SCOTUS Clarifies Where EPA Challenges May Be Brought

The U.S. Supreme Court recently issued two opinions that clarify where challenges to final actions by the Environmental Protection Agency (EPA) may be filed. In both EPA v. Calumet Shreveport Refining, LLC and Oklahoma v. EPA, the EPA attempted to remove the cases from regional circuit courts to the D.C. Circuit.

A Bird’s Eye View of the Clean Air Act

The Clean Air Act (CAA) is a federal environmental law regulating air emissions. 42 U.S.C. § 7401 et seq. The CAA empowers the EPA to accomplish this mission. One of the EPA’s key responsibilities is developing National Ambient Air Quality Standards (NAAQS) to protect public health and welfare. NAAQS set limits on the quantity of a pollutant that sources can emit into the air. There are several other tools the EPA uses to prevent further deterioration and improve our nation’s air quality.

The Clean Air Act’s Venue Provision—42 U.S.C. § 7607(b)(1)

Environmental groups, industries, and citizens frequently challenge the EPA’s policies and decisions—sometimes for going too far and sometimes for not doing enough. The CAA’s venue provision, 42 U.S.C. § 7607(b)(1), determines where these challenges should be filed. After 1977, all EPA actions became reviewable in a federal court of appeals. The statute further explains which circuit court each challenge should be filed. For nationally applicable final actions, such as National Ambient Air Quality Standards (NAAQS), the EPA’s action can only be reviewed by the D.C. Circuit. For locally or regionally applicable actions, like State Implementation Plans (SIPs), the action should be filed in the appropriate regional circuit court. For example, if a petitioner wanted to challenge the EPA’s approval of Indiana’s SIP, the challenge should only be filed with the Seventh Circuit. Section 7607(b)(1) includes an exception to this local or regional applicability rule, which allows a challenge to be filed in the D.C. Circuit “if [it] is based on a determination of nationwide scope of effect” and “if in taking such action [EPA] finds and publishes that such action is based on such a determination.”

EPA v. Calumet Shreveport Refining, LLC, 605 U.S. --- (2025)

One of the other “tools” the EPA uses to protect air quality is the CAA’s Renewable Fuel Program (RFP). The RFP “requires most domestic refineries to blend a certain amount of ethanol and other renewable fuels into the transportation fuels they produce.” Each refinery’s specific obligation depends on its proportional share of “nationwide volume mandates,” and compliance is demonstrated through “credits.” The CAA initially exempted small refineries, and when this exemption expired in 2011, the EPA allowed small refineries facing “disproportionate economic hardship” to extend their exemption for two more years. § 7545(o)(9)(A)(ii). At any time, a small refinery can petition for another economic hardship exemption. § 7545(o)(9)(B)(i).

The EPA denied over 100 of these economic hardship exemption petitions in 2022. In its notice published in the Federal Register explaining these denials, the EPA determined that the “disproportionate economic hardship” exemption required the financial situation to arise out of compliance with the RFP. Second, the EPA found that small refineries typically do not face the requisite economic hardship because the costs of RFP compliance are typically passed onto consumers. In issuing its denials, the EPA stated that its decision is reviewable only in the D.C. Circuit because the notices were “nationally applicable” or “based on a determination of nationwide scope or effect” as required under § 7607(b)(1).

Despite the EPA’s venue opinion, several small refineries filed challenges in various courts of appeals. Most courts agreed with the EPA and either dismissed the case or transferred it to the D.C. Circuit. However, the Fifth Circuit believed the EPA’s denials were “locally or regionally applicable actions” and heard the challenges before it. The court vacated the EPA’s economic hardship denials. The Supreme Court granted certiorari. In a 7-2 opinion authored by Justice Thomas, the Court dove into a case of statutory interpretation to provide clarity to the EPA’s venue provision.

To determine whether an action is “nationally applicable” versus “locally or regionally applicable,” the Court must first establish the action at issue. The Court decided that each EPA denial of a single refinery’s exemption petition is its own locally or regionally applicable action because its decision is isolated to that particular refinery. The EPA disagreed, arguing that compiling each denial into a single publication in the Federal Register constitutes national applicability. But Justice Thomas rejected this gamesmanship and explained that while the method the EPA uses to publicize its decisions is within the EPA’s discretion, that publication cannot be used to “game” the venue issue.

The EPA hadn’t lost yet. Section 7607(b)(1) outlines a second step if the EPA’s action was locally or regionally applicable. If the local or regional action was based on a determination of nationwide scope or effect, the challenge can still fall within the D.C. Circuit’s jurisdiction. This depends on “if such a determination supplies a core justification for EPA’s action and that courts should evaluate the basis for EPA’s determinations de novo.” In other words, this core justification cannot merely influence the EPA’s decision; it must be the primary driver and explanation. If the EPA significantly relied on some other local or regional rationale, the action does not rise to the level of nationwide scope or effect.

But what does “de novo” mean here? De novo is a Latin legal term meaning “from the beginning.” This means the Court is going to review the EPA’s decision-making from the very start, not just what the EPA explained in briefs or argued to the bench. Reviewing the EPA’s denials under this standard, the Court held that the EPA’s decisions were based on determinations of nationwide scope or effect because the economic data utilized applied to the national refinery market, regardless of geographic location. Thus, the Court held that the Fifth Circuit should have transferred the case to the D.C. Circuit under § 7607(b)(1).

Justice Gorsuch and Chief Justice Roberts dissented.

Oklahoma v. EPA, 605 U.S. --- (2025)

The Court did us a favor and provided an example of when a regional circuit should hear a challenge to EPA action by issuing Oklahoma v. EPA on the same day.

To make sure those NAAQS are met, the EPA works with states to formulate SIPs. SIPs must include plans to address six criteria air pollutants, including carbon monoxide, lead, nitrogen oxide, ozone, particulate matter, and sulfur dioxide. After the State creates its SIP, the EPA reviews it to make sure the plans will effectively manage air pollution by the CAA’s standards. If the EPA disapproves the SIP, the State can correct the deficiencies, or the EPA will issue a Federal Implementation Plan (FIP) for that State.

Relevant here, the EPA revised the NAAQS for ozone and required SIPs to comply with the CAA’s Good Neighbor provision. § 7410(a)(2)(D)(i)(I). The Good Neighbor provision prohibits any State from emitting pollutants in an amount that will contribute significantly to another State’s nonattainment or maintenance of NAAQS. The EPA denied 21 SIPs for failure to comply with this rule. 88 Fed. Reg. 9336. Again, the EPA stated that these disapprovals were only reviewable in the D.C. Circuit but challengers filed suit in various regional circuits.

However, this time, only the Tenth Circuit transferred the challenges before it to the D.C. Circuit. Four other circuit courts kept the case filed before them as a locally or regionally applicable action. The Supreme Court granted certiorari to provide clarity to this piece of the venue provision.

In a much shorter analysis, again written by Justice Thomas, the Court concluded that each individual denial, not the mass Federal Register notice of denial, constituted the separate locally or regionally applicable action. This determination was easier for the Court here than in Calumet because § 7607(b)(1) specifies that a challenge to “any implementation plan under section 7410” is locally or regionally applicable and may only be filed in appropriate circuit court. Section 7410 includes SIPs. Without this statutory guidance, the Court still viewed the EPA’s actions as local ones because the denial (or approval) is only binding on that respective state.

Because the EPA’s denials were locally or regionally applicable, in step 2, the Court must determine if the decisions primarily were driven by a nationwide justification. Here, the EPA stated in its Federal Register notice that each disapproval was “based on ‘a number of intensely factual determinations’ particular to the State at issue.” The Court found that this was opposite to the EPA’s position in Calumet, where the national refinery market was the key driver. Lacking a unified, national reason for denying each SIP, the Court held that SIP challenges are properly heard in regional circuits, not the D.C. Circuit.

Justice Thomas’ opinion was joined by Justices Sotomayor, Kagan, Kavanaugh, Barrett, and Jackson. Justice Gorsuch, joined by Chief Justice Roberts, concurred in the judgment. Justice Alito took no part in the consideration of this case.

Is this a blow to the Clean Air Act or the EPA?

Environmental advocates have criticized the Court for allowing the federal circuits to fracture the Clean Air Act by holding that SIPs can be challenged in the regional circuits. There is no question that the D.C. Circuit is a favorable forum for the EPA. Given these realities, CAA petitioners may feel encouraged to “forum shop” to find a court deemed to be more favorable to their claims.

Here though, the Court did not create new law. In each of these decisions, the Court interpreted and applied § 7607(b)(1) as written by Congress. SIPs were already reviewable in regional circuits, but the “nationwide scope or effect” provision brought the challenges back into the D.C. Circuit’s jurisdiction. With that qualifier clarified, the EPA must now ensure its SIP denials are anchored in a nationwide justification if it wants challenges to its actions to stay in the D.C. Circuit. But that may not be feasible when a SIP is hinged on such state-specific facts. To avoid the possibility of fracturing the applicability of the CAA across the country, Congress may need to step in to revise § 7607(b)(1).

Brianna thanks our summer law clerk, Kaleigh Shaw, for her excellent work on this Supreme Court decision analysis.