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Case number 18-10-8, Valerio Gannoni Corporation, Petitioner for Supervisory Protection Agency.

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Miss Klein for the petitioner, Mr. Carlisle for the respondent.

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Good afternoon.

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We're in the home stretch.

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May it please the court?

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This case focuses on a particular provision of the renewable fuel standard program.

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Section 75-45011 imposes on EPA a duty to conduct periodic reviews of three particular issues

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and to use those reviews to inform adjustments to program requirements.

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In the underlying rule, EPA deprived regulated parties and the public of these statutory protections.

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The rule in question does two things.

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First, EPA reads out of the statute one-third of the mandated review

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and otherwise limits the nature and scope of the periodic review duty.

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Second, EPA purports to implement the statute by announcing for the first time that it has satisfied the periodic review duty.

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And to support this assertion, EPA points to actions taken years ago for different purposes

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But these actions plainly do not comply with the duty that Congress imposed in Section O11.

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I would like to address why the rule is final and reviewable, why it required notice and comment, and why it's contrary to law, arbitrary, and capricious.

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We asked the court to enforce the statute by vacating EPA's determination that it has complied with Section O11.

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and remanding with instructions to complete a review in accordance with the statutory provision.

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So you're only asking for, let me be clear, part two or part one as well?

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Your Honor, O11 has three prongs.

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No, I'm talking about the program description that you're saying is a rule that has to be subjected to notice and comment.

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So there are two parts.

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More is EPA saying, here's our interpretation, and Part 2 says, and here's our conclusion that we've complied.

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We believe that both of those are final and reviewable, and both of those require notice and comment.

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So you want the whole thing vacated.

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Yes.

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And I think that conclusion with respect to finality and the requirement of notice and comment is really dictated by two of this Court's opinions.

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the 2012 opinion in the Sierra Club case, 699 F3rd, 530, and the 2011 decision in NRDC, 643 F3rd, 311.

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Like the EPA actions in those cases, this one treads new ground.

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It's the first time that EPA has addressed the periodic review provision in any fashion.

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It marks the consummation of a process.

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EPA reached conclusions about what this provision requires and made a determination that its prior actions satisfied this section.

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So can we talk about the other prong of it?

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So let's not just for purposes of asking the question.

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Let's not talk about the prong that deals with consummation.

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Let's talk about the prong that deals with legal consequences.

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So what the agency says in the document itself in footnote one, unlike our annual standards or certain other RFS regulatory actions that do establish legal requirements, neither our interpretation of the statute nor the description of our studies in this document require any party or the agency to do or not to do anything beyond what the statute requires.

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So you have to either think that that statement is wrong or that that statement is right and it doesn't matter.

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I think it's both wrong and irrelevant because what this provision does, unlike the provision in most of the cases on which EPA relies, this provision doesn't impose a duty on regulated parties.

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This provision imposes a duty on EPA.

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And what EPA has done

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in this underlying rule is say, we have satisfied that provision, thus closing off claims that the duty has not been satisfied or claims for unreasonable delay.

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And this underlying rule changes the law.

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Why do you say that it closes off claims that the duty hasn't been satisfied?

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Because this is our only opportunity today in this court

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is our only opportunity to have judicial review of the determination that all these things that happened in the past satisfies this independent obligation in Section 011.

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But I thought that one could bring a challenge to those things that one now knows were periodic reviews.

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Let's suppose you could.

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There may be a reason why you can't.

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But let's suppose you could.

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If you could, then what you would say is, now we know that those things that we didn't realize were periodic reviews are actually periodic reviews.

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And now we also know the agency's interpretation as to why it was satisfying the statute.

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We want to bring a claim within 60 days of coming to learn that those were periodic reviews.

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And we challenge the agency's interpretation.

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Let me tell you what's really going on, Your Honor.

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In those actions, the annual rulemakings, EPA defined the scope of those rulemakings very narrowly.

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In fact, in the last rulemaking that took place to set obligations for 2018, there was a list of a dozen things on which EPA received comments

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in which it took the position were beyond the scope of the rule.

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So what it's trying to do is unlawfully shoehorn, in the language of Sierra Club, a broad duty into the scope of rulemakings that took place years ago in which it treated all these things that would have been within the scope of a periodic review as beyond the scope

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of the annual ruling.

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But that sounds like a merits argument.

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That sounds like you're saying that they're now trying to treat themselves as if they satisfy the statute, and they didn't.

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And what we're really talking about now is whether you have the opportunity to make that argument somewhere.

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And why don't you have the opportunity to make that argument if you just challenge it on that ground?

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And you say, they're now saying those were periodic reviews.

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I now realize that.

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And I'm telling you that they're saying that, but they're wrong in the way they treated it.

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We disagree with their interpretation.

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for a couple of reasons.

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First, it doesn't make sense.

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I mean, and one thing they say they can do is change willy-dilly what satisfies the periodic review.

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So it's constantly a moving target, and it's constantly secret.

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We don't know when.

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Just respond as I understand.

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Why can't we do that?

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You know, EPA has said rule five is our compliance with the periodic review.

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Right.

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So you come into court.

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if you're timely, and say that's wrong?

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A, if you have standing, and B, it's an arbitrary and capricious argument?

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I think that's really both impractical and nonsensical for us to have to go back and challenge 15 different things that happened in the past rather than challenging the consummation

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of the process which took place in this rule in which EPA for the first time said that those things are now satisfying the periodic review duty.

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It seems like it turns judicial efficiency and administrative efficiency on its head.

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Okay, but you're not ruling out even though it would be costly, inefficient, courts would hate it.

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that you could do it.

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I'm glad to know that the court views things that way.

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I would be curious if EPA would agree.

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All right.

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Now I understand that one of your arguments is I understand that your client has to comply with these volumes.

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And because Congress substantially raised the levels in 2007, your client would like to have EPA

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look at how this is affecting it and presumably have some adjustment made.

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Now I don't see EPA pointing to a statutory provision that would entitle you to a waiver.

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I also understand that this may be beyond the case that were EPA to try to issue a fine

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because your client has failed to meet certain levels, then you could defend.

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My question is, what's the upfront legal vehicle?

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And I thought that's where at least some of Judge Srinivasan's question was going.

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And is it a citizen suit?

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Is it an APA suit?

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So you know what EPA is going to say.

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based on its brief in response to both of those arguments.

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So you have to persuade us that we shouldn't be persuaded by their arguments, its arguments.

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So I'd like to take a step back and give you a little more background so that you understand the way the program works, the legal consequences, and what this precludes us from doing.

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May I do that?

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Is any of this in the record?

[00:11:20] Speaker 00:
Yes, it is.

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It's clear.

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It's on the face of the statute.

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The statute itself sets up an annual rulemaking in section 03, right?

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Section 011 is a completely separate section, a completely separate duty.

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So every year, EPA conducts an annual rulemaking, sets volumes for the next year.

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Those are snapshots in time, and they've been defined by EPA to be narrow in scope.

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And your comments can challenge those?

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Yes, but what we are saying is that Section 011 is a different kind of review.

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It's not a snapshot in time.

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It is broader in scope and it is aimed at looking at the feasibility of the requirements and the impacts

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on individual entities that are subject.

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Let me say one more thing just to contrast what's happening annually and what we say should happen periodically.

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In the annual rulemaking and in this brief, EPA says we don't have any obligation to do anything other than a class-wide impact review.

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We say that Section 011 entitles

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Bolero and others who are regulated parties to a review in conjunction with the statutory language.

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And when do you get to do that?

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We say that there is a mandatory duty, and that issue was before the district court and is on appeal in the Fifth Circuit.

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And that issue is not before this court.

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What I'm trying to narrow on is, are you

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barred from any remedy, which is basically what the agency is arguing.

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Or do you have opportunities?

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And I have some other questions, EPA, but I just want to understand.

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So you can comment on the annual rulemaking.

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Yes.

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But of course, EPA says we don't do individual reviews.

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That's a class mission.

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And they say other things.

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For example.

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I understand they say other things.

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You can't do an APA challenge, because this is not final.

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EPA said, it's not the consummation of our interpretation included.

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What else do you have?

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A citizen suit?

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We brought a citizen suit and the response there, well, EPA's response there was that there's not a specific deadline in the statute and so the district court

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And the district court agreed, and that issue is on appeal, but it's abated.

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The district court said no subject matter jurisdiction.

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Discussionary call as to timing.

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Correct.

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And two days later, EPA, for the first time in the history of the program, announced this underlying rule.

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Can I ask this question?

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So suppose that in the annual document,

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EPA submits the annual document and then adds a section to it that says, by the way, this annual document satisfies our obligation to do a periodic review.

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And annually, obviously, is periodic.

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So it at least is periodic.

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And it could say, this is one of our periodic reviews.

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And here's how we're satisfying the periodic review requirement by doing that.

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And it seems to me, at that point, you could seek review and say,

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arbitrary and capricious as to the periodic review part because the explanation they've given is nonsensical.

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And you can make all the arguments you're just now making, which is that what they're saying about dissatisfying the periodic review obligation just doesn't work.

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You look at these things, you can't satisfy the periodic review by doing the annual part.

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They're a mismatch.

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You have to do something different.

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You could make that argument, and that would be heard, and it would be determined whether it was arbitrary and capricious.

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And it seems like what EPA is saying is

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That's what you should do.

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And it's true that they never said that in an annual document, but they've now said it, and that gave you a new chance to seek review of those documents on the basis that you now know they were periodic reviews.

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I think what they've done is different and more.

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What they've done in the underlying rule is say, we don't have to conduct any review in accordance with the third prong, O11C.

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For the first time, they have said

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that provision is a nullity.

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And this is the opportunity for this court to correct that error, which is absolutely clear from this court's decision in U.S.

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Palmer, U.S.

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versus Palmer last year that EPA cannot

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treat that provision as a nullity.

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And this is the only opportunity we have to challenge that.

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There is absolutely no precedent for having a situation like this one, where there is clearly a Scrivener's error.

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You have a cross-reference that cross-references to a provision that doesn't exist.

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But let me be clear.

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I thought Judge Sreenivasan's question was a friendly question.

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And maybe I misunderstood it.

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But if this court were to say,

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that EPA has now announced its position.

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And its position is exactly as you describe it.

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Why can't you challenge it during this annual rulemaking?

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Because it is totally disconnected from the annual rulemaking.

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I understand your argument.

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There is not a vehicle I can imagine where we can

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For example, next year, they're not going to say that, clearly having heard the earlier question.

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Next year, they put out a proposed rule, and they say, here are the levels.

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And your client comes in and says, well, the DC Court of Appeals has held that EPA's statement is its position.

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And your only remedy is either in this annual review or

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EPA has to be told that its interpretation of the third prong and its interpretation of who is an individual and each entity as barring your client's individualized review is incorrect.

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I don't think it's as friendly as you think it is.

[00:17:53] Speaker 00:
Well, tell me why.

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I just want to be clear.

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Because in the annual rulemaking,

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The statute does not bind EPA to treat the annual rulemaking as a periodic review.

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In fact, in the past, it has clearly treated the annual review as something quite different.

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And so there's nothing- So you're just thrown out of court again.

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Certainly EPA would argue that.

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And the reason I know that is because when we have tried to comment on issues, and I can give you a very specific example, we make comments in the last rulemaking about the effect of the treatment of renewable fuel that is ultimately exported.

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And we said this affects the feasibility of these requirements.

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And EPA filed a brief last week in this court

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in case number 17-1258, defending its position that that issue was beyond the scope of the annual rulemaking.

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We cannot raise in that case the idea that they should have conducted a periodic review because there's nothing that requires the annual review and the periodic review to happen at the same time.

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I'd like to move on to the legal issues that are before the court with respect to the substance of the decision.

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And that is that the substance of the rule is contrary to law in several ways.

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First is the scrivener's error.

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Everybody agrees that there is no plausible reading of the text absent correcting this erroneous cross-reference.

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What's unusual about the case is that both sides agree, as EPA says it is obviously reasonable, to read O11C as cross-referencing the volume requirements in O2B.

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EPA agrees that this is consistent with the text, the structure, the purposes of the statute, and the legislative history.

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That's at Joint Appendix 8.

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What they try to rely on are cases where the court had to choose between the literal meaning and something else, where the court could give effect to the literal meaning.

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Even then, as in the Appalachian Power case where the Scrivener's error distorts the true meaning, the court corrected it.

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Here, the drafting history and the structure show without a doubt that Congress intended to cross-reference the volume requirements.

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They did so in all of the versions of the bills

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in both the House and the Senate prior to recodification, they all cross-referenced back to the volume requirements, which were then in a provision numbered A2.

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In the recodification process, A2 became 2B.

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They changed one reference in the introductory text, but neglected to change the other in paragraph O11C.

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The second way that EPA's

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underlying rule is contrary to law is this idea that we've talked about that the review was met by repurposing these earlier actions.

[00:21:45] Speaker 00:
I'm not going to go back into that because I think we've covered it, but I do think it's important to emphasize the language of the statute in the part of the provision that EPA treated as a nullity requires EPA to review the impacts on each

[00:22:03] Speaker 00:
entity described, and that is not satisfied by this class-wide review that they purport to have done in the past.

[00:22:15] Speaker 00:
And the reason that they're so insistent on nullifying the third prong of the periodic review provision is that they concede that they have never conducted this kind of

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individualized review, even though they are well suited to do so because all of the entities that are described are regulated parties.

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They are subject to reporting requirements.

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They are participating in an electronic reporting system.

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And so EPA is uniquely suited to collect data from those entities by which it can study

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what has been documented as disparate impacts on various entities that are differently situated.

[00:23:12] Speaker 00:
I am out of time.

[00:23:14] Speaker 00:
I will answer any further questions or agree for battle.

[00:23:34] Speaker 03:
May it please the court, my name is Ben Carlisle from the Department of Justice on behalf of EPA.

[00:23:40] Speaker 03:
At counsel's table is Rylan Lee from EPA's Office of General Counsel.

[00:23:44] Speaker 03:
The periodic review document is not subject to judicial review because it is not final agency action.

[00:23:50] Speaker 03:
However,

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Even if the court finds that it has jurisdiction to review the periodic review document, it should deny the petitions because the periodic review document is an interpretive rule, correctly considers the statute, and EPA's view of its compliance is not arbitrary and capricious.

[00:24:07] Speaker 03:
First, the periodic review document is not final agency action because it has no legal consequences.

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Rather, the periodic review document is simply a commentary explaining EPA's view of the law under Section 011 and why EPA believes it has fulfilled its obligations.

[00:24:24] Speaker 01:
So if I'm representing Valero, what do I do?

[00:24:32] Speaker 03:
Your Honor, Valero has it, I assume you mean in order to secure judicial review?

[00:24:37] Speaker 03:
I would make two points to that.

[00:24:39] Speaker 01:
I suppose there are two points.

[00:24:41] Speaker 01:
What do I do?

[00:24:41] Speaker 01:
The volumes have been raised.

[00:24:44] Speaker 01:
I want to get them lowered.

[00:24:47] Speaker 03:
If the volumes have been raised and Valero wants to get them lowered, it can challenge EPA's annual rule and argue that the rule is arbitrary and capricious.

[00:24:55] Speaker 01:
No, but EPA is going to respond.

[00:24:58] Speaker 01:
We've looked at the class of which Valero is a part.

[00:25:03] Speaker 01:
It loses.

[00:25:07] Speaker 03:
Valero has the opportunity to comment on essentially any aspect of the EPA's proposed rule for the annual rulemakings adjusting the volumes.

[00:25:20] Speaker 03:
I think it's worth clarifying something here that I don't think it is EPA's position.

[00:25:25] Speaker 03:
In fact, I'm fairly confident that it is EPA's position that those annual rules would not be the appropriate vehicle to review whether or not it has engaged in its periodic reviews.

[00:25:36] Speaker 01:
Even after your statement?

[00:25:38] Speaker 03:
I'm sorry?

[00:25:39] Speaker 01:
Even after your statement?

[00:25:41] Speaker 03:
That's right, Your Honor.

[00:25:42] Speaker 01:
Because EPA has taken the position, there is no right to an individual review.

[00:25:49] Speaker 03:
That's EPA's position on the law.

[00:25:51] Speaker 03:
And I think the important thing to realize about the periodic review document is that whatever claims Valero had for review before EPA issued this document, it still has.

[00:26:02] Speaker 03:
Whether Valero can, in the abstract, secure judicial review of EPA's interpretation is not the relevant question here.

[00:26:09] Speaker 01:
So going back to our Appalachian Power case, where we talked about agencies' efforts to avoid judicial review by putting in language like footnote one, that sort of boilerplate.

[00:26:24] Speaker 01:
But the agency's taken a position.

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This particular regulated party claims that EPA's

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interpretation is incorrect and that it's causing prejudice to Valero.

[00:26:42] Speaker 01:
And it can either do what counsel described as trying to bring a very expensive lawsuit, challenging 15 interpretations of rulemaking, or it can come into court and say we are entitled under the plain text of the statute according to its interpretation.

[00:27:01] Speaker 01:
to these individual assessments because the waiver provisions don't give us any relief under the plain text of the waiver provisions.

[00:27:13] Speaker 01:
And the annual review, given EPA's position that this is going to be done on a class-wide basis doesn't give us any individualized review either.

[00:27:25] Speaker 01:
So why isn't the document sufficiently final for that purpose?

[00:27:30] Speaker 03:
Because, Your Honor, the document did not change any of Valera's existing claims.

[00:27:35] Speaker 01:
No, but it claimed, it said, there are no individualized reviews.

[00:27:41] Speaker 03:
But EPA could have taken that position internally.

[00:27:44] Speaker 03:
EPA was not required to issue this document at all.

[00:27:47] Speaker 01:
Definitely not.

[00:27:48] Speaker 01:
And so what it did, the way I'm reading it, it looked at all of our cases and it purposely put that footnote in there.

[00:27:55] Speaker 01:
It purposely didn't publish it in the Federal Register.

[00:27:58] Speaker 01:
It purposely didn't say,

[00:27:59] Speaker 01:
that this is binding on the field.

[00:28:03] Speaker 01:
So it checked off all the boxes.

[00:28:05] Speaker 01:
And so this is just something floating in the air.

[00:28:07] Speaker 01:
And the question is, well, what is a regulated party supposed to do where there's not an implausible argument that Congress used some language that talks about each entity?

[00:28:25] Speaker 01:
suggesting that Congress anticipated that while EPA could very well reasonably determine that it's going to do the annual reviews on a class-wide basis, there might be individual situations where there was an undue impact, and EPA, if it looked at it on an entity that comes to it, might agree.

[00:28:48] Speaker 03:
Your Honor, I think your question actually illustrates EPA's point in some way, which is that Valero is in no worse boat than it was before EPA issued this document.

[00:28:58] Speaker 03:
Now, in terms of what Valero could do, it has brought a mandatory duty claim, which is currently on appeal and has not been disposed of.

[00:29:06] Speaker 03:
Some party may have an unreasonable delay claim, possibly including Valero, claiming that EPA hasn't complied with this duty.

[00:29:14] Speaker 03:
EPA doesn't believe that.

[00:29:16] Speaker 03:
reviewing either this document itself or the annual rules because those are not themselves, those are unitary decisions that are not themselves reporting to be the entirety of EPA's periodic reviews.

[00:29:32] Speaker 03:
EPA cited several of those in a number of different documents.

[00:29:37] Speaker 03:
We don't think that either of those would be an appropriate vehicle, but

[00:29:41] Speaker 03:
Valero is in exactly the same boat that it was before EPA issued this document, by virtue of EPA being very careful to issue a document that is purely explanatory.

[00:29:52] Speaker 02:
So if I thought that it were important that somebody have an opportunity to get review of EPA's logic in saying that it's satisfying O11,

[00:30:09] Speaker 02:
Yeah, 2101, the periodic review requirement.

[00:30:13] Speaker 02:
What vehicle would somebody use?

[00:30:15] Speaker 03:
Your Honor, I think it is conceivable that there may not be a vehicle for that.

[00:30:21] Speaker 03:
We would take a look at any unreasonable delay claim that was litigated, or excuse me, that was presented to us.

[00:30:27] Speaker 03:
I don't know that we would concede jurisdiction on that.

[00:30:30] Speaker 03:
That is the claim that strikes me as most plausible out of the claims that I can think of that Valero or some other parties.

[00:30:37] Speaker 02:
So EPA has issued an instrument now that has a section that says fulfillment of the obligation to conduct periodic review.

[00:30:45] Speaker 02:
And then it documents how it's fulfilled that requirement.

[00:30:48] Speaker 02:
And if somebody wanted to say, no, you haven't, you haven't fulfilled that requirement.

[00:30:51] Speaker 02:
And we're talking about stuff that you've already done, not about what you might do in a future annual review, but stuff that you've already done.

[00:30:56] Speaker 02:
Someone says, no, I looked at those things.

[00:30:58] Speaker 02:
I don't think you fulfilled your requirement at all, because now that I understand your interpretation, it's nonsensical.

[00:31:04] Speaker 02:
Your position is there's no way to get review of that.

[00:31:09] Speaker 03:
There may be some way to do so.

[00:31:10] Speaker 03:
I think, as I said, the unreasonable delay claim is the vehicle that I can think of at this moment.

[00:31:16] Speaker 01:
Well, we can think of a reason why that might fail.

[00:31:20] Speaker 03:
What else is there?

[00:31:25] Speaker 03:
I mean, I think that would be the avenue to attempt to do so.

[00:31:29] Speaker 02:
You can't go with the documents that you say now satisfy the periodic review requirement, and your argument for that is,

[00:31:37] Speaker 02:
that it's spread out over multiple ones of them, so how do you know which one to challenge?

[00:31:41] Speaker 03:
That's a component of the argument, Your Honor, but the purpose, those documents are annual rules, for example, setting the volume requirements issued for that specific purpose.

[00:31:52] Speaker 03:
And as a component of that, EPA has been conducting some of these reviews.

[00:31:59] Speaker 03:
But EPA didn't have to do it that way.

[00:32:01] Speaker 03:
It could have conducted the reviews otherwise.

[00:32:05] Speaker 03:
And so it's not necessarily the case that all of the documents that EPA would cite as part of its reviews are themselves final agency action.

[00:32:15] Speaker 03:
The core that I keep coming back to here though is that the narrow issue before the court in terms of finality is did this document change Valero's ability to secure review.

[00:32:28] Speaker 02:
And it may be- Right, and I know that one answer to the proposition that did it change its ability to get review is no it didn't because it never had any ability to get review and this doesn't create any ability that didn't otherwise exist.

[00:32:38] Speaker 02:
I get that, which is just to say it's always been zero and this document is also a zero and therefore we say it's zero.

[00:32:45] Speaker 02:
Which that makes sense to me, but what this document did is something else.

[00:32:49] Speaker 02:
It also said we've already satisfied the periodic review requirement.

[00:32:54] Speaker 03:
Respectfully, Your Honor, it said so in the context of

[00:32:57] Speaker 03:
expressly disclaiming any intended legal effect, EPA articulated an interpretation of the statute and then set forth its view of why it has complied with that statute.

[00:33:08] Speaker 01:
But we rejected that in Appalachian power.

[00:33:11] Speaker 01:
That's the boilerplate where the agency says we're not bound by this.

[00:33:16] Speaker 03:
Respectfully, Your Honor, I believe the law is that the court is not necessarily bound by EPA statements to that effect, but that is a factor that the court will consider.

[00:33:26] Speaker 01:
No, I'm saying in Appalachian Power, we characterized the statement as boilerplate, so it was not

[00:33:35] Speaker 01:
of any legal significance as far as this court was concerned.

[00:33:40] Speaker 03:
Yes, Your Honor.

[00:33:41] Speaker 03:
But in this case, we are in fact here arguing that this document does not cut off any legal claims that Valero may have.

[00:33:48] Speaker 01:
Well, what you just acknowledged is maybe Valero has no remedy.

[00:33:52] Speaker 01:
It can go to Congress and get the statute changed.

[00:33:54] Speaker 01:
Presumably, you would say that's available to them.

[00:33:57] Speaker 01:
But it's saying we have a piece of paper, but we have a document here

[00:34:05] Speaker 01:
that says what EPA's position is in interpreting a section of a law that Congress has passed, where Congress used terms that Bolero says entitled it to something.

[00:34:21] Speaker 01:
Now, EPA may have discretion as to timing, but Bolero's argument is it can't just forever bar this, and in its statement,

[00:34:34] Speaker 01:
It's saying it is forever barred.

[00:34:36] Speaker 03:
Respectfully no, Your Honor.

[00:34:37] Speaker 01:
Well, unless we change our minds.

[00:34:40] Speaker 03:
No, Your Honor, because the whole, I think, the key piece of EPA's position is that it never had to issue this document in the first place.

[00:34:54] Speaker 03:
This is Valero attempting to create a right of judicial review out of this document.

[00:34:59] Speaker 01:
In all due respect,

[00:35:01] Speaker 01:
DPA of its own volition decided to issue this document.

[00:35:07] Speaker 03:
That's correct, because DPA, I think, as a matter of... And I think our position is that the document does not create a new right of judicial review.

[00:35:16] Speaker 02:
Did DPA have to issue the document that was at issue in Sierra Club?

[00:35:20] Speaker 03:
I don't believe it did, but in that case, it affirmatively chose to say that is the document in which the challenge is available to, and it successfully dismissed a district court claim.

[00:35:32] Speaker 02:
You could have made the same argument.

[00:35:34] Speaker 02:
It never had to issue the document, and therefore because it never had to issue the document, there's nothing to review.

[00:35:38] Speaker 03:
Yes, Your Honor, but in that case again, EPA relied on that document as if it cut off claims, whereas in this case, EPA has taken the position that it has no legal effect.

[00:35:49] Speaker 01:
So EPA had a duty to... When are we going to learn EPA's position?

[00:35:55] Speaker 01:
It's given us an interpretation.

[00:35:57] Speaker 01:
So Valero wants to challenge it.

[00:36:03] Speaker 03:
Your Honor, again, Valero may have an unreasonable delay claim, but...

[00:36:08] Speaker 02:
I think we would say that this... It's just, it's odd to find it in terms of unreasonable delay, if I'm understanding correctly, for the following reason.

[00:36:14] Speaker 02:
Unreasonable delay means you've never issued the periodic review that you needed to review, that you needed to issue.

[00:36:20] Speaker 02:
Yes, sir.

[00:36:21] Speaker 02:
And that's... And then if you look at your document, it says, notwithstanding that we have not until today explicitly labeled these as periodic reviews, they nevertheless satisfy the requirements of Section 211-011.

[00:36:31] Speaker 02:
Right.

[00:36:32] Speaker 02:
And then it seems weird to say,

[00:36:34] Speaker 02:
All right, I've got a document that says we've satisfied the requirements of 211-011, and your answer is the way you get review of that is to say you never issued a periodic review, because it's flying in the face of a statement that says that we did.

[00:36:47] Speaker 03:
Right, but Your Honor, EPA could say the same thing in its, for example, its briefs in this case or its briefs in an unreasonable delay case, and that would not have legal effect.

[00:36:56] Speaker 03:
We would certainly, I expect, I can't speak for certain for future counsel, but I expect we would contest any unreasonable delay claim, at least in part on the theory that EPA has fulfilled its duty.

[00:37:10] Speaker 03:
And I think we would likely point to the same actions that are at issue in this document in doing so.

[00:37:15] Speaker 02:
If that's true, so on one hand you're saying bring it in as an unreasonable delay, and then on the other hand you're saying when you bring it in as an unreasonable delay, we're saying it's not an unreasonable delay because we already did it.

[00:37:23] Speaker 02:
And then if somebody says,

[00:37:25] Speaker 02:
Okay, I just, my head's snapping.

[00:37:28] Speaker 02:
All I want to do is I want to figure out how can I challenge the thing that you said you already did.

[00:37:33] Speaker 02:
Because I see a statute that says when you do a periodic review, you've got to look at a handful of things.

[00:37:39] Speaker 02:
I look at the things that you're looking at, those are the wrong things.

[00:37:41] Speaker 02:
I think you're supposed to be looking at different things.

[00:37:43] Speaker 02:
And then how do I get that claim aired?

[00:37:47] Speaker 02:
How do I get that claim aired?

[00:37:49] Speaker 02:
judicial review of that claim.

[00:37:51] Speaker 03:
Your Honor, it is, I think, conceivable as you acknowledge that their right to review may not have existed in the first place.

[00:37:56] Speaker 03:
And the question for the court here isn't in the abstract, does Valero have a right to judicial review.

[00:38:05] Speaker 03:
There's no exception to the finality requirement

[00:38:08] Speaker 03:
based on the unavailability of review, the question is, what did this document do?

[00:38:14] Speaker 01:
I know, but suppose the agency tonight issues a document that says, we've decided that all of Title IV will not be enforced anymore.

[00:38:26] Speaker 01:
Does anybody who claims that they are harmed by that have any opportunity to challenge that statement?

[00:38:39] Speaker 03:
Your Honor, I think that's a complicated question because it gets to EPA's enforcement discretion.

[00:38:44] Speaker 03:
And my understanding of the law is that broad proclamations of a decision not to enforce that abdicate EPA's duty are themselves potentially irreviewable.

[00:38:55] Speaker 01:
Well, I think the document was written, if I could speculate here, in light of our court's precedent.

[00:39:00] Speaker 01:
So it didn't do certain things.

[00:39:02] Speaker 01:
It checked off these boxes.

[00:39:04] Speaker 01:
And yet, in Appalachian Power, we said,

[00:39:08] Speaker 01:
We can look at this in some instances and say the agency is simply trying to avoid judicial review.

[00:39:15] Speaker 01:
And the question in my mind is, is this one of those circumstances?

[00:39:19] Speaker 01:
So you would agree with me, wouldn't you, that were EPA to propose fines on Valero from failing to meet the volumes, Valero could defend, could it not?

[00:39:33] Speaker 01:
on this statutory argument, whether it would win or not is a different question, but I mean, it could make these arbitrary and capricious arguments.

[00:39:40] Speaker 01:
Could it?

[00:39:42] Speaker 03:
I'm not sure about that exact hypothetical.

[00:39:45] Speaker 03:
I know.

[00:39:45] Speaker 01:
Well, but I think- Because EPA might say, look, you say the fine of a million dollars is too high.

[00:39:52] Speaker 01:
We think it's appropriate and give 10 reasons why it's appropriate.

[00:39:58] Speaker 03:
Right.

[00:39:59] Speaker 03:
I think Valero could advance whatever arguments it wanted if, you know, or that were properly before a court to contest that fine.

[00:40:09] Speaker 03:
I do want to return to, I think, the premise of your question about EPA ticking the boxes.

[00:40:15] Speaker 03:
I think that

[00:40:17] Speaker 03:
The key, again, is that if EPA ticks those boxes in a way that there are no legal consequences because its intention is just to explain its position, then the document is non-final.

[00:40:30] Speaker 02:
I know I'm missing something very basic here, so let me ask the question this way.

[00:40:34] Speaker 02:
Suppose EPA issues a document that has the following.

[00:40:37] Speaker 02:
It says, we are now conducting a periodic review consistent with 211-011.

[00:40:42] Speaker 02:
Here's the factors we're considering.

[00:40:45] Speaker 02:
It looks at the statute and it says, here's how we read the statute.

[00:40:48] Speaker 02:
Here's the factors we're considering.

[00:40:50] Speaker 02:
This is supposed to be a review that's conducted in conjunction with the appropriate adjustment of the requirements described in subparagraph B. And it does whatever it needs to with respect to actually adjusting those requirements.

[00:41:06] Speaker 02:
And then it says, there.

[00:41:07] Speaker 02:
Now you've seen this is our periodic review.

[00:41:09] Speaker 02:
And then somebody brings an action to get review of that and says, wait a minute.

[00:41:14] Speaker 02:
I see that you've done your periodic review.

[00:41:16] Speaker 02:
It's connected to the appropriate adjustment of the requirements.

[00:41:21] Speaker 02:
I don't understand what you're doing with the periodic review because your analysis of the statute just doesn't comply with my understanding of the statute.

[00:41:27] Speaker 02:
If they did that, would that, that's something that could be reviewed because that

[00:41:33] Speaker 03:
Your Honor, I think if EPA did that and said, this document is our periodic review and as in Sierra Club, the legal consequence of this is we say definitively we have fulfilled our duty and now is your opportunity in this document to challenge it and we're cutting off all of your other claims,

[00:41:54] Speaker 02:
then I think that would be... I don't understand the cutting off all of your other claims.

[00:41:57] Speaker 02:
Why do you have to say that?

[00:41:58] Speaker 03:
Because that is the legal consequence that Valero is essentially alleging here.

[00:42:02] Speaker 02:
That what they're saying is different in the world is that... There's never been a prerequisite to judicial review that there's no other form of judicial review.

[00:42:09] Speaker 02:
It's just that if it's a final agency action, you get judicial review.

[00:42:13] Speaker 03:
That's right, Your Honor, but the... the argument that they are making that the legal regime has changed

[00:42:23] Speaker 03:
is in part, and I think in primary, that EPA has changed where they can get judicial review.

[00:42:31] Speaker 03:
That that's the change in the legal regime that they are identifying.

[00:42:35] Speaker 03:
And that's what EPA disputes.

[00:42:37] Speaker 02:
It's saying- OK, I'm not 100% sure I understand that, but let me ask this follow-up question.

[00:42:42] Speaker 02:
It's my mistake not yours.

[00:42:43] Speaker 02:
Let's posit that.

[00:42:45] Speaker 02:
So if that's true, that in that situation, there would be judicial review,

[00:42:49] Speaker 02:
then what's the difference between that and the current situation?

[00:42:51] Speaker 02:
Because in the current situation, what's happened is EPA has said not that this document is the periodic review, but it said, I've done some stuff before, and now I'm telling you that's the periodic review.

[00:43:01] Speaker 03:
Your Honor, I think that's the difference between this case and Sierra Club, is in Sierra Club, EPA affirmatively took the position that the document had the legal consequence of cutting off claims and used that as the opportunity to dismiss claims in district court.

[00:43:16] Speaker 03:
So the difference here is essentially in the purpose for which EPA issued the document here explanatory in Sierra Club with the idea of actually establishing and that it would fulfill the 2D and

[00:43:37] Speaker 03:
saying this is the place to go and challenge whether we have fulfilled these duties.

[00:43:42] Speaker 03:
In Sierra Club, UPI could have done something more analogous to what it did here and said, whatever avenues you have to challenge whether we have fulfilled this 90% standard that was an issue in that case, take those opportunities, but it took a different course than it did here.

[00:44:05] Speaker 01:
Let me ask one other question in terms of your understanding of the statutory scheme.

[00:44:11] Speaker 01:
Is your EPA's position that Valero should come to EPA and file some type of document that says we want periodic review as an individual entity?

[00:44:35] Speaker 01:
And then EPA says, nope, there is no such remedy.

[00:44:41] Speaker 01:
And at that point, Valero gets judicial review.

[00:44:48] Speaker 01:
Is there any procedure that you're aware of?

[00:44:53] Speaker 03:
Your Honor, I suppose, and I hadn't given this a great deal of thought, that EPA could potentially file a petition for rulemaking requesting that EPA adopt some specific regulation or procedure to do this.

[00:45:06] Speaker 01:
I haven't, and I assume that if EPA... Well, what I was thinking of is that in other contexts, a regulated party is able to come to the agency and ask for a waiver, and that's an individual party

[00:45:20] Speaker 01:
individual facts, et cetera.

[00:45:23] Speaker 01:
And EPA makes an individual decision to grant or deny the waiver.

[00:45:28] Speaker 01:
And then, presumably, the regulated party, if it was denied the waiver, could seek review to the administrator.

[00:45:39] Speaker 01:
And if the administrator affirmed, then could come to court.

[00:45:43] Speaker 01:
I'm just trying to think of, is this sort of an administrative exhaustion

[00:45:47] Speaker 01:
issue in terms of getting into court.

[00:45:49] Speaker 01:
That's not the way this has been argued.

[00:45:51] Speaker 01:
I realize that.

[00:45:52] Speaker 01:
But I'm just trying to understand when you say there's no remedy, notwithstanding an interpretation of the statute.

[00:46:01] Speaker 03:
Your Honor, I'm not aware of a procedure.

[00:46:03] Speaker 03:
I don't think of this as an administrative exhaustion issue in that respect.

[00:46:07] Speaker 03:
I'm well over my time, but I would be happy to address any questions that the court has on any other aspect of our briefing.

[00:46:14] Speaker 01:
All right.

[00:46:14] Speaker 01:
Thank you.

[00:46:19] Speaker 01:
Ms.

[00:46:20] Speaker 00:
Coney, you want to take two minutes?

[00:46:22] Speaker 00:
Yes, please.

[00:46:24] Speaker 00:
Judge Srinivasan, the process you described is exactly what EPA should have done.

[00:46:29] Speaker 00:
It should have issued a notice and given an opportunity to comment both on the interpretation of the statute and the implementation of the statute.

[00:46:38] Speaker 00:
And by taking the action that it did,

[00:46:40] Speaker 00:
It deprived us of any opportunity for notice and comment on those issues.

[00:46:46] Speaker 00:
In the Sierra Club case, that determination alone, the repurposing, the unlawful shoehorning, that alone was sufficient to establish finality and the need for notice and comment.

[00:47:00] Speaker 00:
The same is true here.

[00:47:01] Speaker 00:
Judge Rogers, with respect to your question about, I think you were referring to the provision in the statute that allows small refiners to petition for an exemption.

[00:47:11] Speaker 00:
And the statutory language there is very different.

[00:47:14] Speaker 00:
It puts the onus on the small refiner to petition, and the relief to be granted is very narrow.

[00:47:21] Speaker 00:
This statute says EPA, the administrator, shall conduct the periodic review.

[00:47:29] Speaker 01:
I wasn't clear if your client was a small refiner, but in any event, that aside... It's a different provision, different procedure, different remedy.

[00:47:39] Speaker 01:
And you know of no procedures such as I was discussing with counsel for EPA?

[00:47:45] Speaker 00:
Not that would allow us to compel EPA to follow the statutory command to conduct a periodic review.

[00:47:53] Speaker 00:
This is the only opportunity that we have to enforce the statute.

[00:47:58] Speaker 00:
As your questions to my colleague revealed, this really is an attempt to avoid both notice and comment and any form of judicial review.

[00:48:13] Speaker 00:
Thank you.

[00:48:13] Speaker 00:
Thank you.

[00:48:16] Speaker 00:
Stand please.