United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed: April 22, 2011
No. 10-1070
NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION,
PETITIONER
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
GROWTH ENERGY AND NATIONAL BIODIESEL BOARD,
INTERVENORS
Consolidated with 10-1071
On Petition for Rehearing En Banc
Before: SENTELLE*, Chief Judge, and GINSBURG,
HENDERSON*, ROGERS, TATEL, GARLAND, BROWN*,
GRIFFITH, and KAVANAUGH, Circuit Judges.
2
ORDER
Petitioners’ petition for rehearing en banc, the responses
thereto, and the reply were circulated to the full court, and a
vote was requested. Thereafter, a majority of the judges
eligible to participate did not vote in favor of the petition.
Upon consideration of the foregoing, it is
ORDERED that the petition be denied.
Per Curiam
FOR THE COURT:
Mark J. Langer, Clerk
BY: /s/
Jennifer M. Clark
Deputy Clerk
* Circuit Judge Henderson did not participate in this matter.
* A statement by Circuit Judge Brown, with whom Chief
Judge Sentelle joins, dissenting from the denial of the petition
for rehearing en banc is attached.
3
BROWN, Circuit Judge, joined by SENTELLE, Chief Judge,
dissenting from the denial of rehearing en banc: It is a
commonplace of administrative law that “[a]n agency may
not promulgate retroactive rules absent express congressional
authority.” Nat’l Min. Ass’n v. Dep’t of Labor, 292 F.3d 849,
859 (D.C. Cir. 2002). We have previously speculated, “[t]here
may be an exception for situations in which the ‘statute
prescribes a deadline by which particular rules must be in
effect’ and the ‘agency misses that deadline.’” Sierra Club v.
Whitman, 285 F.3d 63, 68 (D.C. Cir. 2002) (quoting Bowen v.
Georgetown Univ. Hosp., 488 U.S. 204, 224–25 (1988)
(Scalia, J., concurring)). But until this case, we have never so
held. The panel opinion holds that an agency may promulgate
fully retroactive regulations absent express congressional
authority, as long as “implicit” authority for the retroactivity
may be discerned in the structure of the relevant statute. Nat’l
Petrochemical & Refiners Ass’n v. EPA, 630 F.3d 145, 163
(D.C. Cir. 2010). I respectfully disagree. The exception
adopted here conflicts with the Supreme Court’s clear-
statement rules, usurps legislative power, renders statutory
deadlines precatory, multiplies uncertainty for regulated
entities, and encourages lethargic administration. For these
reasons, we should have reheard this case en banc.
I
Congress enacted the Energy Independence and Security
Act (“EISA”) on December 19, 2007, to increase the volume
of renewable fuel mandated for annual use by the Energy
Policy Act of 2005 (“2005 Act”) and to expand the class of
fuels subject to those standards. The EISA required the EPA
to promulgate implementing regulations within a year. 42
U.S.C. § 7545(o)(2)(A)(i). EPA missed this deadline by more
than a year, publishing on March 26, 2010, its Final Rule
which became effective on July 1, 2010. 75 Fed. Reg. 14,670.
4
To compensate for its delayed implementation of the EISA’s
more stringent standards, the EPA rolled the 2009 volume
requirement into the 2010 requirement, requiring the industry
to use the combined volume of renewable fuel by the 2010
compliance date, February 8, 2011. Id. at 14,676. The panel
assumed, without deciding, that the EPA’s regulation had
primary, not secondary, retroactive effects. Nat’l
Petrochemical & Refiners Ass’n v. EPA, 630 F.3d 145, 162
(D.C. Cir. 2010). In other words, the court accepted the
petitioners’ view that the regulation altered “the past legal
consequences of past actions,” not just the value of past
investments made in reliance on the old rule. Nat’l Cable &
Telecomms. Ass’n v. FCC, 567 F.3d 659, 670 (D.C. Cir.
2009).
Although the statute contains no “express congressional
authority” for retroactive rulemaking, Nat’l Min. Ass’n, 292
F.3d at 859, the court nevertheless concluded that “any
primary retroactive effects” of the EPA’s Final Rule “were
implicitly authorized under the EISA,” 630 F.3d at 162,
because some degree of retroactivity was foreseeable in any
event. Even if the EPA had published its regulations on the
statutory deadline, the Final Rule, including the renewable
fuel standard for 2009, would not have gone into effect until
February 18, 2009, after the 60-day Congressional Review
period mandated by 5 U.S.C. § 801(a)(3). But the EISA
specified that the implementing regulations should “ensure”
the statutory volumes are used each year “[r]egardless of the
date of promulgation.” 42 U.S.C. § 7545(o)(2)(A)(iv). Thus,
the court reasoned, Congress anticipated at least a month and
a half of potential retroactive application. Nat’l
Petrochemical, 630 F.3d at 163. The court also looked to a
provision of the 2005 Act that set a default renewable fuel
standard for the year 2006 in the event the EPA failed to
promulgate regulations by the 2005 Act’s statutory deadline.
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Id. (citing 42 U.S.C. § 7545(o)(2)(A)(iv)). Even though the
EISA contains no similar provision for 2009, the court
interpreted the 2005 Act’s default rule as a sign that
Congress, when it passed the EISA in 2007, contemplated the
EPA might miss its deadline. Id. According to the court, this
and the “regardless of the date” provision reflected
“Congress’ focus on ensuring the annual volume requirement
was met regardless of EPA delay.” Id. The court concluded
that these structural features of the EISA and its predecessor
gave the EPA “clear albeit implicit authority . . . to apply both
the 2009 and 2010 volume requirements in the 2010 calendar
year.” Id.
II
In upholding the EPA’s retroactive rulemaking absent
express congressional authority, the panel opinion relies on an
atypical concurring opinion by Justice Scalia. Nat’l
Petrochemical, 630 F.3d at 162–63 (quoting Bowen, 488 U.S.
at 224–25 (Scalia, J., concurring)). Writing only for himself,
Justice Scalia speculated,
It may even be that implicit authorization of
particular retroactive rulemaking can be found
in existing legislation. If, for example, a statute
prescribes a deadline by which particular rules
must be in effect, and if the agency misses that
deadline, the statute may be interpreted to
authorize a reasonable retroactive rule despite
the limitation of the APA.
488 U.S. at 224–25. The Supreme Court has never endorsed
this view. Although we have treated as “substantially
authoritative” the distinction Justice Scalia drew between
primary and secondary retroactive effects in the same
opinion, see Celtronix Telemetry, Inc. v. FCC, 272 F.3d 585,
6
588 (D.C. Cir. 2001) (citing Bergerco Canada v. U.S.
Treasury Dep’t, 129 F.3d 189, 192–93 (D.C. Cir. 1997)), we
have never, until now, adopted his hypothetical exception to
the general rule against primary retroactivity. In Sierra Club
v. Whitman we only repeated Justice Scalia’s speculation that
“[t]here may be an exception for situations in which the
‘statute prescribes a deadline by which particular rules must
be in effect’ and the ‘agency misses that deadline.’” 285 F.3d
63, 68 (quoting Bowen, 488 U.S. at 224–25).
Neither Justice Scalia in Bowen nor our court in Whitman
had occasion to decide the lawfulness (or the wisdom) of
allowing retroactive rulemaking on the basis of implicit
congressional authorization. When the opportunity finally
presented itself in this case, several considerations should
have led us to reject that hypothesis.
A
The court’s exception to the categorical rule against
retroactive rulemaking conflicts with the Supreme Court’s
clear-statement rules. The enactments of Congress itself will
not be given retroactive effect absent a demonstration of
“clear congressional intent” in the form of an “unambiguous
directive” or “express command.” Martin v. Hadix, 527 U.S.
343, 354 (1999) (quoting Landgraf v. USI Film Prods., 511
U.S. 244, 280 (1994)); see Lindh v. Murphy, 521 U.S. 320,
325 (1997) (describing Landgraf’s “clear-statement rule”);
Plaut v. Spendthrift Farm, 514 U.S. 211, 237 (1995)
(“[S]tatutes do not apply retroactively unless Congress
expressly states that they do.”). 1 And “[i]t is axiomatic that an
1
We recently suggested in dicta that a statute could be given
retroactive effect if that result were indicated by “clear evidence in
the legislative history.” Lytes v. DC Water & Sewer Auth., 572 F.3d
936, 939–40 (D.C. Cir. 2009). We received that notion from the
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administrative agency’s power to promulgate legislative
regulations is limited to the authority delegated by Congress.”
Bowen, 488 U.S. at 208. It follows that an agency lacks
“power to promulgate retroactive rules unless that power is
conveyed by Congress in express terms.” Id.
The panel opinion, however, finds in the EISA’s
structure “implicit” authority for retroactive rulemaking that
falls far short of a clear statement. 630 F.3d at 162, 163. In so
doing, we permit an agency to seize by implication a power
that Congress itself may wield only by “unambiguous
directive.” Martin, 527 U.S. at 354.
B
The court’s missed-deadline exception invades the
legislative function, since it is for Congress to decide how and
when legislative regulations will go into effect. See Bowen,
488 U.S. at 208. The first branch of government is not
helpless. If Congress were not content to leave the status quo
in place until the EPA eventually promulgated its Final Rule,
Congress could have included its own interim rules in the
statute. See, e.g., 26 U.S.C. §§ 179D(f), 7807(a). This is
effectively what Congress did in the 2005 Act by including a
Ninth Circuit. Id. (citing Koch v. SEC, 177 F.3d 784, 786 n.3 (9th
Cir. 1999)). The Supreme Court’s unambiguous restatements of
Landgraf cast the Ninth Circuit’s view into grave doubt, and we
have never given a statute retroactive effect on the basis of
legislative history alone. Indeed, less than a month before Lytes, we
had expressed skepticism over the use of legislative history to
justify retroactivity. See Summers v. DOJ, 569 F.3d 500, 504 (D.C.
Cir. 2009) (rejecting the appellant’s argument for retroactive
application of an attorney’s fee provision based on legislative
history and observing “the general problem that neither a
committee nor a single Senator can speak for ‘the Congress’”).
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default renewable fuel standard for the year 2006. 42 U.S.C.
§ 7545(o)(2)(A)(iii). Or Congress could have authorized
rulemaking without notice-and-comment procedures. See Air
Transp. Ass’n of Can. v. FAA, 254 F.3d 277 (D.C. Cir. 2001).
Or Congress could have allowed the agency to promulgate
interim-final rules before undertaking notice-and-comment
procedures. See Michael Asimow, Interim-Final Rules:
Making Haste Slowly, 51 ADMIN. L. REV. 703 (1999); see,
e.g., 26 U.S.C. § 9833. Or Congress could have used some
combination of interim statutory rules and interim agency
rules to meet its legislative goals with minimal delay. See,
e.g., 6 U.S.C. § 944(a)(2), (4)(B). Where Congress has relied
instead on the default notice-and-comment procedures of the
APA, courts should not infer congressional intent to permit
retroactive rulemaking.
C
There are other reasons to doubt the wisdom of the
purely hypothetical exception Justice Scalia theorized to the
categorical rule against retroactive rulemaking. Bowen, 488
U.S. at 224 (Scalia, J., concurring). In the first place, any
exception at all would seem to conflict with his textual
emphasis on “future effect” as the defining trait of a “rule”
under the APA. Id. at 217 (quoting 5 U.S.C. § 551(4)); see id.
(“The only plausible reading of the italicized phrase is that
rules have legal consequences only for the future.”). This
exception in particular seems ill advised from the perspective
of good administration. In practice, it lets agencies like the
EPA get away with violating explicit congressional time
limits by promulgating untimely regulations with retroactive
effects. The missed-deadline exception creates perverse
incentives, rewarding dilatoriness and making regulatory
burdens even less predictable. If an agency can accomplish
tomorrow what the statute says to do today, Congress will
9
lose a common and effective means of directing agency
priorities.
Of course, an agency does not lose all power to act when
a statutory deadline expires. Barnhart v. Peabody Coal Co.,
537 U.S. 149, 172 (2003). But it does not follow that an
agency acquires retroactive rulemaking power by missing a
deadline. Justice Scalia’s dissent in Barnhart suggests he may
no longer adhere to the exception he hypothesized in Bowen.
Unlike the Barnhart majority, Justice Scalia emphasized “the
surprise of new (and retroactive) liabilities” imposed by the
tardy agency action. Id. at 184 (Scalia, J., dissenting). If he
had applied his missed-deadline exception to the facts in
Barnhart, Justice Scalia would have approved the
retroactivity he perceived in the agency’s post-deadline
action. By applying his hypothetical exception in an actual
case, we venture where Justice Scalia himself has declined to
go.
D
The panel opinion leaves in doubt whether, as Justice
Scalia suggested in Bowen, the existence of a statutory
deadline is sufficient by itself to justify retroactivity when the
agency fails to meet the deadline, see Nat’l Petrochemical,
630 F.3d at 162 (quoting Bowen, 488 U.S. at 224–25 (Scalia,
J., concurring)), or whether other evidence of congressional
intent is necessary, see id. at 163. To the extent the panel
opinion purports to rely on other structural features of the
EISA for implicit authority, it grasps at straws.
The panel opinion notes the 60-day Congressional
Review period for major rules could have resulted in
retroactive application of a timely rule to January and part of
February 2009, even if the Final Rule were promulgated by
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the December 2008 deadline. 630 F.3d at 163; see 5 U.S.C.
§ 801(a)(3). But just because a statutory “provision on its face
permits some form of retroactive action” does not mean
Congress intended to grant general “authority for the
retroactive promulgation of . . . rules.” Bowen, 488 U.S. at
209; see Administrators of the Tulane Educ. Fund v. Shalala,
987 F.2d 790, 797–98 (D.C. Cir. 1993) (That a statute “by its
very terms, is intended to have some retroactive effect . . .
does not answer the separate question of whether [a particular
implementing regulation] is improperly retroactive.”). Thus,
the potential for a timely renewable fuel rule to have limited
retroactive effects does not imply Congress authorized
retroactive application of an untimely rule to the entire year.
If anything, it suggests Congress contemplated the possibility
of retroactivity and was content to restrict its scope.
As the panel opinion points out, the 2005 Act, which the
EISA amended, contained a default fuel standard for the year
2006 in case the EPA failed to promulgate regulations by the
statutory deadline. 2 But the 2005 Act’s inclusion of a now-
obsolete default standard proves nothing about what Congress
intended in 2007 when it enacted the EISA. When that time
came, Congress declined to update the old default provision
to correspond with its new delegation of rulemaking
authority. The opinion concludes somewhat hesitantly that the
absence of a default standard in the EISA “appears explained
by the fact that Congress was expanding an existing
renewable fuel program and EPA could, as it did, leave in
place the [prior] regulatory program . . . until the revised
regulations under the EISA . . . were finalized.” Nat’l
2
42 U.S.C. § 7545(o)(2)(A)(iv) (“If the Administrator does not
promulgate regulations under clause (i), the percentage of
renewable fuel in gasoline sold or dispensed to consumers in the
United States, on a volume basis, shall be 2.78 percent for calendar
year 2006.” (emphasis added)).
11
Petrochemical, 630 F.3d at 163 (emphasis added). But the
EISA’s omission can just as easily be interpreted as evidence
that the 2007 Congress did not anticipate any delay from an
agency now experienced with administering renewable fuel
standards.
III
We once said “it would . . . be odd to conclude that
Congress implicitly entrusted a laggard agency with the
authority to devise a remedy for its own untimeliness.”
Linemaster Switch Corp. v. EPA, 938 F.2d 1299, 1303 (D.C.
Cir. 1991). That is precisely what the panel concludes in this
case. We have no authority to grant an agency a free pass to
promulgate retroactive rules just because it can’t or won’t get
the job done within the time Congress mandates. That will be,
I fear, the ultimate effect of the panel’s opinion. The better
course would have been to reaffirm the clear-statement rule
declared by the Bowen majority and repeated in our most
recent pronouncements on retroactive rulemaking. “An
agency may not promulgate retroactive rules absent express
congressional authority.” Nat’l Min. Ass’n, 292 F.3d at 859.
I respectfully dissent from the denial of rehearing en
banc.