Court Opinion

ID: 4170069
Source: CourtListenerOpinion
Date Created: 2017-05-19 15:04:19.077409+00
Date Added: 2024-06-11T14:38:55.317283
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 22, 2017                   Decided May 19, 2017

                        No. 16-5279

                        LIMNIA, INC.,
                         APPELLANT

                             v.

 UNITED STATES DEPARTMENT OF ENERGY AND RICK PERRY,
     IN HIS OFFICIAL CAPACITY AS SECRETARY OF U.S.
                 DEPARTMENT OF ENERGY,
                       APPELLEES

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:13-cv-00037)

     John J. Vecchione argued the cause for appellant. With
him on the briefs were Joshua N. Schopf and R. James Valvo,
III.

    Joshua Waldman, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief was
Michael S. Raab, Attorney.

   Before: GARLAND, Chief Judge, and GRIFFITH and
KAVANAUGH, Circuit Judges.
                              2
    Opinion for the Court filed by Circuit Judge KAVANAUGH.

     KAVANAUGH, Circuit Judge: The U.S. Department of
Energy provides loans and other financial support to companies
that produce clean-energy vehicles and related technologies.
The Department does so under various statutory programs,
including the Loan Guarantee Program and the Advanced
Technology Vehicles Manufacturing loan program. To receive
a loan or loan guarantee from the Department, companies must
submit applications to the programs. The Department then
evaluates the applications for compliance with statutory
requirements and technical merit.

     Limnia is a company that specializes in the production of
battery systems for electric cars. In 2009, Limnia submitted
two loan applications to the Department. The Department
rejected Limnia’s applications.

     Limnia sued the Department in the District Court. As
relevant here, Limnia alleged that the Department’s rejection
of Limnia’s applications was unlawful under the
Administrative Procedure Act. Before the District Court could
decide Limnia’s case on the merits, however, the Department
asked for the case to be remanded back to the agency. The
District Court granted the Department’s voluntary remand
request, returning Limnia’s case to the agency and closing
Limnia’s judicial action. We must determine whether it was
proper for the District Court to do so.

     Limnia argues that the District Court was wrong to grant
the Department’s voluntary remand request. That is so,
according to Limnia, because the Department did not intend to
revisit the challenged agency decisions on review. Rather, the
Department sought the remand on the basis that Limnia could
submit brand new applications for agency review. Limnia
                                3
contends that, with the case in that posture, the District Court’s
decision to grant the voluntary remand request functioned as a
dismissal of Limnia’s APA claims.

     We agree with Limnia. A district court has broad
discretion to decide whether and when to grant an agency’s
request for a voluntary remand. But a voluntary remand is
typically appropriate only when the agency intends to revisit
the challenged agency decision on review. That prerequisite
was not met in this case. We therefore reverse the order of the
District Court and remand the case to the District Court for
further proceedings consistent with this opinion.

                                I

    The U.S. Department of Energy oversees various loan
programs designed to spur the development and production of
clean-energy technologies. This case involves two such
programs: the Loan Guarantee Program and the Advanced
Technology Vehicles Manufacturing loan program. See 42
U.S.C. § 16511 et seq.; id. § 17013. Under those programs,
companies involved in the development of eligible clean-
energy technologies may apply to the Department for direct
financial support in the form of loans or loan guarantees.

     Petitioner Limnia, Inc., develops battery systems for use
in electric cars. In early 2009, Limnia applied for a loan
guarantee under the Loan Guarantee Program. Around the
same time, Limnia submitted an application seeking a $15
million loan under the Advanced Technology Vehicles
Manufacturing loan program.

     Following some back and forth with Limnia, the
Department denied Limnia’s applications. The Department
rejected Limnia’s Loan Guarantee Program application due to
                               4
Limnia’s failure to pay the required application fee. As for
Limnia’s application to the Advanced Technology Vehicles
Manufacturing loan program, the Department denied the
application on the basis that Limnia’s battery system did not
satisfy the program’s statutory requirements.

     Limnia disagrees with the Department on both fronts. It
claims that the Department was wrong to deny the Loan
Guarantee Program application for non-payment of the
application fee. Limnia alleges that the fee had been waived
by then-Secretary of Energy Steven Chu. Limnia also contends
that its battery system clearly met the statutory requirements
for the Advanced Technology Vehicles Manufacturing loan
program. Limnia asserts that the Department’s explanations to
the contrary were mere pretext contrived by the Department to
mask a review and decision-making process infected by
political bias and favoritism. Limnia sued in the District Court
to challenge what it viewed as the Department’s wrongful
denial of the 2009 applications.

     As relevant here, Limnia’s complaint alleged that the
Department’s 2009 decisions to deny Limnia’s applications
violated the Administrative Procedure Act. Limnia asserted
that the denials were arbitrary and capricious because they
were based not on merit or other technical specifications, but
on political favoritism and cronyism. Limnia also alleged that
the Department administered the Loan Guarantee Program in
an inconsistent and ad hoc manner. As an example, Limnia
cited the Department’s alleged promise to waive Limnia’s
application fee and subsequent denial of Limnia’s application
for failure to pay that same fee.

    The District Court denied the Department’s motion to
dismiss Limnia’s APA claims. The procedural history that
                               5
comes next is critical to our resolution of Limnia’s appeal. We
therefore recount it in detail.

     Following the denial of its motion to dismiss, the
Department filed a motion for a voluntary remand.
Specifically, the Department requested that the District Court
remand the proceedings to the Department to allow Limnia “to
submit new applications that could be updated to account for
any new and relevant information in support of those
applications.” Department Voluntary Remand Memorandum
at 1, J.A. 188. Although the Department strongly disputed
“that it wrongly evaluated the original applications,” the
Department argued that a voluntary remand was nonetheless
appropriate. Id. at 2, J.A. 189. It noted that a voluntary remand
would “afford Limnia the opportunity to reapply” to the loan
programs – albeit after paying the required application fee for
the Loan Guarantee Program application – “and update its loan
applications with any new information about its project.” Id.
It also argued that a remand was “in the interest of preserving
judicial resources.” Id. According to the Department, the most
that Limnia could receive following a successful suit would be
a remand to the Department for reconsideration of Limnia’s
applications. The Department asserted that it was offering
Limnia that “precise result” by agreeing to review Limnia’s
updated applications on remand. Id.

    Limnia objected to the Department’s motion for a
voluntary remand. Limnia argued that a voluntary remand
would be improper because the Department had “never
admitted error” with respect to Limnia’s original applications.
Limnia Opposition to Voluntary Remand Motion at 3, J.A. 205.
Limnia noted that the Department had not “conceded that
Limnia’s application was denied due to political favoritism, nor
described how or why a remand will guarantee a fair process.”
Id. For those reasons, Limnia argued that granting a voluntary
                               6
remand would “short-circuit” Limnia’s remedies under the
APA. Id. at 1, J.A. 203. In particular, Limnia argued that
remanding the case would deprive Limnia of its statutory right
to have the agency’s action held “unlawful and set aside.” Id.
at 6, J.A. 208 (quoting 5 U.S.C. § 706). Limnia also claimed
that remanding the case would prevent the District Court from
identifying the Department’s procedural deficiencies and
ensuring that all further Department determinations would be
made by “a disinterested decision-maker.” Id.

     In January 2016, over Limnia’s objection, the District
Court granted the Department’s voluntary remand motion. See
XP Vehicles, Inc. v. U.S. Department of Energy, 156 F. Supp.
3d 185 (D.D.C. 2016). In so doing, however, the District Court
did not clarify what the parties were required to do on remand.
The Department had claimed that Limnia was required to
submit new applications and pay any associated application
fees. Limnia had claimed that the Department was required to
reconsider Limnia’s original applications and could not make
Limnia pay any application fees. The District Court’s order did
not make clear which of the two approaches it was adopting.
Compare id. at 188 (Department has offered to allow Limnia
to “reapply to DOE’s loan programs”); id. at 192 (Limnia has
failed to explain how it would be prejudiced by “DOE’s offer”
to conduct unbiased review on remand); id. at 193 (referencing
“agency’s representations about its intended conduct on
remand”), with id. at 190 (Department is offering “to review
the applications again in an unbiased fashion”) (emphasis
added); id. at 191 (noting the Department’s pledge “to
‘reconsider’ Limnia’s applications”); id. at 193 (A “good-faith
and unbiased reconsideration of Limnia’s application is
possible” on remand.). In light of its remand order, the District
Court stayed Limnia’s APA action. It retained jurisdiction over
the case so that it could supervise the progress of the agency
proceedings.
                               7

     On remand, Limnia and the Department attempted to work
out their disagreements on a number of contested issues.
Limnia requested that the Department provide it with
information about the proposed review. Limnia also asked the
Department to “confirm that the agency will continue to honor
its waiver of Limnia’s application fee” for the Loan Guarantee
Program application, as well as “all other associated fees.” J.A.
283. Although the Department offered to “answer any
logistical questions Limnia may have about the application
process,” the Department refused to accede to Limnia’s more
“specific demands.” Id. at 279. Ultimately, the parties were
unable to agree about how the Department’s review of
Limnia’s applications should proceed on remand.

     The Department and Limnia reported their disagreement
to the District Court. At a June 2016 hearing on the subject,
Limnia protested that the Department was not offering to
“reconsider its original decisions,” but instead requiring
Limnia to “submit brand new applications with new
information.” See Tr. of 6/3/16 Hearing at 6, J.A. 290. Limnia
also expressed its position that the Department should be
required to waive the Loan Guarantee Program application fee.
See id. at 5, J.A. 289. The Department stuck by its view that
Limnia would need to submit new applications for review.
With respect to the Loan Guarantee Program application, the
Department stated its position that Limnia “must pay” the then-
current application fee. Id. at 25, J.A. 309.

     During the June hearing, the District Court questioned the
Department on the fee issue. It noted that the issue of fees had
not been “brought to the Court’s attention in a way that made
it clear to anybody” that payment of fees “was part of my
remand order.” Id.; see also id. at 12, J.A. 296 (“I don’t recall
any particular discussion of whether when Limnia refiled their
                                 8
application it would be with the fee or not the fee . . . .”); id. at
18, J.A. 302 (“nobody apparently focused on the government’s
indication in its motion for a voluntary remand” that it
“intended to have” Limnia “pay a fee”). The District Court
instructed Limnia and the Department to meet and confer about
the fee issue and submit a joint proposal as to how to proceed
with the remand process.

     Limnia and the Department again failed to reach an
agreement. They reported their impasse to the District Court.
Limnia argued that remand was not appropriate in light of the
Department’s insistence that Limnia submit new applications
and pay the Loan Guarantee Program application fee. Limnia
requested that the District Court lift the stay on the judicial
proceedings and allow Limnia to move forward with litigation
of its APA claims. The Department opposed Limnia’s request.
It noted that Department officials remained ready and willing
to “conduct a good-faith review” of any new application
submitted by Limnia. J.A. 328.

     In July 2016, the District Court sided with the Department
and issued an order denying Limnia’s request to lift the stay on
the judicial proceedings. See Order Denying Reconsideration
of Voluntary Remand Order, J.A. 329 (“July 2016 Order”). In
its order, the District Court did not address the continuing
dispute over the Loan Guarantee Program application fee or
take issue with the Department’s refusal to reconsider Limnia’s
original applications. It instead maintained that remand was
warranted because Limnia had failed to establish that “it is now
in any different position with respect to having to file a new,
complete application than it would have been if its APA claims
were fully and successfully litigated.” Id. at 3, J.A. 331. Put
differently, the District Court’s order accepted the
Department’s conditions on the remand – namely, that Limnia
would need to file new applications and pay the required Loan
                                9
Guarantee Program application fee. In light of Limnia’s
continued refusal to submit new applications, the District Court
stated that “there is nothing left for this Court to do.” Id. at 4,
J.A. 332. It therefore relinquished jurisdiction to the agency
and closed the case. It deemed its decision a “final, appealable
order.” Id.

     Limnia next filed a timely appeal from the District Court’s
July 2016 order. Limnia argues that the District Court abused
its discretion by remanding the case to the Department despite
the Department’s refusal to reconsider Limnia’s original 2009
applications or waive the Loan Guarantee Program application
fee. The Department counters that this Court lacks jurisdiction
to hear Limnia’s appeal. In the alternative, the Department
contends that the District Court properly granted the
Department’s voluntary remand request. We now turn to those
issues.

                                II

     Before addressing the merits of Limnia’s appeal, we must
consider the Department’s argument that we lack appellate
jurisdiction. See Steel Co. v. Citizens for a Better Environment,
523 U.S. 83, 94-95 (1998). The Department’s central
contention is that the District Court’s July 2016 order denying
Limnia’s request to lift the stay on the judicial proceedings
merely confirmed its January 2016 order granting the
Department’s motion for a voluntary remand. Orders granting
voluntary remands, according to the Department, are not
typically final for purposes of appellate review.

    We disagree that we lack jurisdiction to review the July
2016 order. Viewed in context of the proceedings in the
District Court and before the agency, the District Court’s July
2016 order is a final, appealable order subject to our review.
                                10

      By statute, this Court has jurisdiction to consider “all final
decisions of the district courts of the United States.” 28 U.S.C
§ 1291. The requirement of finality “is to be given a practical
rather than a technical construction.” Eisen v. Carlisle &
Jacquelin, 417 U.S. 156, 171 (1974) (internal quotation marks
omitted). Rulings “that terminate an action” fall within the
“core” of Section 1291’s requirement of finality. Dhiab v.
Obama, 787 F.3d 563, 565 (D.C. Cir. 2015) (quoting Gelboim
v. Bank of America Corp., 135 S. Ct. 897, 902, slip op. at 2
(2015)); see also LeFande v. District of Columbia, 841 F.3d
485, 492 (D.C. Cir. 2016) (order final under 28 U.S.C. § 1291
when it “completely ends the litigation on the merits”).
Conversely, if an order does not terminate an action, but instead
“leaves the core dispute unresolved” for “further proceedings,”
it is not final for purposes of Section 1291. American Hawaii
Cruises v. Skinner, 893 F.2d 1400, 1403 (D.C. Cir. 1990).

     To determine whether we have appellate jurisdiction over
the District Court’s July 2016 order, we consider the practical
effect of the order at the time it was entered. In doing so, it is
helpful to compare the July 2016 order with the District Court’s
January 2016 order.

     In the January order, the District Court granted the
Department’s request for a voluntary remand while retaining
jurisdiction over the case. See XP Vehicles, Inc. v. U.S.
Department of Energy, 156 F. Supp. 3d 185, 193 (D.D.C.
2016). As previously discussed, however, the District Court’s
January 2016 order did not specify whether the remand
required the Department to reconsider its decisions denying
Limnia’s original 2009 loan applications, or instead required
Limnia to submit new applications. Nor did it address whether
Limnia would need to pay the Loan Guarantee Program
                               11
application fee – an omission the District Court acknowledged
at a subsequent hearing.

    The above facts show that it was unclear whether the
January 2016 remand order required the Department to
reconsider the original 2009 applications or instead required
Limnia to submit new applications complete with the required
application fees. As such, the January 2016 order left the “core
dispute unresolved” and was not a final order for purposes of
28 U.S.C. § 1291. American Hawaii Cruises, 893 F.2d at 1403.

     By contrast, the July 2016 order left no doubt that the
District Court accepted the Department’s conditions on the
proposed remand proceedings. In both the hearing and status
report preceding the order, Limnia and the Department made
their positions clear: Limnia argued that remand was
inappropriate given the Department’s refusal to reconsider the
2009 loan applications and insistence that Limnia pay the Loan
Guarantee Program application fee.             The Department
maintained that remand was appropriate, even though it was
not offering to reconsider the denial of Limnia’s 2009 loan
applications or waive the Loan Guarantee Program application
fee. The District Court, fully aware of the parties’ dueling
positions, issued its July 2016 order siding with the Department
and confirming its decision to remand the case. See July 2016
Order at 3, J.A. 331.

     The District Court’s July 2016 order did not return the
“core dispute” – the Department’s allegedly improper denial of
Limnia’s 2009 loan applications – back for further proceedings
by the agency. American Hawaii Cruises, 893 F.2d at 1403.
Instead, the order effectively terminated Limnia’s APA action
based on the 2009 applications. See Dhiab, 787 F.3d at 565.
The District Court thought so too: It characterized its July 2016
decision as a “final, appealable order,” relinquished
                              12
jurisdiction to the agency, and closed the case. July 2016 Order
at 4, J.A. 332; see also id. at 1, 3, J.A. 329, 331. “Although
that characterization cannot bind us, it does indicate that the
district court thought the order had terminated the action.”
Ciralsky v. CIA, 355 F.3d 661, 667 (D.C. Cir. 2004); see also
St. Marks Place Housing Co. v. U.S. Department of Housing &
Urban Development, 610 F.3d 75, 80 (D.C. Cir. 2010).

     Without appellate review by this Court, there would be no
avenue – administrative or judicial – by which Limnia could
obtain review of the Department’s allegedly improper
decisions denying the 2009 loan applications. In such a
situation, denying review of the District Court’s July 2016
order on the ground that it is “a ‘remand’ would strain common
sense.” New Mexico ex rel. Richardson v. Bureau of Land
Management, 565 F.3d 683, 699 (10th Cir. 2009); cf. Daviess
County Hospital v. Bowen, 811 F.2d 338, 342 (7th Cir. 1987)
(order remanding case to agency was final for purposes of 28
U.S.C. § 1291 when applicable judicial review statute would
bar any additional appeals from administrative proceedings).

     We therefore conclude that the District Court’s July 2016
order was final and appealable. Our jurisdiction over that final
order extends to the District Court’s interlocutory decisions,
including the January 2016 order. See LeFande, 841 F.3d at
492; Ciralsky, 355 F.3d at 668. Therefore, we may review the
voluntary remand analysis that the District Court conducted in
both the January 2016 order and the July 2016 order.

                              III

    We now turn to whether the District Court properly
granted the Department’s voluntary remand request.
                                 13
     In general, a voluntary remand request made in response
to a party’s APA challenge may be granted only when the
agency intends to take further action with respect to the
original agency decision on review. Otherwise, a remand may
instead function, as it did in this case, as a dismissal of a party’s
claims.

     The leading voluntary remand cases confirm that agency
reconsideration of the action under review is part and parcel of
a voluntary remand. See, e.g., Ethyl Corp. v. Browner, 989
F.2d 522, 523 (D.C. Cir. 1993) (voluntary remand appropriate
when agency acknowledged that new evidence had
undermined agency decision and asked that the court “remand
the matter to the Agency for further consideration”) (emphasis
added); American Hawaii Cruises v. Skinner, 893 F.2d 1400,
1401 (D.C. Cir. 1990) (voluntary remand of Coast Guard
decision granted to allow “reconsideration of that agency’s
ruling”) (emphasis added); see also SKF USA Inc. v. United
States, 254 F.3d 1022, 1029 (Fed. Cir. 2001) (agency may
request voluntary remand “in order to reconsider its previous
position”) (emphasis added).

     Other legal sources support the conclusion that a voluntary
remand entails further agency action on the agency decision
under review. See, e.g., Remand, BLACK’S LAW DICTIONARY
1484 (10th ed. 2014) (“The act or an instance of sending
something (such as a case, claim, or person) back for further
action.”); 3 CHARLES H. KOCH, JR., ADMINISTRATIVE LAW AND
PRACTICE § 8:31, at 187 (3d ed. 2010) (voluntary remand
appropriate when “agency recognizes deficiencies in its
decision, explanation or procedures” and asks “court to remand
the case back to the agency so that it may correct the
deficiency”); Toni M. Fine, Agency Requests for “Voluntary”
Remand: A Proposal for the Development of Judicial
Standards, 28 Ariz. St. L.J. 1079, 1080 (1996) (“In general, a
                               14
motion for voluntary remand is a request by the agency-
respondent, lodged in the reviewing court, that the court
remand to the agency a pending appeal of some final agency
action to enable the agency to conduct additional proceedings
in the underlying case . . . .”) (footnotes omitted); Joshua
Revesz, Voluntary Remands: A Critical Reassessment, at 5
(May 4, 2017) (available on SSRN) (Voluntary remands “arise
after petitioners seek judicial review of federal agency action,
and are requests by those agencies to the reviewing court that
the court send the challenged action back to the agency for
further consideration.”).

     That is not to say that an agency need confess error or
impropriety in order to obtain a voluntary remand. But the
agency ordinarily does at least need to profess intention to
reconsider, re-review, or modify the original agency decision
that is the subject of the legal challenge.

     This case illustrates why that principle can be important in
practice. As discussed, Limnia brought suit under the APA to
challenge what it viewed as the Department’s improper denial
of Limnia’s 2009 applications. Limnia alleged that it was
“directly harmed and aggrieved” by the Department’s actions.
Limnia Amended Complaint at 32, J.A. 43. Limnia therefore
sought judicial review in order to vindicate its “statutory right
to have its loan application decided” in accordance with the
law. Limnia Opposition to Official Capacity Defendants’
Motion to Dismiss at 13, XP Vehicles, Inc. v. U.S. Department
of Energy, 156 F. Supp. 3d 185 (D.D.C. 2016) (No. 1:13-cv-
00037). Such judicial vindication, Limnia claims, will help
mitigate the reputational damage Limnia suffered when the
Department denied its applications due in part to technical
deficiencies – deficiencies Limnia claims were pretext for the
Department’s unlawful political favoritism.
                                15
     In response to those allegations, the Department requested
a voluntary remand. But it did not do so in order to reconsider
Limnia’s 2009 applications. Instead, it offered to review any
new applications Limnia chose to submit, assuming that
Limnia remitted the then-required application fees. That was
so even though a central allegation of Limnia’s complaint was
that the Department had waived the application fee associated
with the Loan Guarantee Program.

     With the case in that posture, the District Court’s decision
to grant the Department’s request and close the judicial action
left Limnia stuck between a remand and a hard place: Without
any means – judicial or administrative – to obtain review of the
Department’s 2009 application decisions, Limnia had no
opportunity to vindicate its statutory rights under the APA or
repair its reputational damage. As a result, the District Court’s
voluntary remand order was a “remand” in name only.
Limnia’s position was the same as if its case had been
dismissed on the merits.

     Therefore, although the factual background of this appeal
is complicated, answering the central legal question is
straightforward. The District Court erred by granting the
Department’s voluntary remand request when the Department
did not intend to revisit the original application decisions under
review. We therefore reverse the order of the District Court
and remand the case to the District Court for further
proceedings. 1

    1
      The parties agree that the appropriate standard of review is
abuse of discretion. Even assuming that the standard of review is
abuse of discretion rather than de novo, a question we need not
decide, we agree with Limnia that the District Court’s decision must
be reversed.
                               16
                               IV

     We are remanding to the District Court so that it may
resolve Limnia’s APA challenge to the apparently denied 2009
loan applications. That said, at oral argument in our Court, the
Department seemed to suggest a newfound willingness to
actually reconsider those 2009 loan applications, not merely
consider any new loan applications from Limnia. If that is true,
then the District Court may remand the case to the agency, as
long as one condition is met. The District Court must first
resolve whether Limnia has to pay the application fee
associated with the 2009 Loan Guarantee Program application,
or whether that fee was waived by the Department.

    If it turns out that the Department misspoke at oral
argument – and that it is not willing to reconsider the 2009 loan
applications – then the District Court must plow forward and
resolve Limnia’s APA challenge.

                             ***

     Based on the record before us, we conclude that the
District Court erred by granting the Department’s request for a
voluntary remand. We therefore reverse the order of the
District Court and remand the case to the District Court for
further proceedings consistent with this opinion.

                                                    So ordered.