Cross Oil Refining & Marketing, Inc. v. Regan

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CROSS OIL REFINING & MARKETING,
INC.,
Civil Action No. 21-1825 (JMC)
Plaintiff,
v.
MICHAEL S. REGAN,
Defendant.
MEMORANDUM OPINION
Plaintiff Cross Oil and Defendant Michael S. Regan, the Administrator of the
Environmental Protection Agency (EPA), have cross-moved for summary judgment. ECF 11; ECF
13. The Parties agree that the Administrator’s failure to decide Cross Oil’s petition for a hardship
exemption from Congress’s renewable-fuel program within ninety days of receipt of the petition
violates 42 U.S.C. § 7545(o)(9)(B). And the Parties’ requested deadlines for the EPA to decide
Cross Oil’s petition overlap. This Court thus GRANTS Cross Oil’s motion for summary judgment,
ECF 11, and DENIES the Administrator’s cross-motion as moot. The Administrator is
ORDERED to decide Cross Oil’s petition within thirty days of the issuance of this Order.1
I. BACKGROUND
Congress’s renewable-fuel program is codified at 42 U.S.C. § 7545(o). The program
imposes volume restrictions on refineries; these restrictions are administered by the EPA. See
1
Unless otherwise indicated, the formatting of citations has been modified throughout this opinion, for example, by
omitting internal quotation marks, emphases, citations, and alterations and by altering capitalization. All pincites to
documents filed on the docket in this case are to the automatically generated ECF Page ID number that appears at the
top of each page.
1
§ 7545(o)(2)(B)(ii). Relevant here are two neighboring subparagraphs that apply to small
refineries: subparagraph A (§ 7545(o)(9)(A)) and subparagraph B (§ 7545(o)(9)(B)).
Under subparagraph A(i), Congress temporarily exempted all small refineries from the
renewable-fuel program’s obligations until 2011. See § 7545(o)(9)(A)(i). Congress also ordered
the Secretary of Energy to study whether small refineries’ compliance with the renewable-fuel
program would cause “disproportionate economic hardship” to those refineries.
§ 7545(o)(9)(A)(ii)(I). If the Secretary of Energy determined that a small refinery would suffer
such hardship, subparagraph A(ii) directed the EPA Administrator to extend the subparagraph A(i)
blanket exemption by two-or-more years. See § 7545(o)(9)(A)(ii)(II).
Turning to subparagraph B, Congress commanded that “a small refinery may at any time
petition the [EPA] Administrator for an extension of the exemption under subparagraph (A) for
the reason of disproportionate economic hardship.” § 7545(o)(9)(B)(i). Congress set a “deadline
for action on petitions”: “The [EPA] Administrator shall act on any petition submitted by a small
refinery for a hardship exemption not later than 90 days after the date of receipt of the petition.”
§ 7545(o)(9)(B)(iii) (emphasis added).
Put simply: small refineries were exempt from the renewable-fuel program until 2011
under subparagraph A(i)’s blanket exemption, could be exempt until at least 2013 under
subparagraph A(ii)’s two-year-plus extension, and could petition for a hardship exemption under
subparagraph B.
Cross Oil is a small refinery. ECF 11-1 at 1. On May 11, 2020, Cross Oil petitioned the
EPA for a hardship exemption under subparagraph B; the EPA received the petition on or around
the same day. Id. at 2. Per subparagraph B’s ninety-day mandate, the EPA’s decision on Cross
2
Oil’s petition was due on or around August 10, 2020. The EPA has yet to act on Cross Oil’s
petition. ECF 13 at 1-2.
Cross Oil sued the EPA in the District Court of the District of Columbia on July 8, 2021,
seeking to compel the EPA to grant or deny its petition. ECF 1 ¶¶ 1-3. On November 16, 2021, the
Parties jointly moved to stay the case pending settlement negotiations. ECF 7. The Court granted
the joint motion, ordering the Parties to update the Court every thirty days. 9/25/21 Min. Order.
On December 7, 2021, the EPA issued the “Proposed RFS Small Refinery Exemption
Decision.” In that proposed decision, the EPA conveyed that none of the sixty-five small refineries
with pending subparagraph B petitions—including Cross Oil—have demonstrated that compliance
with the renewable-fuel program has caused disproportionate economic hardship. So the EPA
proposed to deny all sixty-five petitions and presented available data on the program’s costs and
market dynamics for public review and comment. ECF 8-1 at 66-67.
Cross Oil and the EPA filed a joint status report on December 16, 2021. ECF 8. Pointing
to subparagraph B’s command that “the [EPA] Administrator shall act . . . not later than 90 days
after the date of receipt of the petition,” § 7545(o)(9)(B)(iii) (emphasis added), Cross Oil urged
the Court to lift the stay. ECF 8 at 3-4. The EPA requested that the stay remain in place as it worked
to turn its proposed decision into a final decision. Id. at 4-5. Agreeing with Cross Oil, the Court
lifted the stay. 2/20/22 Hr’g Tr. at 13. The Parties then cross-moved for summary judgment. ECF
11; ECF 13. The EPA’s cross-motion conceded liability and briefed only the issue of remedy. ECF
13 at 1.
II. LEGAL STANDARD
A party moving for summary judgment bears the burden of showing that no genuine
dispute as to any material fact exists and the movant’s entitlement to judgment as a matter of law.
Fed. R. Civ. P. 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine
3
dispute of material fact exists “if the evidence, viewed in a light most favorable to the nonmoving
party, could support a reasonable jury’s verdict for the non-moving party.” Hairston v. Vance-
Cooks, 773 F.3d 266, 271 (D.C. Cir. 2014). When resolving cross-motions for summary judgment,
courts must determine whether either side merits judgment as a matter of law. See Trudel v.
SunTrust Bank, 288 F. Supp. 3d 239, 245 (D.D.C. 2018).
III. ANALYSIS
Subparagraph B’s use of the word “shall” clearly requires the EPA Administrator to decide
a small refinery’s hardship exemption no later than ninety days after the petition is received. See
Kingdomware Techs., Inc. v. United States, 579 U.S. 162, 171 (2016) (explaining that “‘shall’
usually connotes a requirement” and that “when a statute distinguishes between ‘may’ and ‘shall,’
it is generally clear that ‘shall’ imposes a mandatory duty.”); compare § 7545(o)(9)(B)(i) (“A small
refinery may at any time petition the Administrator for an extension of the exemption under
subparagraph (A) for the reason of disproportionate economic hardship” (emphasis added)), with
§ 7545(o)(9)(B)(iii) (“The Administrator shall act on any petition submitted by a small refinery
for a hardship exemption not later than 90 days after the date of receipt of the petition.” (emphasis
added)).
Here, the EPA concedes both that it “must decide any such [subparagraph B] petition no
later than 90 days after the date the petition is received” and “that [the EPA] failed to perform its
nondiscretionary duty to respond by [subparagraph B’s] statutory deadline.” ECF 13 at 1-2.
Accordingly, summary judgment is properly granted to Cross Oil as to the issue liability.
Because everyone is on the same page that the EPA has violated subparagraph B, this Court
invokes its equitable authority to set a deadline for the EPA Administrator to decide Cross Oil’s
petition. See NRDC v. Train, 510 F.2d 692, 705 (D.C. Cir. 1974) (“The authority to set enforceable
4
deadlines both of an ultimate and an intermediate nature is an appropriate procedure for exercise
of the court’s equity powers to vindicate the public interest.”).
Cross Oil contends that the EPA Administrator should be compelled to decide the
refinery’s petition within thirty days of the issuance of this order. ECF 11 at 1. For the reasons
supplied in the refinery’s briefing, the Court agrees with Cross Oil that thirty days is a reasonable
deadline. ECF 11; ECF 16. The Administrator requests a deadline of June 3, 2022—which is
within thirty days after the issuance of this order. ECF 13 at 1. Because of the timing of the Parties’
briefing of their cross-motions, the EPA’s opposition to Cross Oil’s proposed deadline has
evaporated. Id. at 6 n.2 (“[The] EPA does not necessarily oppose Cross Oil’s motion, so long as
the Court does not order [the] EPA to issue a decision on Cross Oil’s petition before June 3,
2022.”). The Court will thus order the EPA to decide Cross Oil petition within thirty days and
denies the EPA’s cross-motion as moot.
IV. CONCLUSION
Cross Oil correctly contends—and the EPA Administrator concedes—that the EPA has
violated § 7545(o)(9)(B). And the Parties’ proposed deadlines for the EPA to decide Cross Oil’s
petition overlap. Cross Oil’s motion for summary judgment, ECF 11, is thus GRANTED and the
EPA Administrator’s cross-motion, ECF 13, is DENIED as moot. The Administrator is thus
ORDERED to decide Cross Oil’s petition within thirty days of the issuance of this order.
SO ORDERED.
DATE: May 5, 2022
Jia M. Cobb
U.S. District Court Judge
5