Court Opinion

ID: 6337983
Source: CourtListenerOpinion
Date Created: 2022-05-05 15:01:21.508323+00
Date Added: 2024-06-11T09:25:09.365141
License: Public Domain

UNITED STATES DISTRICT COURT
                                 FOR THE DISTRICT OF COLUMBIA

    CROSS OIL REFINING & MARKETING,
    INC.,
                                                              Civil Action No. 21-1825 (JMC)
                            Plaintiff,

                            v.

    MICHAEL S. REGAN,

                            Defendant.

                                         MEMORANDUM OPINION
         Plaintiff Cross Oil and Defendant Michael S. Regan, the Administrator of the

Environmental Protection Agency (EPA), have cross-moved for summary judgment. ECF 11; ECF

13. The Parties agree that the Administrator’s failure to decide Cross Oil’s petition for a hardship

exemption from Congress’s renewable-fuel program within ninety days of receipt of the petition

violates 42 U.S.C. § 7545(o)(9)(B). And the Parties’ requested deadlines for the EPA to decide

Cross Oil’s petition overlap. This Court thus GRANTS Cross Oil’s motion for summary judgment,

ECF 11, and DENIES the Administrator’s cross-motion as moot. The Administrator is

ORDERED to decide Cross Oil’s petition within thirty days of the issuance of this Order.1

I.       BACKGROUND

         Congress’s renewable-fuel program is codified at 42 U.S.C. § 7545(o). The program

imposes volume restrictions on refineries; these restrictions are administered by the EPA. See

1
  Unless otherwise indicated, the formatting of citations has been modified throughout this opinion, for example, by
omitting internal quotation marks, emphases, citations, and alterations and by altering capitalization. All pincites to
documents filed on the docket in this case are to the automatically generated ECF Page ID number that appears at the
top of each page.

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§ 7545(o)(2)(B)(ii). Relevant here are two neighboring subparagraphs that apply to small

refineries: subparagraph A (§ 7545(o)(9)(A)) and subparagraph B (§ 7545(o)(9)(B)).

       Under subparagraph A(i), Congress temporarily exempted all small refineries from the

renewable-fuel program’s obligations until 2011. See § 7545(o)(9)(A)(i). Congress also ordered

the Secretary of Energy to study whether small refineries’ compliance with the renewable-fuel

program    would    cause    “disproportionate    economic     hardship”    to   those   refineries.

§ 7545(o)(9)(A)(ii)(I). If the Secretary of Energy determined that a small refinery would suffer

such hardship, subparagraph A(ii) directed the EPA Administrator to extend the subparagraph A(i)

blanket exemption by two-or-more years. See § 7545(o)(9)(A)(ii)(II).

       Turning to subparagraph B, Congress commanded that “a small refinery may at any time

petition the [EPA] Administrator for an extension of the exemption under subparagraph (A) for

the reason of disproportionate economic hardship.” § 7545(o)(9)(B)(i). Congress set a “deadline

for action on petitions”: “The [EPA] Administrator shall act on any petition submitted by a small

refinery for a hardship exemption not later than 90 days after the date of receipt of the petition.”

§ 7545(o)(9)(B)(iii) (emphasis added).

       Put simply: small refineries were exempt from the renewable-fuel program until 2011

under subparagraph A(i)’s blanket exemption, could be exempt until at least 2013 under

subparagraph A(ii)’s two-year-plus extension, and could petition for a hardship exemption under

subparagraph B.

       Cross Oil is a small refinery. ECF 11-1 at 1. On May 11, 2020, Cross Oil petitioned the

EPA for a hardship exemption under subparagraph B; the EPA received the petition on or around

the same day. Id. at 2. Per subparagraph B’s ninety-day mandate, the EPA’s decision on Cross

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Oil’s petition was due on or around August 10, 2020. The EPA has yet to act on Cross Oil’s

petition. ECF 13 at 1-2.

           Cross Oil sued the EPA in the District Court of the District of Columbia on July 8, 2021,

seeking to compel the EPA to grant or deny its petition. ECF 1 ¶¶ 1-3. On November 16, 2021, the

Parties jointly moved to stay the case pending settlement negotiations. ECF 7. The Court granted

the joint motion, ordering the Parties to update the Court every thirty days. 9/25/21 Min. Order.

           On December 7, 2021, the EPA issued the “Proposed RFS Small Refinery Exemption

Decision.” In that proposed decision, the EPA conveyed that none of the sixty-five small refineries

with pending subparagraph B petitions—including Cross Oil—have demonstrated that compliance

with the renewable-fuel program has caused disproportionate economic hardship. So the EPA

proposed to deny all sixty-five petitions and presented available data on the program’s costs and

market dynamics for public review and comment. ECF 8-1 at 66-67.

           Cross Oil and the EPA filed a joint status report on December 16, 2021. ECF 8. Pointing

to subparagraph B’s command that “the [EPA] Administrator shall act . . . not later than 90 days

after the date of receipt of the petition,” § 7545(o)(9)(B)(iii) (emphasis added), Cross Oil urged

the Court to lift the stay. ECF 8 at 3-4. The EPA requested that the stay remain in place as it worked

to turn its proposed decision into a final decision. Id. at 4-5. Agreeing with Cross Oil, the Court

lifted the stay. 2/20/22 Hr’g Tr. at 13. The Parties then cross-moved for summary judgment. ECF

11; ECF 13. The EPA’s cross-motion conceded liability and briefed only the issue of remedy. ECF

13 at 1.

II.        LEGAL STANDARD

           A party moving for summary judgment bears the burden of showing that no genuine

dispute as to any material fact exists and the movant’s entitlement to judgment as a matter of law.

Fed. R. Civ. P. 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine
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dispute of material fact exists “if the evidence, viewed in a light most favorable to the nonmoving

party, could support a reasonable jury’s verdict for the non-moving party.” Hairston v. Vance-

Cooks, 773 F.3d 266, 271 (D.C. Cir. 2014). When resolving cross-motions for summary judgment,

courts must determine whether either side merits judgment as a matter of law. See Trudel v.

SunTrust Bank, 288 F. Supp. 3d 239, 245 (D.D.C. 2018).

III.   ANALYSIS

       Subparagraph B’s use of the word “shall” clearly requires the EPA Administrator to decide

a small refinery’s hardship exemption no later than ninety days after the petition is received. See

Kingdomware Techs., Inc. v. United States, 579 U.S. 162, 171 (2016) (explaining that “‘shall’

usually connotes a requirement” and that “when a statute distinguishes between ‘may’ and ‘shall,’

it is generally clear that ‘shall’ imposes a mandatory duty.”); compare § 7545(o)(9)(B)(i) (“A small

refinery may at any time petition the Administrator for an extension of the exemption under

subparagraph (A) for the reason of disproportionate economic hardship” (emphasis added)), with

§ 7545(o)(9)(B)(iii) (“The Administrator shall act on any petition submitted by a small refinery

for a hardship exemption not later than 90 days after the date of receipt of the petition.” (emphasis

added)).

       Here, the EPA concedes both that it “must decide any such [subparagraph B] petition no

later than 90 days after the date the petition is received” and “that [the EPA] failed to perform its

nondiscretionary duty to respond by [subparagraph B’s] statutory deadline.” ECF 13 at 1-2.

Accordingly, summary judgment is properly granted to Cross Oil as to the issue liability.

       Because everyone is on the same page that the EPA has violated subparagraph B, this Court

invokes its equitable authority to set a deadline for the EPA Administrator to decide Cross Oil’s

petition. See NRDC v. Train, 510 F.2d 692, 705 (D.C. Cir. 1974) (“The authority to set enforceable

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deadlines both of an ultimate and an intermediate nature is an appropriate procedure for exercise

of the court’s equity powers to vindicate the public interest.”).

       Cross Oil contends that the EPA Administrator should be compelled to decide the

refinery’s petition within thirty days of the issuance of this order. ECF 11 at 1. For the reasons

supplied in the refinery’s briefing, the Court agrees with Cross Oil that thirty days is a reasonable

deadline. ECF 11; ECF 16. The Administrator requests a deadline of June 3, 2022—which is

within thirty days after the issuance of this order. ECF 13 at 1. Because of the timing of the Parties’

briefing of their cross-motions, the EPA’s opposition to Cross Oil’s proposed deadline has

evaporated. Id. at 6 n.2 (“[The] EPA does not necessarily oppose Cross Oil’s motion, so long as

the Court does not order [the] EPA to issue a decision on Cross Oil’s petition before June 3,

2022.”). The Court will thus order the EPA to decide Cross Oil petition within thirty days and

denies the EPA’s cross-motion as moot.

IV.    CONCLUSION

       Cross Oil correctly contends—and the EPA Administrator concedes—that the EPA has

violated § 7545(o)(9)(B). And the Parties’ proposed deadlines for the EPA to decide Cross Oil’s

petition overlap. Cross Oil’s motion for summary judgment, ECF 11, is thus GRANTED and the

EPA Administrator’s cross-motion, ECF 13, is DENIED as moot. The Administrator is thus

ORDERED to decide Cross Oil’s petition within thirty days of the issuance of this order.

       SO ORDERED.

       DATE: May 5, 2022

                                                                    Jia M. Cobb
                                                               U.S. District Court Judge

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