Court Opinion

ID: 9915932
Source: CourtListenerOpinion
Date Created: 2024-01-09 01:00:40.372196+00
Date Added: 2024-06-11T13:21:58.463583
License: Public Domain

Case: 22-60146    Document: 00517025750       Page: 1    Date Filed: 01/08/2024

           United States Court of Appeals
                for the Fifth Circuit
                                                                    United States Court of Appeals
                                                                             Fifth Circuit

                              ____________                                 FILED
                                                                      January 8, 2024
                               No. 22-60146                           Lyle W. Cayce
                              ____________                                 Clerk

   State of Louisiana; State of Alabama; State of
   Arkansas; State of Kentucky; State of Missouri; State
   of Montana; State of Oklahoma; State of South
   Carolina; State of Tennessee; State of Texas; State of
   Utah,

                                                                 Petitioners,

                                    versus

   United States Department of Energy; Jennifer
   Granholm, Secretary, U.S. Department of Energy,

                                                                Respondents.
                 ______________________________

                        On Petition for Review of an
                     Order of the Department of Energy
                   Agency No. EERE-2021-BT-STD-0002
                      87 Fed. Reg. 2673 (Jan. 19, 2022)
                 ______________________________

   Before Clement, Oldham, and Wilson, Circuit Judges.
   Andrew S. Oldham, Circuit Judge:
         In 2022, the Department of Energy tightened the regulatory regime
   surrounding America’s dishwashers and laundry machines. Petitioners sued.
   The Department’s actions were arbitrary and capricious. So we grant the
   petition and remand to the Department.
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                                   No. 22-60146

                                        I.
          In 2018, the Competitive Enterprise Institute (“CEI”) submitted a
   petition for rulemaking to the Department of Energy (“DOE” or the
   “Department”). See 5 U.S.C. § 553(e) (“Each agency shall give an interested
   person the right to petition for the issuance, amendment, or repeal of a
   rule.”); see also Petition for Rulemaking on a New Product Class of Fast
   Dishwashers, 83 Fed. Reg. 17771 (Mar. 21, 2018) (“CEI Petition”).
   According to CEI, the Department’s burdensome energy regulations made
   dishwashers incapable of, well, washing dishes. CEI asked the Department to
   define a new class of dishwashers under the Energy Policy and Conservation
   Act of 1975, Pub. L. No. 94-163, 89 Stat. 871, codified (as amended) at 42
   U.S.C. §§ 6201 et seq. (“EPCA”). CEI proposed that the new class should
   be comprised of dishwashers with a normal cycle duration of under one hour.
   See 42 U.S.C. § 6295(a)(2) (empowering the DOE to define new classes of
   regulated appliances). CEI anticipated that the new class might offer better
   performance than currently available machines in part because it would not
   need to comply with the energy and water restrictions otherwise applicable
   to consumer dishwashers today. See CEI Petition, 83 Fed. Reg. at 17776.
          DOE responded favorably to CEI’s petition. It published a Notice of
   Proposed Rulemaking (“NPRM”) under the Administrative Procedure Act
   (“APA”). See NPRM, 84 Fed. Reg. 33869 (July 16, 2019). The NPRM
   proposed the new dishwasher class that CEI had requested. See ibid. In
   October 2020, the DOE adopted a final rule defining the class as “standard
   residential dishwashers with a cycle time for the normal cycle of one hour or
   less from washing through drying.” See Establishment of a New Product
   Class for Residential Dishwashers, 85 Fed. Reg. 68723 (Oct. 30, 2020) (the
   “2020 Dishwasher Rule”).

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          On its own initiative, the Department then decided to take analogous
   action on laundry machines. See Notice of Proposed Rulemaking, 85 Fed.
   Reg. 49297 (Aug. 13, 2020) (“2020 Laundry NPRM”). DOE in December
   2020 released a final rule creating new classes of “top-loading consumer [i.e.,
   residential] clothes washers and consumer clothes dryers” with a “normal
   cycle time of less than 30 minutes.” See Establishment of New Product
   Classes for Residential Clothes Washers and Consumer Clothes Dryers, 85
   Fed. Reg. 81359 (Dec. 16, 2020) (the “2020 Laundry Rule”). DOE also
   created a class of “front-loading” residential washers with a normal cycle
   under 45 minutes. Id. at 81359–60. DOE explained that both of its 2020 rules
   “re-affirmed the Department’s recognition of cycle time as a valuable
   consumer utility.” Id. at 81361.
          On the day of his inauguration, President Biden issued an Executive
   Order directing DOE and other agencies to reconsider certain rules,
   including the 2020 Dishwasher Rule and the 2020 Laundry Rule. See Exec.
   Order No. 13,990, 86 Fed. Reg. 7037 (Jan. 20, 2021); see also Fact Sheet: List
   of Agency Actions for Review, White House (Jan. 20, 2021),
   https://perma.cc/9MWM-EWQ3. In August 2021, the Department issued a
   new NPRM, this time proposing to delete the appliance classes created by
   the 2020 Rules. See Notice of Proposed Rulemaking, 86 Fed. Reg. 43970
   (Aug. 11, 2021). A new final rule, which we call the Repeal Rule, was issued
   in January 2022. It revoked both the 2020 Dishwasher and the 2020 Laundry
   Rules. See Final Rule, 87 Fed. Reg. 2673 (Jan. 19, 2022) (the “Repeal Rule”).

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          A group of States, led by Louisiana, petitioned our court for review of
   the Repeal Rule. 1
                                           II.
          “Jurisdiction is always first.” Arulnanthy v. Garland, 17 F.4th 586, 592
   (5th Cir. 2021) (alteration adopted). We (A) begin with the Constitution’s
   jurisdictional requirements. Then we (B) explain that at least one State
   properly invoked our jurisdiction.
                                           A.
          “Article III of the Constitution limits federal courts’ jurisdiction to
   certain ‘Cases’ and ‘Controversies.’” Clapper v. Amnesty Int’l USA, 568
   U.S. 398, 408 (2013). “One element of the case-or-controversy requirement
   is that plaintiffs must establish that they have standing to sue.” Ibid.
   (quotation omitted). One party with standing satisfies the constitutional
   requirement. See Town of Chester v. Laroe Estates, Inc., 581 U.S. 433, 439
   (2017) (“[W]hen there are multiple plaintiffs[,] [a]t least one plaintiff must
   have standing to seek each form of relief requested.” (emphasis added)).
          To establish constitutional standing, a plaintiff must show an “injury
   in fact” that is “fairly traceable” to the defendant’s action and “likely” to
   be “redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S.
   555, 560−61 (1992). The States assert several theories of standing. DOE
   disputes all of them. We find the States succeed on their first theory and
   therefore decline to reach their others.

          _____________________
          1
            The States are Alabama, Arizona, Arkansas, Kentucky, Louisiana, Missouri,
   Montana, Oklahoma, South Carolina, Tennessee, Texas, and Utah. Arizona subsequently
   dropped out of the litigation.

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          This first standing theory advanced by the States relies on Weissman
   v. National Railroad Passenger Corporation, 21 F.4th 854 (D.C. Cir. 2021). In
   Weissman, the D.C. Circuit explained that the “lost opportunity to
   purchase” products precluded by regulation constitutes an injury in fact. Id.
   at 857. The D.C. Circuit, reviewing forty years’ worth of administrative law
   cases, concluded that compression in market availability of “desirable
   features” represents an injury to participants in the relevant market. Id. at
   858−59. A market participant with many choices is advantaged relative to a
   participant with fewer choices, and market participants are therefore injured
   when their choices are constrained by regulation. See also, e.g., Coal. for
   Mercury-Free Drugs v. Sebelius, 671 F.3d 1275, 1281 (D.C. Cir. 2012);
   Orangeburg v. FERC, 862 F.3d 1071, 1077–78 (D.C. Cir. 2017); Chamber of
   Com. v. SEC, 412 F.3d 133, 138 (D.C. Cir. 2005); Consumer Fed’n of Am. v.
   FCC, 348 F.3d 1009, 1012 (D.C. Cir. 2003); Competitive Enter. Inst. v.
   NHTSA, 901 F.2d 107, 112–13 (D.C. Cir. 1990); Ctr. for Auto Safety v.
   NHTSA, 793 F.2d 1322, 1324 (D.C. Cir. 1986); Cmty. Nutrition Inst. v. Block,
   698 F.2d 1239, 1246–47 (D.C. Cir. 1983), rev’d on other grounds, 467 U.S. 340
   (1984).
         DOE gives us no reason to depart from this long-held view of our sister
   circuit. Instead, it argues that federal standing doctrine should embrace a
   Government-always-wins rule. Its argument goes like this:

      • DOE’s Repeal Rule precluded manufacturers from making
        dishwashers or laundry machines under the 2020 Rules;

      • Because no manufacturer had a chance to make the new machines, the
        States cannot show they would purchase the never-made machines;

      • Therefore, no one could ever have standing to challenge the Repeal
        Rule because no one could ever purchase the nonexistent products.
   Red Br. 16. Heads the Government wins; tails petitioners lose.

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          We agree with the D.C. Circuit, which has rejected similar arguments
   by agency defendants. Consider Center for Auto Safety. In that case, the
   petitioners argued that the National Highway Traffic Safety Administration
   (“NHTSA”) should have set more stringent fuel standards, and that
   NHTSA’s failure to do so meant the petitioners would lose the opportunity
   to purchase the efficient vehicles that would have been produced in a more
   highly regulated world. Ctr. for Auto Safety, 793 F.2d at 1332. NHTSA there,
   like DOE here, argued that the agency’s action did nothing to alter the
   choices available to the petitioners at the immediate moment. Ibid. But the
   court rejected that position, holding that the petitioners “plainly” had
   standing because the choices available to them would shift in response to the
   agency action the petitioners contested. Id. at 1324.
          Likewise in Competitive Enterprise Institute, the petitioners complained
   that an agency’s regulations might prevent them from buying larger (and
   presumably less efficient) cars. 901 F.2d at 112. Like DOE here, the parties
   disputing jurisdiction there argued that the petitioners “[could not] point to
   any specific car or model that they have been prevented from buying because
   of [the regulation at issue].” Id. at 113. The court promptly rejected that
   argument, finding that the loss of choice created by regulation represented an
   injury. Ibid. It also held that some showing of a “causal link” between the
   petitioners’ loss of choice and the regulation sufficed for showing
   redressability. Id. at 114; see also Consumer Fed. of Am., 348 F.3d at 1012 (the
   possibility, not certainty, of a single subscriber purchasing internet service on
   terms other than what FCC action made available sufficed for injury in fact);
   Orangeburg, 862 F.3d at 1077−80 (lost opportunity to purchase wholesale
   power on desirable terms constituted an injury in fact, even when
   substitutable products existed and even where existing contracts precluded a
   status quo change for five years); Cf. Chamber of Com., 412 F.3d at 138
   (finding that challenger to investment fund regulations had standing even

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   when “there is no evidence a fund of the type in which the Chamber wants
   to invest would perform better” than those the SEC permitted).
                                         B.
          So too here. DOE’s presently existing energy and water requirements
   would not have applied to the short-cycle appliance classes created in the
   2020 Rules and eliminated by the Repeal Rule. That means petitioners have
   lost the opportunity to purchase faster and more efficacious appliances. The
   States are injured to the extent of that lost opportunity. And the magnitude
   of this lost option is not material to the standing inquiry because the inquiry
   turns only on whether an injury “actually exist[s].” See Spokeo, Inc. v. Robins,
   578 U.S. 330, 340 (2016) (describing the concreteness requirement for injury
   in fact); Cf. Mims v. Arrow Fin. Servs., 565 U.S. 368, 377 (2012)
   (“Recognizing the responsibility of federal courts to decide claims, large or
   small, arising under federal law, Congress in 1980 eliminated the amount-in-
   controversy requirement in federal question . . . cases.”).
          Here, the States submitted multiple declarations to establish they
   own, operate, and maintain residential appliances—including dishwashers,
   clothes washers, and clothes dryers. See, e.g., Decl. of Katherine Goldcamp
   ¶¶ 5, 7; Decl. of John Patrick Eckler ¶ 4; Decl. of Kurt Sager ¶ 4. The States
   further established that, given an opportunity, they would replace those
   appliances with faster ones that are affected by the Repeal Rule. For example,
   Colonel Sager testified on behalf of the Montana Highway Patrol, which uses
   residential appliances in its bunkhouses. He stated:
          Appliances including dishwashers, clothes washers, and
          clothes dryers with faster normal-cycle completion times that
          also maintain cleaning and drying effectiveness, such as
          dishwashers that complete a normal cycle in one hour or less,
          are desirable in the bunkhouse setting. Such features are
          beneficial and productivity enhancing, since they would permit

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          faster washing and completion of additional cycles during the
          workday.
   Sager Decl. ¶ 8. That suffices to trace the State’s injury (denial of an
   opportunity to purchase the relevant appliances) to the Repeal Rule. See
   Competitive Enter. Inst., 901 F.2d at 114. And our ability to review the
   lawfulness of the Repeal Rule satisfies redressability. See ibid. Therefore, the
   States have standing.
                                         III.
          Now the merits. While the States make various contentions, we need
   only consider one: that the Repeal Rule is arbitrary and capricious. We first
   (A) discuss the legal standards. Then we (B) explain why the Repeal Rule is
   arbitrary and capricious for two independent reasons.
                                          A.
          Section 706 of the APA requires courts to “hold unlawful and set aside
   agency action, findings, and conclusions found to be . . . arbitrary, capricious,
   an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.
   § 706(2). To decide whether agency action is arbitrary and capricious, we
   begin by asking whether “an agency articulated a rational connection
   between the facts found and the decision made.” ExxonMobil Pipeline Co. v.
   DOT, 867 F.3d 564, 571 (5th Cir. 2017) (quotation omitted). We then ask if
   the agency’s reasoning “fails to account for relevant factors or evinces a clear
   error of judgment.” Univ. of Tex. M.D. Anderson Cancer Cntr. v. HHS, 985
   F.3d 472, 475 (5th Cir. 2021).
          An agency may not “depart from a prior policy sub silentio or simply
   disregard rules still on the books.” FCC v. Fox Television Stations, Inc., 556
   U.S. 502, 515 (2009) (citation omitted). Rather, the agency must “display
   awareness that it is changing position.” Ibid. Of course, an agency is not

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   precluded from revising policy. See ibid. But changes require careful
   comparison of the agency’s statements at T0 and T1 to ensure that the agency
   has recognized the change, reasoned through it without factual or legal error,
   and balanced all relevant interests affected by the change. Cf. ibid.
          An agency may not advance arguments before us without first
   presenting them in the administrative record. Rather, “[t]he grounds upon
   which an administrative order must be judged are those upon which the
   record discloses its action was based.” SEC v. Chenery Corp., 318 U.S. 80, 87
   (1943). The Supreme Court has repeatedly reaffirmed this prohibition on
   “convenient litigating position[s]” and “post hoc rationalization[s].” Kisor v.
   Wilkie, 139 S. Ct. 2400, 2417 (2019) (quotation omitted); Burlington Truck
   Lines, Inc. v. United States, 371 U.S. 156, 168–69 (1962); see also Motor Vehicle
   Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 50 (1983)
   (“[C]ourts may not accept appellate counsel’s post hoc rationalizations for
   agency action.” (citation omitted)); accord Wages & White Lion Invs., LLC v.
   FDA, No. 21-60766, slip op. at 18–19 (5th Cir. Jan. 3, 2024).
          Finally, administrative actions cannot survive solely on an agency’s
   demand for policy deference. Of course, if an agency satisfies the various
   requirements of judicial review, then we will not “substitute [our] own policy
   judgment for that of the agency.” FCC v. Prometheus Radio Project, 141 S. Ct.
   1150, 1158 (2021). But due deference to agencies does not make arbitrary and
   capricious review “toothless”; rather, it has “serious bite.” Data Mktg.
   P’ship v. DOL, 45 F.4th 846, 856 (5th Cir. 2022) (quotation omitted).
                                          B.
          The Repeal Rule falls short of these standards. We (1) discuss the
   Department’s inadequate consideration of important aspects of the energy
   conservation program. Then we (2) discuss the Repeal Rule’s reliance on
   purported legal error.

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                                            1.
          The 2022 DOE was required to reasonably consider the relevant
   issues and reasonably explain its decisions in the Repeal Rule. Ibid. It failed
   to do so. Specifically, it (a) is unclear that DOE has statutory authority to
   regulate water use in dishwashers and clothes washers. But even if DOE has
   water-usage authority over the relevant appliances, the Department (b) failed
   to adequately consider the negative consequences of the Repeal Rule,
   including the substitution effects of energy-and-water-wasting rewashing,
   prewashing, and handwashing. And in all events, the 2022 DOE (c) failed to
   adequately consider the impact of the energy conservation program on
   “performance characteristics.”
                                            a.
          In promulgating the Repeal Rule, DOE stated that its energy
   conservation program must promote “water conservation” and regulate
   “water use.” See 87 Fed. Reg. at 2684–85. But it is unclear how or why DOE
   thinks it has any statutory authority to regulate “water use” in dishwashers
   and washing machines.
          The EPCA allows DOE to regulate energy use by some products and
   water use by others. Here is how the EPCA defines an “energy conservation
   standard”:
          (A) a performance standard which prescribes a minimum level
          of energy efficiency or a maximum quantity of energy use, or,
          in the case of showerheads, faucets, water closets, and urinals, water
          use, for a covered product, determined in accordance with test
          procedures prescribed under section 6293 of [Title 42]; or
          (B) a design requirement for the products specified in
          paragraphs (6), (7), (8), (10), (15), (16), (17), and (20) of section
          6292(a) of [Title 42]; and includes any other requirements

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          which the Secretary may prescribe under section 6295(r) of
          [Title 42].
   42 U.S.C. § 6291(6) (emphasis added). Thus, DOE can set the maximum
   “energy use” for most products—including dishwashers and laundry
   machines. “[O]r” it can set the maximum “water use” for four other,
   specified products—namely, showerheads, faucets, water closets, and
   urinals.
          The EPCA does not appear to contemplate overlap between the
   products subject to “energy” regulation and those subject to “water”
   regulation. Energy first. The EPCA defines “energy use” as “the quantity of
   energy directly consumed by a consumer product at point of use.” Id.
   § 6291(4). And it defines “energy” as “electricity[] or fossil fuels” or “other
   fuels.” Id. § 6291(3). Dishwashers and laundry appliances obviously use
   “energy” as the EPCA defines that term. So it makes sense that DOE can
   regulate the amount of energy used by those appliances.
          But the statute defines “water use” as “the quantity of water flowing
   through a showerhead, faucet, water closet, or urinal at point of use.” Id.
   § 6291(31)(A). And the four explicitly enumerated water products do not use
   “energy” as that term is defined in the EPCA. That explains why Congress
   said “energy use, or, . . . water use.” Id. § 6291(6) (emphasis added). The
   word “‘or’ is almost always disjunctive.” Encino Motorcars, LLC v. Navarro,
   138 S. Ct. 1134, 1141 (2018) (citation and quotation omitted). So it seems
   obvious that the statute gave DOE power to regulate energy use for energy-
   using appliances (like dishwashers and washing machines) or water use for
   non-energy-using appliances (like showerheads, faucets, water closets, and
   urinals). No part of that text indicates Congress gave DOE power to regulate

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   water use for energy-using appliances (like dishwashers and washing
   machines). 2
          The EPCA’s history supports this reading. Until 1992, DOE had zero
   power to regulate water use by any product. In that year, Congress added
   “water use” to DOE’s statutory mandate—but only as to showerheads,
   faucets, water closets, and urinals. See Energy Policy Act of 1992, Pub. L. No.
   102-486, § 123, 106 Stat. 2776, 2817–21 (adding “water use” to § 6291 and
   “showerheads,” “faucets,” “water closets,” and “urinals” to § 6292). That
   further suggests that Congress never gave DOE power to regulate water use
   by other products like dishwashers or laundry appliances.
          The EPCA’s structure further supports this reading. Section 6293
   specifies that testing procedures “shall be reasonably designed to produce
   test results which measure energy efficiency, energy use, [or] water use (in the
   case of showerheads, faucets, water closets and urinals).” 42 U.S.C. § 6293(b)(3)
   (emphasis added); see also id. § 6293(b)(4) (materially identical text). Section
   6295(o) prevents DOE’s amended standards from increasing “the maximum
   allowable energy use, or, in the case of showerheads, faucets, water closets, or
   urinals, water use.” Id. § 6295(o)(1) (emphasis added); see also 2020
   Dishwasher Rule, 85 Fed. Reg. at 68735–36 (emphasizing the textual
   distinction between energy use and water use in subsection (o)); 2020
   Laundry Rule, 85 Fed. Reg. at 81369–70 (same). And § 6295(o)(2)(A)
   reaffirms that new standards “shall be designed” to maximize

          _____________________
          2
              Nor does it appear that DOE’s water-use regulations fall within the EPCA’s
   conception of “design requirements” under 42 U.S.C. § 6291(6)(B). To the contrary, the
   statute’s immediately preceding subsection covers water use as a “performance standard,”
   while also limiting its reach to water use by “showerheads, faucets, water closets, and
   urinals.” Id. § 6291(6)(A). Nor does it appear water use can constitute any “other
   requirement[]” under § 6295(r) because that subsection concerns only energy use. See id.
   § 6295(r).

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   “improvement in energy efficiency, or, in the case of showerheads, faucets,
   water closets, or urinals, water efficiency.” Id. § 6295(o)(2)(A) (emphasis
   added). All of these provisions explicitly tie DOE’s “water use” authority to
   showerheads, faucets, water closets, and urinals. And the EPCA at no point
   suggests that DOE can regulate “water use” by products other than
   showerheads, faucets, water closets, and urinals—like dishwashers and
   clothes washers.
          The best argument for extending DOE’s authority over water use
   appears in 42 U.S.C. § 6295(g). That section sets certain statutory
   maximums for, among other products, dishwashers and laundry machines.
   And    those   statutory   maximums       include   water-use   metrics. See,
   e.g., id. § 6295(g)(9)(A) (statutorily providing clothes washers manufactured
   on or after January 1, 2011, must have “a water factor of not more than
   9.5”); id. § 6295(g)(10)(A) (statutorily providing dishwashers manufactured
   on or after January 1, 2010, must not use more than 4.5 gallons of water per
   cycle for compact units and 6.5 gallons for standard units). Given that DOE
   has power “to amend” conservation standards for clothes washers and
   dishwashers, see id. § 6295(g)(9)(B), (10)(B), might the Department infer
   that it has power to set new water-use standards that are more draconian than
   those set by Congress? It appears not. The plain text of the EPCA—including
   the provisions of § 6295(g)(9)(B) and (10)(B)—says that DOE only has
   power to amend energy-use standards for dishwashers and clothes washers.
   Congress itself set the water-use standards for those appliances in
   § 6295(g)(9) and (10). And no part of the statute appears to give DOE power
   to change them. See, e.g., City of Arlington v. FCC, 569 U.S. 290, 317 (2013)
   (Roberts, C.J., dissenting) (“Agencies are creatures of Congress; an agency

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   literally has no power to act unless and until Congress confers power upon
   it.” (quotation omitted) (alteration adopted)).
          Given all of this, it appears that DOE’s assertion of regulatory
   jurisdiction over water usage in dishwashers and clothes washers is “not in
   accordance with law” and is “in excess of statutory . . . authority.” See
   5 U.S.C. § 706(2)(A), (C). Yet we need not reach the question. That is for
   two reasons. First, petitioners do not ask us to so hold. Cf. United States v.
   Sineneng-Smith, 140 S. Ct. 1575 (2020). And second, as explained in the
   following sections, the Repeal Rule was arbitrary and capricious for reasons
   wholly independent of the statute’s water-usage limits.
                                          b.
          Even if DOE could consider dishwashers’ and clothes washers’
   “efficiency” in both “energy use” and “water use,” the 2020 Rules likely
   promoted greater efficiency in both categories than the Repeal Rule.
   Assuming both energy conservation metrics are on the table, the States
   argue, and DOE does not appear to dispute, that one important aspect of that
   problem is whether appliance regulations actually reduce energy and water
   consumption. Yet the administrative record contains ample evidence that
   DOE’s efficiency standards likely do the opposite: They make Americans use
   more energy and more water for the simple reason that purportedly “energy
   efficient” appliances do not work. See CEI Petition, 83 Fed. Reg. at 17776. So
   Americans who want clean dishes or clothes may use more energy and more
   water to preclean, reclean, or handwash their stuff before, after, or in lieu of
   using DOE-regulated appliances.
          DOE itself said so in 2020. For example, DOE explained in the 2020
   Dishwasher Rule: “Commenters supporting [the 2020 Rules] noted that the
   existing regulations were counterproductive to the goal of increasing energy
   efficiency of dishwashers as many consumers end up running their

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   dishwasher multiple times to get dishes clean.” 85 Fed. Reg. at 68732. The
   DOE appeared to agree with these commenters, saying on its own behalf that
   “[the new dishwasher product class] could save energy and water by
   preventing the handwashing of dishes or the running of a dishwasher multiple
   times for the same load.” Ibid.
          Moreover, the record contains historical evidence that dishwasher
   cycle time has increased from around one hour at the advent of DOE’s
   conservation program to around two and a half hours in 2020. See CEI
   Petition, 83 Fed. Reg. at 17773–74. DOE does not appear to contest this data;
   in fact, DOE in 2020 appeared to agree that the frustratingly slow pace of
   modern dishwashers caused consumer substitution away from dishwashers
   and toward handwashing. See 2020 Dishwasher Rule, 85 Fed. Reg. at 68729;
   see also Record App’x 3 (noting consumers supported efficacious dishwashers
   by a margin of 2,200 to 16). And nothing wastes water and energy like
   handwashing: DOE itself estimated in 2011 that handwashing consumes 350%
   more water and 140% more energy than machine washing. See Record App’x 5
   (citing U.S. Dep’t of Energy, Technical Support Document
   Docket EE-2006-STD-0127: National Impact Analysis 16
   (2011), https://perma.cc/849K-NCX8).
          The Repeal Rule’s laundry provisions present a similar substitution
   problem. In promulgating the 2020 Laundry Rule, DOE said that a new
   appliance class could prevent consumers from “completing multiple cycles
   to adequately clean or dry their clothing.” 85 Fed. Reg. at 81365. So when
   DOE proposed the Repeal Rule, commenters naturally objected on the
   ground that eliminating the better-cleaning appliances would force
   consumers to “run[] multiple cycles for the same load of laundry.” 87 Fed.
   Reg. at 2684. Other commenters noted that this problem could affect both
   dishwashers and laundry appliances. Id. at 2684–85.

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          What did DOE say in response? Basically nothing: It acknowledged
   the concern and moved on. But bare acknowledgment is no substitute for
   reasoned consideration. We have previously held that “conclusory
   statements”—like       DOE’s—do        not    constitute    adequate     agency
   consideration of an important aspect of a problem. See Corrosion Proof Fittings
   v. EPA, 947 F.2d 1201, 1227 (5th Cir. 1991); see also Getty v. Fed. Sav. & Loan
   Ins. Corp., 805 F.2d 1050, 1055 (D.C. Cir. 1986) (“Stating that a factor was
   considered, however, is not a substitute for considering it.”).
          The Repeal Rule appears to rest on DOE’s unexplained balancing of
   evidence. It’s a well-worn principle of arbitrary-and-capricious review that
   an administrative agency “must examine the relevant data and articulate a
   satisfactory explanation for its action including a rational connection between
   the facts found and the choice made.” State Farm, 463 U.S. at 43 (quotation
   omitted). Here, however, the 2022 DOE recognized the facts that
   undermined its Repeal Rule, cited other facts to suggest the Repeal Rule
   would conserve water and energy, see 87 Fed. Reg. at 2683–85, and then
   implicitly credited the latter without explaining why. That is the touchstone
   of arbitrary and capricious agency action.
                                          c.
          The EPCA balances energy efficiency with the availability of desirable
   “performance characteristics.” See 42 U.S.C. § 6295(o)(4) (“The Secretary
   may not prescribe an amended or new standard under this section if . . . the
   standard is likely to result in the unavailability . . . of performance
   characteristics (including reliability), features, sizes, capacities, and volumes
   that are substantially the same” as otherwise available); see also id.
   § 6295(o)(2)(B)(i)(IV) (instructing DOE to consider “any lessening of the
   utility or the performance” of an appliance resulting from an efficiency
   regulation). Thus, appliance performance is an “important aspect” of, or

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   “relevant factor[]” in, the EPCA’s statutory scheme. State Farm, 463 U.S.
   at 42–43; accord M.D. Anderson, 985 F.3d at 475.
          At least as of 2020, DOE agreed that cycle time was an important
   performance characteristic. After all, that is why DOE sua sponte initiated the
   Laundry Rule. See 2020 Laundry NPRM, 85 Fed. Reg. at 49298−99. And in
   the 2020 Laundry Rule, DOE “re-affirmed the Department’s recognition of
   cycle time as a valuable consumer utility and performance-related feature.”
   85 Fed. Reg. at 81361; see also 2020 Dishwasher Rule, 85 Fed. Reg. at
   68726−28 (reiterating DOE’s longstanding view that performance is
   “utility” “accessible to the layperson and based on user operation”); 2020
   Laundry NPRM, 85 Fed. Reg. at 49297−300 (DOE discussing why cycle time
   is a facet of performance); 2020 Laundry Rule, 85 Fed. Reg. at 81362−67
   (same); Grant of Petition for Rulemaking, 84 Fed. Reg. 33869, 33872 (July
   16, 2019) (same). The Repeal Rule did not recant this position; in fact, it
   expressly declined to do so. See 87 Fed. Reg. at 2682 (“not contending” with
   fact that cycle time is an important performance characteristic under EPCA).
          The Repeal Rule “fails to account” for this “relevant factor[].” M.D.
   Anderson, 985 F.3d at 475. Rather, the 2022 DOE’s approach to cycle time is
   nonsensical. After conceding that cycle time is a relevant performance
   characteristic, the Repeal Rule then asserts that cycle time is nonetheless
   “irrelevant” because the Department chose to rely exclusively on the
   purported illegality of the 2020 Rules. 87 Fed. Reg. at 2682. Then the 2022
   DOE said “it nonetheless bears mentioning that” DOE only tests some of the
   settings on dishwashers and laundry machines. Ibid. Therefore, DOE
   concluded, manufacturers are free to deploy other, non-tested settings that use
   as much energy and water as necessary to actually clean consumers’ things:
          Most basic models of residential dishwashers, residential
          clothes washers, and consumer clothes dryers provide multiple
          cycle options that are not regulated, each of which are designed

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          for different purposes. For instance, a residential dishwasher
          may have a quick cycle, heavy cycle, delicates, etc. in addition
          to the normal cycle. These unregulated cycles provide consumers
          options to [sic] their individual needs in the moment.
   Ibid. (emphases added). The 2022 DOE’s point appears to be that its rules
   are not worth the paper they are printed on because manufacturers can—
   indeed, DOE appears to invite them to—evade the standards altogether.
          This proves too much and too little. As to the too much, if it were
   really true that manufacturers could do whatever they want in “unregulated
   cycles” for dishwashers and laundry machines, then DOE would plainly
   stand outside the bounds of the EPCA. There is no doubt that DOE must
   take into account some conservation standards in regulating America’s
   appliances. See, e.g., 42 U.S.C. § 6291(6)(A) (DOE must promote
   “efficiency” in “energy use”). The Department could not invite—as the
   text of the Repeal Rule suggests—manufacturers to deploy “unregulated
   cycles” that consume 1,000 gallons of water and 1,000 kW of energy to wash
   a load of dishes. See id. § 6295(g)(10) (“[A] standard size dishwasher [shall]
   not exceed 355 kWh/year and 6.5 gallons per cycle”). That is especially true
   when the 2022 DOE’s entire basis for the Repeal Rule was to enforce the
   EPCA’s conservation standards. It would be the height of capriciousness to
   enforce those standards by inviting manufacturers to ignore them.
          As to the too little, the 2022 DOE rests primarily if not exclusively on
   the “quick” cycle included on some appliances currently on the market.
   Repeal Rule, 87 Fed. Reg. at 2682. As the 2020 DOE explained at length in
   the 2020 Laundry Rule, however, quick cycles are not “the normal use
   cycle.” 85 Fed. Reg. at 81362. Rather, these cycles generally apply only to
   “lightly soiled” loads, id. at 81365, and so do not adequately assist with
   “consumers’ normal washing and drying needs,” id. at 81366. The point of
   the 2020 Rules was to “spur manufacturer innovation and push for the

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   development of short-cycle products, as the normal cycle,” i.e., in the normal
   use case. Ibid. (emphasis added). The 2020 Dishwasher Rule made similar
   observations. See 85 Fed. Reg. at 68727. The 2020 DOE explained at length
   why faster appliances in the normal use case provide value to consumers. See
   id. at 68730 (Dishwasher Rule discussing at length the inadequate utility of
   existing quick cycle options); id. at 68731 (“DOE reiterates that the ‘Quick’
   cycles available on current dishwasher models do not provide the same utility
   as the Department’s new one hour or less short cycle product class.”). The
   Repeal Rule does not explain why “quick” buttons would provide an
   efficacious substitute.
          In sum, DOE (1) recognized that cycle time is important; (2) said cycle
   time was “irrelevant”; (3) said none of this matters because manufacturers
   and consumers can evade the EPCA by relying on “unregulated” appliance
   settings; and (4) pointed to existing “quick” cycles that do not address the
   foundational concerns underlying the 2020 Rules. To explain the 2022
   DOE’s reasoning is to explain that it failed to “examine the relevant data and
   articulate a satisfactory explanation” for its impact on appliance
   performance, a quality Congress deemed important in § 6295(o). See State
   Farm, 463 U.S. at 43.
                                         2.
          Instead of focusing on appliance performance, the Repeal Rule instead
   rested on the 2022 DOE’s belief that the 2020 Rules “violated the EPCA.”
   87 Fed. Reg. at 2684. We first (a) explain that controlling Supreme Court
   precedent makes that insufficient to justify the Repeal Rule. Then we
   (b) consider DOE’s failure to consider alternatives to the Repeal Rule.

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                                         a.
          The Repeal Rule contended the 2020 Rules were “invalid.” Ibid. But
   in rescinding a prior action, an agency cannot simply brand it illegal and move
   on.
          Consider, for example, the Supreme Court’s decision in Regents. In
   that case, the Secretary of Homeland Security in the Obama Administration
   promulgated two programs to award government benefits to undocumented
   aliens. See DHS v. Regents, 140 S. Ct. 1891, 1901–02 (2020) (describing
   Deferred Action for Childhood Arrivals (“DACA”) and Deferred Action for
   Parents of Americans and Lawful Permanent Residents (“DAPA”)). DHS
   created both programs via memorandum and without any of the APA’s
   procedural safeguards. See ibid. That legal problem doomed DAPA. See Texas
   v. United States, 809 F.3d 134 (5th Cir. 2015), aff’d by equally divided Court,
   579 U.S. 547 (2016) (per curiam). And it led to an injunction against DACA.
   See Regents, 140 S. Ct. at 1902 (citing injunction). So shortly after President
   Trump’s inauguration, his Secretary of Homeland Security issued a new
   memorandum rescinding the first memorandum. Her reason for the
   rescission? The programs were “unlawful.” Id. at 1910.
          The Supreme Court held that the recission was arbitrary and
   capricious even if DACA and DAPA were unlawful. Why? Because “deciding
   how best to address a finding of illegality moving forward can involve
   important policy choices.” Ibid. For example, the Court noted, DACA
   involved two different components—one that granted government benefits
   to the children of undocumented aliens, and another that granted
   government forbearance from enforcing the immigration laws against those
   individuals. Id. at 1911. Perhaps the Trump Administration was correct that
   the benefits were illegal—but that did not justify its decision to rescind the
   programs in toto. Id. at 1911–12. Rather, the Court held that even when an

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   agency determines that its previous decision was illegal, it still must go on to
   consider alternatives to simply revoking the prior action. Id. at 1912 (citing
   State Farm, 463 U.S. at 51).
           So too here. Even if the 2020 Rules were illegal, the Department did
   not consider alternatives to repealing them in toto. 3 For example, some of the
   purported problems with the 2020 Rules could be fixed by promulgating
   energy conservations standards—a remedy the 2022 DOE never considered.
   See infra Part III.B.2.b. And even if the 2020 Rules were broken beyond
   repair, the 2022 DOE conceded that appliance performance is a relevant
   performance characteristic—and yet explored no alternatives to promote it.
                                              b.
           The Repeal Rule was required to “consider the ‘alternatives’ that are
   ‘within the ambit of existing policy.’” Regents, 140 S. Ct. at 1913 (alteration
   adopted) (quoting State Farm, 463 U.S. at 51). A policy’s failure to fulfill this
   requirement renders that policy arbitrary and capricious, even if this defect
   is sole and “alone.” Id. at 1913.
           Here, several alternatives fell “within the ambit” of the 2020 Rules,
   but DOE ignored all of them. For example, the 2022 DOE claimed the 2020
   Rules were invalid because they failed to include energy conservation
   standards under § 6295(q). Repeal Rule, 87 Fed. Reg. at 2684. Even assuming
   this objection was well-taken, one solution would have been to publish the
   missing conservation standards.

           _____________________
           3
             Regents applies here even though DOE rescinded the rules via a new rulemaking,
   rather than a memorandum, because DOE still failed to consider alternatives. Simply
   engaging in a more formalized process does not absolve the agency of its duty to consider
   alternatives.

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          The 2022 DOE likewise claimed the 2020 DOE violated the EPCA’s
   anti-backsliding provision in § 6295(o)(1). The anti-backsliding provision
   generally prohibits DOE from issuing new energy- and water-conservation
   standards that are more lenient than legacy standards. 42 U.S.C.
   § 6295(o)(1). Even assuming this objection was well-taken (and that DOE
   could regulate water use), DOE could have required the new short-cycle
   appliances to meet the same energy- and water-conservation standards that
   older, legacy appliances must meet. At least in that latter scenario, DOE
   would have had flexibility to adjust the go-forward standards for the short-
   cycle and legacy classes in a fashion that furthers the performance interests
   discussed by the EPCA in § 6295(o)(4) and § 6295(o)(2)(B)(i)(IV).
          Instead, the 2022 DOE simply threw up its hands and used § 6295(q)
   and (o)(1) as excuses to eliminate short-cycle appliances altogether. See
   Repeal Rule, 87 Fed. Reg. at 2678–82. The Repeal Rule expressly confesses
   that it did not weigh the risks and benefits of eliminating short-cycle
   appliance classes. That makes this case indistinguishable from Regents. See
   140 S. Ct. at 1913.
          It is no answer to claim, as the Repeal Rule does, that the 2022 DOE
   lacked data and “time and resources” to develop new conservation standards
   for the 2020 Rules. See 87 Fed. Reg. at 2683. That is for two reasons. First,
   the Government tried this same move in Regents and failed. In that case, the
   Government emphasized that repealing DAPA and DACA would create
   serious “costs and burdens.” Regents, 140 S. Ct. at 1903. But the Supreme
   Court held that “costs and burdens” do not excuse the Government from
   considering the full panoply of alternatives to its chosen action in repealing
   DACA and DAPA. See id. at 1914–15.
          Second, DOE’s time-and-resource concerns in 2021 are contradicted
   by the Department’s own statements mere weeks earlier. In December 2020,

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   DOE insisted that it had both the intent and the requisite means to develop
   new conservation standards. See 2020 Laundry Rule, 85 Fed. Reg. at 81361
   (discussing DOE’s plans for conservation standards for new product
   classes); id. at 81366 (similar); id. at 81369 (similar); id. at 81372−73 (similar).
   Yet in January of 2021, DOE started the process to repeal the 2020 Rules and
   to abandon the new conservation standards it planned in December 2020. It
   did so without any acknowledgment—let alone explanation—of the evidence
   in the administrative record that “utterly refute[d]” its newfound time-and-
   resource concerns. Michigan v. EPA, 576 U.S. 743, 760 (2015) (citation and
   quotation omitted). If DOE wanted to change its estimates for the time-and-
   resource burdens, it needed to offer evidence in the record to support its volte
   face. See State Farm, 463 U.S. at 40. We cannot affirm agency action on the
   basis of “conclusory” statements. Texas v. Biden, 10 F.4th 538, 555 (5th Cir.
   2021); see also United Techs. Co. v. DOD, 601 F.3d 557, 562 (D.C. Cir. 2010)
   (quotation omitted).
          The Repeal Rule cannot stand solely on the 2022 DOE’s view that the
   2020 Rules were “invalid.”
                                    *        *         *
          In sum, it is unclear that DOE has any statutory authority to regulate
   water use in dishwashers and clothes washers. But even assuming the
   Department has that authority, the Repeal Rule is arbitrary and capricious for
   two principal reasons. (1) It failed to adequately consider appliance
   performance, substitution effects, and the ample record evidence that DOE’s
   conservation standards are causing Americans to use more energy and water
   rather than less. (2) It rested instead on DOE’s view that the 2020 Rules were
   legally “invalid”—but even if true, that does not excuse DOE from
   considering other remedies short of repealing the 2020 Rules in toto.

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                                           IV.
            Finally, a word on DOE’s litigating position in our court. It is well
   settled that “[a]n agency must defend its actions based on the reasons it gave
   when it acted.” Regents, 140 S. Ct. at 1909. And the agency may not rely on
   “impermissible post hoc rationalizations” for its actions. Ibid.; see also, e.g.,
   Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 213 (1988); Chenery, 318 U.S.
   at 94.
            As we have already described at length, see supra Part III.B.2, the
   Repeal Rule justified the 2022 DOE’s action on the 2020 DOE’s purported
   violation of the EPCA’s substantive provisions. In our court, however, DOE
   pretends it repealed the 2020 Rules because it committed merely procedural
   errors by failing “to adequately consider the [EPCA’s] requirements.” Red
   Br. 2; see also id. at 6, 22, 29, 38 (same).
            It borders on frivolous to say the 2020 Rules failed to consider
   § 6295(o)(1) and (q). The 2020 Rules considered these sections extensively.
   See, e.g., 2020 Laundry Rule, 85 Fed. Reg. at 81361−68 (discussing
   § 6295(q)); id. at 81368−70 (discussing § 6295(o)(1)); 2020 Dishwasher
   Rule, 85 Fed. Reg. at 68726−34 (engaging with § 6295(q)); id. at 68734–37
   (analyzing § 6295(o)(1)).
            But more to the point, that is not what the Repeal Rule itself said. The
   Repeal Rule itself said the EPCA’s provisions in § 6295(o)(1) and (q)
   substantively precluded the 2020 Rules. The Repeal Rule must stand or fall
   on that position—and not DOE’s new invocation of procedural error in its
   briefs before our court. And even if those rules did contravene the EPCA, the
   Repeal Rule would still be invalid because the 2022 DOE did not consider
   alternatives to simply repealing the old rules. See supra Part III.B.2.
            And in any event, even if we took seriously DOE’s litigation position,
   it would only further doom the Repeal Rule. If the 2020 Rules really were

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   procedurally invalid because they failed to adequately consider the EPCA,
   then one obvious solution to that problem would be to supply the missing
   consideration. See supra Part III.B.2.b (holding DOE must consider
   alternatives). Instead, the Department amplified its capriciousness by
   throwing the baby out with the bath water.
                                 *        *         *
          For the foregoing reasons, the petition for review is GRANTED.
   And the matter is REMANDED to DOE for further proceedings consistent
   with this opinion.

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