54 5( o) (9 )(B) (ii )

.

DOE co m pl et ed it s st ud y in 20 11

. It co nc lu de d, “ Dis pr op or ti on at e eco no m ic
ha rd sh ip m

us t en co m

pa ss two br oa d co m

po ne nt s: a hi gh co st of co m pl ia nc e rel at iv e
to th e in du st ry av erag e, an d an effe ct su ffi ci en t to cau se a si gn ifi can t im pa irment of
th e refi ne ry op erat io ns .” To im pl em en t th es e co m

po ne nt s, DOE crea te d a du al -in de x

sc or in g mat r i x

. One in de x m eas ur es di sp ro po rti on at e st ru ct ur al an d eco no m ic
im pa ct ; th e ot he r, RFS co m

pl ia nc e on refi ne r vi ab il it y

. The vi ab il it y in de x ha s th ree

m et ric s— 3a (“ Co m

pl ia nc e co st el im in at es effi ci en cy ga in s” ), 3b (“ In di vi du al sp eci al

ev en t s ” )
, a n d 3c (“ Co m

pl ia nc e co st s li ke ly to le ad to sh ut do wn” ). DOE de fin es

“ in di vi du al sp eci al ev en ts ” as “ Refi ne ry sp eci fic ev en ts (su ch as a sh ut do wn d ue to

an acci de nt , an d su bs eq ue nt lo ss of rev en ue ) in th e rece nt pa st th at ha ve a te m po rary

ne ga ti ve im

pa ct on th e ab il it y

of t he refi ne ry to co m

pl y wit h th e RFS.” Orig in al ly,

-2

-DOE sc or ed al l th ree m et ric s as 0 or 10

. In a May 20 14 ad de nd um to th e st ud y , DOE

ad de d 5 as a po ss ib le sco re fo r m et ric s 3 a an d 3 b (b ut no t m et ric 3c ).

Lio n Oil
, a sm al l refi ne ry in E l D or ad o, A rkan sa s, rece iv ed ex em pt io ns th ro ug h
20 12

. It pe ti ti on ed EPA fo r an ex em pt io n fo r 20 13

. Ci ti ng di sr up ti on to a ke y su pp ly pi pe li n e an d no ti ng it s “ fin an ci al po si ti on ha s no t im pr ov ed ,” Lio n Oil arg ue d th at RFS c om pl ia nc e wou ld cau se di sp ro po rti on at e eco no m ic ha rd sh ip

.

Befo re EPA co ns id e r e d t he pe ti ti on , DOE fir st sc or ed Lio n Oil on DOE’ s

m at rix , as a m en de d b y

th e ad de nd um

. DOE de te rm in ed th at Lio n Oi l d id no t s co re hi gh en ou gh on th e vi ab il it y in de x to sh ow di sp ro po rti on a t e eco no m ic ha rd sh ip

. S p e c i fic al ly, on m et ric 3b
, DOE co nc lu de d th e pi pe li ne di sr up ti on was no t a n

“ in di vi du al sp eci al ev en t” be cau se “ se ve r a l r e f in eri es

. . . were im

pa ct ed by th e red uc ed flo w.” (Lio n Oil ag rees th at th e pi pe li ne d i s r u p t io n affe ct ed fo ur ot he r refi ne rie s.)

EPA’ s 23 -p ag e de ci si on su m m ari zed DOE’ s an al y si s, a “ pr im ary fact or ” in it s de ci si on

. EPA al s o sa id it “ ev al ua te [d ] vi ab il it y

. . . in th e sa m e m an ne r th at DOE

co ns id ers vi ab il it y i n i t s o wn m et ho do lo gy.” EPA di d no t re-s co re Lio n Oil on DOE’ s m at rix

. In st ead , EPA “ in de pe nd en tl y ” an al y zed th e p ip el in e di sr up ti on an d
Lio n Oil ’s bl en di ng cap aci ty, pr ojec te d RFS- co m pl ia nc e co sts , an d fi na

nc ia l posi ti on

.

Lio n Oil req ue sted pr ote ct ion of “ co nf ide nti al bu si ne ss in fo rm at io n.” EPA se nt it s dec is io n to Lio n Oil on ly. At or al arg um en t, Lio n Oil ’s co un se l sai d, “ It’s real ly jus t th e sp eci fic nu m

be rs , th e do ll ar am ou nt s, th e nu mb e r s o f [ c red it s] th at are

co nf id en ti al .”

Lio n Oi l a p p e a l e d to th is co ur t un de r 42 U.S.C. § 76 07 (b )(1 ). The st at ut e

“ lo dg es juri sd ic ti on ov er ch al le ng es to ‘ an y

. . . fin al [EPA] act io n’ in th e Co ur ts of App eal s.” Al

as ka Dep ’t of

Envt l. Co ns er va ti on v. E.P.A.
, 54 0 U.S. 46 1, 48 1 (2 00 4)
,

-3

-qu ot in g § 76 07 (b)( 1)

. Se e al so Whi tm an v. Am

. Truc ki ng As s’ ns , 53 1 U.S. 45 7, 47 7 (2 00 1) (st at in g § 76 07 (b )(1 ) “ gi ve s t he co ur t ju ris di ct io n” ).

Sect io n 76 0 7 ( b ) ( 1 ) h a s th ree pa rts

. Fi rs t, “ A pe ti ti on fo r rev ie w of

. . . an y
ot he r na ti on al ly ap pl ic ab le re g ul at io ns pr om ul ga te d, or fin al act io n ta ke n, by th e Adm in is tra to r u nd er th is ch ap te r m ay be fil ed on ly i n th e” D.C. C irc ui t. 42 U.S.C. § 76 07 (b)( 1)

. Seco nd
, “ A pe ti ti on fo r rev ie w of th e Adm in is tra to r’s act io n

. . . whi ch
is lo cal ly or reg io na ll y ap pl i c a bl e m ay be fil ed on ly in th e Uni te d St at es Co ur t of App eal s fo r th e ap p r o p r i a t e ci rcu it .” Id

. Thi rd
, “ Not wit hs ta nd in g th e pr eced in g

se nt en ce a pe ti ti on fo r rev ie w of an y act io n [th at is lo cal ly or reg io na ll y ap pl ic ab le ]

m ay be fil ed on ly in t he [D.C. Cir cu it ] if s uc h a ct io n i s b as ed on a de te rm in at io n o f

na ti on wid e sc op e or effe ct an d if in ta ki ng su ch act io n th e Adm in is tra to r fin ds an d

pu bl is he s t ha t s uc h a ct io n i s b as ed on su ch a de te rm in at io n.” Id

.

Lio n Oil al so ap pe al ed to th e D.C. Ci rcu it
, w h i c h i s h ol di ng th at ap pe al in
ab ey an ce pe nd in g th i s c o ur t’s de ci si on

. EPA th en m ov ed to di sm is s th is ap pe al
, arg ui ng th e D.C. Ci rcu it ha s ex cl us iv e au th or it y to he ar Lio n Oil ’s ap pe al

. Thi s co ur t

to ok EPA’ s m ot io n wi t h th e cas e. Thi s co ur t al so gr an te d Lio n Oil ’s un op po se d

m ot io n to se al EPA’ s de ci si on an d t h e pa rti es ’ joi nt m ot io n to fil e th ei r br ie fs an d

ap pe nd ix un de r se al

.

II.

The pa rti es ag ree th at EPA’ s pe ti ti on -d en ia l is lo cal ly or reg io na ll y ap pl ic ab le
,
no t na ti on al ly ap pl ic ab le

. Thi s co ur t m ay he ar a pe ti ti on un le ss th e de ni al “ is ba se d

on a de te rmin at io n of na ti on wid e sc op e or effe ct an d if in ta ki ng su ch act io n th e Adm in is tra to r fin ds an d pu bl is he s th at su ch act io n is ba se d on su ch a de te rm in at io n.”
Se e id

.

-4

-In it s de ci si on , EPA st at ed
, “ Th i s d e c i si on is a fin al ag en cy act io n of

na ti on wid e sc op e an d effe ct fo r pu rp os es of [§ 76 07 (b )(1 )].” EPA se nt th e de ci si on
to Lio n Oil on ly. EPA m ad e no an no un cem en t in an y pu bl ic reco rd
, in cl ud i n g i t s web si te

.

EPA arg ue s, “ Lio n Oil ’s pe ti ti on m ay on ly be he ard in th e D.C. Ci rcu it be cau se EPA ha s m ad e an ex pr es s an d un am bi gu ou s de te rm in at io n of na ti on wid e sc op e or effe ct .” Lio n Oil co un te rs th at EPA d id no t pu bl is h th e ne ces sa ry fin d i ng

. Eve n if
EPA pu bl is he d a fin di ng , Lio n Oil arg ue s th is co ur t m us t in de pe nd en tl y co nc lu de th at
EPA’ s ac ti on “ is ba se d o n a de te rm in at io n o f na ti on wid e sc op e o r effe ct .”

Sect io n 76 07 (b )(1 ) do es no t de fin e “ pu bl is he s.” The pa rti es do no t ci te cas es

or le gi sl at iv e hi st or y in te rp ret in g th e te rm

. “ W he n a te rm is un de fin ed
, we gi ve it it s

or di na ry m ean i n g

. ” U

ni te d St at es v. Sa nt os , 55 3 U.S. 50 7, 51 1 (2 00 8) (an al y zi ng di ct io na ry de fin it io ns of “ pr oc eed s” fo r pu rp os es of m on ey -la un de rin g st at ut e). The

or di na ry m ean in g of “ pu bl is h” req ui res so me pu bl ic di st rib ut io n. Se e Web st er’s
In tern at io na l Dict io na ry 18 37 (3 d ed

. 19 61 ) (d efi ni ng “ pu bl is h” as “ to de cl are
pu bl ic ly: m ak e ge ne ral ly kn own ”); Bl ac k ’s La w Dict io na ry 14 28 (1 0t h ed

. 20 14 ) (d efi ni ng “ pu bl is h” as “ [t]o di st rib ut e co pi es (o f a wor k) to th e p u b l i c ” )

. Se e al so Web st er’s In tern at io na l Dicti on ar y 18 36 (3 d ed

. 19 61 ) (d efi ni ng “ pu bl ic ” as “ of
, rel at in g t o, o r affe ct in g t he pe op le as a n o rg an iz ed co m m un it y ”).

EPA do es no t as se rt a di ffer en t m ean in g of “ pu bl is h.” In st ead
, EPA arg ue s fo r

an ex cep ti on be cau se it ho no red Lio n Oil ’s req ue st to pr ot ect cert ai n co nf id en ti al
bu si ne ss in fo rm at io n. Bu t th e pl ai n la ng ua ge of § 76 07 (b )(1 ) pe rm it s no ex cep ti on ,

an d EPA ci te s n o e vi de nc e o f co ng res si on al in te nt to pro vi de on e.

At or al arg um en t, EPA req ue st ed a rem an d “ to al lo w th e ag en cy to fo ll ow th e
req ui red pr oc ed ur e.” Sect io n § 76 07 (b )(1 ) is pl ai n: An ap pe al of EPA act io n “ whi ch
is lo cal ly or reg io na ll y ap pl ic ab le m ay be fil ed on ly in ” th e reg io na l ci rcu it un le ss , at

-5

-l e a s t , “ th e Adm in is tra to r fin ds an d pu bl is he s th at su ch act io n is ba se d on ” a

de te rm in at io n of na ti on wid e sc op e or effe ct

. Se e 42 U.S.C. § 76 07 (b)( 1)

. Und er th e

or di na ry m ean in g of “ pu bl is h,” EPA m us t m ak e pu bl ic di st rib ut io n of it s de ci si on , no t jus t t o t he pe ti ti on er.

Thi s co ur t m ay he ar Lio n Oil ’s ap pe al be cau se EPA di d no t pu bl is h th e

ne ces sa ry fin di ng

. 1

III.

Thi s co ur t “ sh al l

. . . ho ld un la wfu l and se t asi de ag en cy act io n, fin di ng s, an d

co nc lu si on s fo un d to be

. . . arb it rary, cap ric io us , an ab us e of di sc ret io n, or ot he rwis e

no t in acco rd an ce wit h la w.” 5 U.S.C. § 70 6( 2) (A)

. “ [D]ue acco un t sh al l be ta ke n of th e ru le of pr ejud ic ia l erro r.” § 70 6

. Thi s co ur t “ sh al l de ci de al l rel ev an t qu es ti on s of la w, in te rp ret co ns ti tu ti on al an d st at ut or y pr ov is io ns , an d de te rm in e th e m ean in g

or ap pl ic ab il it y

of t he ter m s o f an ag en cy act io n.” Id

.

W hi le § 76 07 (b )(1 ) “ gi ve s th e co ur t juri sd ic ti on ,” W hi tma n , 53 1 U.S. at 47 7, 1 th e pa rti es tre at § 76 07 (b )(1 ) as a ve nu e pr ov is io n. Se e Tex as Mun

. Pow er Ag ency

v. E.P.A.
, 89 F.3 d 85 8, 86 7 (D.C. Ci r. 19 96 ) (“ Giv en th e le ss th an cl ear la ng ua ge , th e st ru ct ur e of th e se ct io n— di vi di ng c a s e s am on g th e ci rcu it s— an d th e le gi sl at iv e hi st or y in di cat e th at [§ 76 07 (b )(1 )] is fram ed m or e as a ve nu e pr ov is io n.” ). Bec au se EPA f ai le d to pu bl is h a fin di ng , th is co ur t ne ed no t reac h whe th er § 76 07 (b )(1 ),
pa rti cu la rly its th ird sen te nc e, is al so a ve nu e pr ov is io n— jus t as t hi s co ur t n eed no t de ci de whe th er EPA’ s act io n “ is ba se d o n a d e te rm in at io n of na ti on wid e sc op e or effe ct .”

-6

-A.

Lio n Oil arg ue s th at DOE’ s “ sc or in g de ci si on [o n m et ric 3b ] was fla wed
, an d
EPA act ed arb it rari ly an d cap ric io us ly in us in g it is as a ba si s fo r it s reject io n of Lio n Oil ’s pet it io n.”

“ An ag en cy de ci si on is arb it rary or cap ric io us if: th e a ge nc y ha s rel ie d on fact or s whi ch Co ng res s ha s no t in te nd ed it to co ns id er, en ti rel y fai le d to co ns id er an im po rta nt as pe ct of th e pr ob le m , of fere d an ex pl an at io n f

o r i t s de ci si on th at ru ns

c o u n t er to th e ev id en ce be fo re th e ag en cy , or is so im pl au si bl e th at it co ul d n o t b e

as cri be d to a di ffer en ce in vi ew or th e pr od uc t of ag en cy ex p e r t i s e

. ” El Dor ad o Chem

. Co

. v. E.P.A.
, 76 3 F.3 d 95 0, 95 5- 56 (8 th Ci r. 20 14 ). “ The sc op e of ou r rev ie w is na r r o w a n d w e a r e no t to su bs ti tu te ou r jud gm en t fo r th at of th e ag en cy .” Id

. at
95 6, ci ti ng Mo to r V

ehi cl e Mfr s. As s’ n o f U.S., Inc . v. S

ta te Fa rm Mut

. A ut o. In s. Co

. , 46 3 U.S. 2 9, 4 3 (1 98 3)

.

EPA di d n o t a r bi tra ril y us e DOE’ s sc or in g de ci si on

. Rat he r, EPA di d as Co ng res s di rect ed

—“ in co n s u lt at io n wit h th e Secr et ary of Ene rg y , [EPA]

co ns id er[e d] th e fin di ng s of [DOE’ s] st ud y .” Se e 42 U.S.C. § 75 45 (o )(9 )(B) (ii )

. EPA

sa id DOE’ s an al y si s was a “ pr im ary fact or ” in EPA’ s de ci si on

. EPA “ev a l u at e[d ]
vi ab i l i t y

. . . i n th e sa m e m an ne r th at DOE co ns id ers vi ab il it y in it s own

m et ho do lo gy.” EPA the n “ in de pe nd en tl y ” an al y zed th e pi pe li ne di sr up ti on , no ti ng it “ affe ct ed se ve ral ot he r refi ne rie s, an d th us was no t a ‘spe ci al e v e n t ’ s p eci fic to Lio n.” EPA al so co nt ex tu al iz ed th e di sr u p t i on ’s im pa ct on Lio n Oil ’s fin an ci al

po si ti on

.

Lio n Oil cl ai m s D O E’s sc or in g “ was fla wed .” To th e ex te nt Lio n Oil can ch al le ng e DOE’ s sc or in g on m et ric 3b
, it was pr op er. The st ud y de fin ed “ in di vi du al

sp eci al ev en ts ” as “ Refi ne ry sp eci fic ev en ts (s uc h as a sh ut do wn du e to an acci de nt ,

an d su bs eq ue nt lo ss of rev en ue ) in th e rece n t pa st th at ha ve a te m po rary ne ga ti ve

-7

-im

pa ct on th e ab il it y of th e refi ne ry to co m pl y wit h t he RFS.” Li on Oil ag rees th at th e di sr up ti on affe ct ed fo ur ot he r refi ne rie s. By th e st ud y ’s de fin it io n, th e di sr up ti on

was no t “ refi ne ry

sp eci fic .”

B.

Lio n Oil ’s ot he r arg um en ts fo cu s on DOE’ s ad de nd um

. Bec au s e EPA, no t
D O E, is th e res po nd en t, Lio n Oil ’s th em e is th at DOE’ s sc or in g was “ ou tc om e

de te rm in at iv e.” Eve n if DOE’ s sc or in g was “ ou tc om e-d et erm in at iv e,” Lio n Oil fai ls

to sh ow ho w th e a v a i l ab il it y of an in te rm ed ia te sc or e pr ejud ic ed Lio n Oil

. Se e 5 U.S.C. § 7 06

.

1.

Lio n Oil arg ue s th at th e ad de nd um was un la wfu l be cau se it was no t ad eq ua te ly

ex pl ai ne d. An ag en cy m

us t “ pr ov id e reas on ed ex pl an at io n fo r it s act io n” an d “ sh ow th at th ere are goo d reas on s for th e ne w po li cy .” F.C.C. v. Fo x Telev is io n St

at io ns , In c. , 55 6 U.S. 50 2, 51 5 (2 00 9)

. “ Bu t it ne ed no t de m on st rat e to a co ur t’s sa ti sf act io n
t h a t t h e r e a s on s fo r th e ne w po li cy are be tt er th an th e reas on s fo r th e ol d on e; it

su ffi ces th at th e ne w po li cy is pe rm is si bl e un de r th e st at ut e , t h at th ere are go od

reas on s fo r it
, an d th at th e ag en cy be li eves it to be be tt er, whi ch th e co ns ci ou s ch an ge of co ur se ad eq ua te ly ind ic at es .” Id

.

In th e ad de nd um , DOE sa id m et ric s 3a an d 3b m eas ur e “ im pa ct s th at m ay oc cu r

acro ss a co nt in uu m , an d pr ov id in g fo r th e po ss ib il it y of an in te rm ed ia te sc or e al lo ws DOE t o m or e accu rat el y as se ss an in d i v i du al refi ne ry ’s e co no m ic si tu at io n.” In it s d eci si on de nyin g Lio n Oil ’s pe ti ti on , EPA no te d, “ DOE ad de d a 5 as a p o s s i b l e in te rm ed ia te sc or e

. . . to m or e ac c u r a t e l y ch arac te riz e th e im pa ct s of co m

pl ia nc e

co st s (3 a) o r in di vi du al sp eci al ev en ts (3b ) on a refi ne ry .”

-8

-Lio n Oil arg ue s th at DOE an d EPA of fere d “ no t an ex pl an at io n fo r th e ch an ge bu t m erel y a de sc rip ti on of it .” To th e co nt rary, DOE an d EPA pr ov id ed a “ reas on ed

ex pl an at io n” an d “ go od reas on s.” Se e id

. The i nt erm ed ia te sco re “ al lo ws fo r m or e

nu an ced a n d a c c ur at e ch arac te riz at io n of th e” refi ne ry ’s si tu at io n. Se e Her m es Co ns ol ., LLC v. E.P.A.
, 20 15 W L 34 61 36 0, at *5
, *1 0 (D.C. Ci r. Ju ne 2, 20 15 ) (v acat in g EPA’ s de ni al of sm al l refi ne ry ’s ex em pt io n pe ti ti on be cau se EPA co nc ed ed
it m ad e two m is cal cu la ti on s ab ou t p et it io ne r’s fin an ci al da ta ).

2.

Lio n Oil arg ue s th at th e ad de nd um req ui red no ti ce-a nd -co m m en t ru le m ak in g.

“ Age nc ie s m

us t co nd uc t ‘rule m ak in g’ in acco rd wit h th e [Ad m in is tra ti ve Pro ced ur e Act’s] no ti ce an d co m

m en t pr oc ed ur es .” Io wa Lea gu e of Ci ti es v. E.P.A.
, 71 1 F.3 d
84 4, 85 5 (8 th Ci r. 20 13 ). Se e 5 U.S.C. § 55 3 (“ Ru le m ak in g” ). “ Howev er, on ly ne w ‘leg is la ti ve ’ ru le s a r e req ui red to be crea te d pu rs ua nt to no ti ce an d co m m en t

ru le m ak in g,” no t “ in te rp ret at iv e ru le s” or “ ge n eral st at em en ts of po li cy .” Io wa Lea gu e o f Ci ti es , 71 1 F .3d at 8 55

.

Acco rd in g to Lio n Oil
, th e ad de nd um is “ a le gi sl at iv e ru le ” be cau se EPA “ ga ve [th e ad de nd um ] co nc lu si ve effe ct .” Lio n Oil ci t es Gen er al Elec tr ic Co mpa ny v. E.P. A.
, 2 9 0 F

. 3d 37 7, 38 3 (D.C. Ci r. 20 02 ): “ [A]n ag en cy pr on ou nc em en t wil l be

co ns id ered bi nd in g as a pr act ic al m at te r if it ei th er ap pe ars on it s face to be bi nd in g,

or is ap pl ie d b y

th e ag en cy

in a way th at in di cat es it is bi nd in g.”

Lio n Oil ’s fact ua l pr em is e fai ls

. EPA di d no t gi ve th e ad de nd um “ co nc lu si ve effe ct ,” no r co ul d it
, as EPA do es no t sc or e pe ti ti on s on DOE’ s m at rix

. Rat he r, EPA
di d as Co ng res s di rect ed —“ in co ns ul ta ti on wit h th e Secr et ary of Ene rg y , [ EPA]

co ns id er[e d] th e fin di ng s of [DOE’ s] st ud y

. . . an d ot he r eco no m ic fact or s.” Se e 42
U.S.C. § 75 45 (o )(9 )(B) (ii )

. EPA s a i d D O E’ s an al y si s was a “ pr im ary fact or ” in
EPA’ s de ci si on , an d EPA “ ev al ua te [d ] vi ab il it y

. . . i n t h e sa m e m an ne r th at DOE

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-co ns id ers vi ab il it y in it s own m et ho do lo gy.” EPA al so “ in de pe nd en tl y ” an al y zed th e

p i p e l i ne di sr up ti on an d Lio n Oil ’s bl en di ng cap aci ty, pr ojec te d RFS- co m pl ia nc e

co st s, an d fin an ci al po si ti on

. Se e H e r m e s , 20 15 W L 34 61 36 0, at *6 (rejec ti ng

ar gum en t tha t ad de ndum re qui re d notic e-an d- co m m en t ru le m ak in g beca

use pe tit ion er “p o i n ts us to no au th or it y su gg es ti ng th at th e de ci si on to m ak e av ai la bl e a mo r e refi ne d sc or e wit hi n an al read y -ex is ti ng m et ric req ui res no ti ce-a nd -co m m en t

pr oc ed ur es ” an d fi nd in g “ no ba si s fo r crea ti ng su ch a ru le ”).

3.

L ion O il argu es th at EPA un reas on ab ly in te rp ret ed “ di sp ropor tio na te ec onom ic
h a rd sh ip ” to m ean lo ng -te rm vi ab il it y , pa rti cu la rly as cred it s be cam e m or e c o s t l y.

“ W he re a st at ut e do es no t de fin e a te rm , an d Co ng res s ha s de le ga te d au th or it y to an
ag en cy to im

pl e men t a n am

bi gu ou s st at ut e, we are req ui red to acce pt th e ag en cy ’s

st at ut or y in te rp ret at io n, so lo ng as it is reas on ab le .” Fa st v. Ap pl eb ee’s In t’l

, I nc. , 63 8 F.3 d 87 2, 87 6 (8 th Ci r. 20 11 ), ci ti ng Chev ro n, U.S.A., In c. v. Nat ur al Res

. Def.
Co unci l, I

nc. , 46 7 U.S. 8 37 , 84 4- 45 (19 84 ).

EPA’ s in te rp ret at io n of “ di sp ro po rti on at e ec o n o mi c ha rd sh ip ” is reas on ab le

.

“ [T]he rel at iv e co st s of co m pl ia nc e al on e can no t de m on st rat e eco no m ic ha rd sh ip
be cau se al l refi ne rie s face a di rect co st as so ci at ed wit h pa rti ci pa ti on in th e pr og ram

. Of co ur se , so m e refi ne rie s wil l face hi gh er co st s th an ot he rs , bu t whe th er th os e co st s im po se di sp ro po rti on at e ha rd sh ip on a gi ve n refi ne ry pr es en ts a di ffer en t qu es ti on .”
Her m es , 20 15 W L 34 61 36 0, at *5

. EPA ad op te d DOE’ s de te rm in at io n “ th at th e be st

way to m eas ur e ‘hard sh ip ’ en ta il ed ex am in in g th e im pa ct of co mp l i a n c e co st s on a refi ne ry ’s ab il it y to m ai nta in pr of ita bil it y an d co m

pe ti ti ve ne ss

— i.e.
, vi ab il it y —i n th e lo ng ter m .” Id

. “ [T]hat ch oi ce l ie s wel l wi th in th e ag en cy ’s di sc ret io n.” Id

.

-1 0-4.

Lio n Oil arg ue s th e ad de n du m ’s “ arb it rari ne ss

. . . is he ig ht en ed by EPA’ s fai lu re to ap pl y th e rev is ed sc or in g m et ho do lo gy co ns is te nt ly.” Lio n Oil ci te s a le tt er fro m EPA to th e D.C. Ci rcu it in th e Her mes cas e. The re, EPA ack no wled ge d th at DOE ga ve so m e pr e-ad de nd um pe ti ti on ers a 5 fo r m et ric s 3a an d 3c —wh en a 5 was

no t yet an op ti on (an d s ti ll is no t fo r m et ric 3c ).

Aga in
, EPA, no t DOE, is th e res po nd en t he re. Lio n O i l d o e s n o t sh ow t ha t
EPA rel ie d on DOE’ s sc or in g de ci si on s in th os e pe ti ti on s. Eve n if EPA di d, Li on Oil

was no t p reju di ced

. Se e 5 U.S.C. § 70 6

.

* * * * * * *

EPA’ s d en ia l o f Lio n Oi l’s p et it io n i s af fir m ed

.

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