SCOTUS Could Strike Down EPA’s Unconstitutional Overreach

The EPA under the Biden Administration crafted a cap-and-trade scheme to allocate market share in the multibillion-dollar hydrofluorocarbons industry — including to “new market participants” based on the promotion of “equity.” Now, one of the businesses the EPA rendered a market-share loser under the federal agency’s unconstitutional take-over of the hydrofluorocarbon industry seeks review by the Supreme Court. And that pending petition represents a sleeper case that could implode much of the administrative state if it makes it onto the high court’s docket next term. Next Thursday, the Supreme Court will conference over the pending petition for review, called a petition for certiorari, in the case of RMS of Georgia, LLC, dba Choice Refrigerants v. EPA.

The petitioner, known more widely as Choice Refrigerants, is a small business operating out of Georgia which invested in patented blends of refrigerants for air conditioning and other products in the early 2000s. At the time, the EPA encouraged the development of hydrofluorocarbons to replace the ozone-depleting refrigerants then on the market. In December of 2020, Congress passed a statute called the AIM Act, short for the American Innovation and Manufacturing Act of 2020, which mandated a phasedown in the United States of hydrofluorocarbons using a cap-and-trade program. The AIM Act provided for a phased elimination of 85% of hydrofluorocarbons produced in, or imported to, the United States. While Congress detailed in the AIM Act the cap for each phase of the plan to reduce hydrofluorocarbons, the statute provided no direction for the EPA to decide who should receive “allowances” under the law.

With no guidance from Congress, the EPA invented its own standards for doling out allowances, with the EPA reserving millions of allowances for “new entrants.” The EPA’s final rule from October 5, 2021, also expressly provided multiple times that, in allocating market share, it could consider “equity.” The EPA later issued a final rule in July of 2023 to cover allocation of hydrofluorocarbons from 2024 through 2028. That final rule continued to provide for allowances to “new market” entrants, prejudicing Choice Refrigerants and other businesses to the advantage of those deemed worthy by the Biden Administration. When Choice Refrigerants challenged the EPA’s scheme, the EPA initially defended its allocation of market-share by claiming it “was free to issue the allowances in a reasonable manner, reasonably explained,” based on Chevron deference. However, the Supreme Court would later overrule the Chevron doctrine — a doctrine which required courts to defer to an agency’s interpretation of a statute so long as it was reasonable.

Source: SCOTUS Could Strike Down EPA’s Unconstitutional Overreach

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SCOTUS Could Strike Down EPA’s Unconstitutional Overreach

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