Supreme Court Decides Environmental Protection Agency v. Calumet Shreveport Refining, L.L.C.

On June 18, 2025, the U.S. Supreme Court decided Environmental Protection Agency v. Calumet Shreveport Refining, L.L.C., No. 23-1229, holding that the EPA’s denials of certain small refinery exemption petitions were locally or regionally applicable actions that fell within the “nationwide scope or effect” exception of the Clean Air Act (CAA), requiring any challenges to the actions to be filed in the U.S. Court of Appeals for the District of Columbia Circuit.

Any challenge to an action taken by the EPA under the CAA must be filed in one of the 12 geographically based circuit courts of appeals. The CAA establishes a three-part system for determining which circuit court of appeals is the appropriate venue for a particular challenge to an EPA action. First, challenges to “nationally applicable” EPA actions must be filed in the Court of Appeals for the D.C. Circuit. Second, challenges to EPA actions that are only “locally or regionally applicable” ordinarily must be filed in the appropriate regional circuit court of appeals. Third, under an exception in the CAA, challenges to “locally or regionally applicable” EPA actions that the EPA has found are “based on a determination of nationwide scope or effect” must be filed in the D.C. Circuit, just like challenges to “nationally applicable” EPA actions.

CAA’s renewable fuels program (RFP) requires most domestic refineries to blend a certain amount of ethanol and other renewable fuels into transportation fuel they produce. Covered refineries demonstrate compliance through a system of Renewable Identification Number (RIN) credits, which are generated when renewable fuels are blended; and RIN credits can be purchased and sold. The CAA further permits oil refineries whose average aggregate daily crude oil throughput for a calendar year does not exceed 75,000 barrels, “small refineries,” to apply for an exemption from RFP. A small refinery can obtain an exemption if compliance would cause it “disproportionate economic hardship.” In 2021, the EPA provided notice for public comment on a proposal to deny the exemption petitions of 36 small oil refineries. The EPA’s notice rested on two principles: (1) “disproportionate economic hardship” covers only hardship that is caused by RFP compliance; and (2) as a matter of economics, small refineries ordinarily do not suffer disproportionate economic hardship as a result of the RFP because RIN costs are passed along to consumers. 

After receiving comments, the EPA denied the 36 pending exemption petitions in two omnibus notices. The EPA later denied an additional 69 petitions submitted by other small refineries primarily based on its statutory interpretation of “disproportionate economic hardship” and its RIN passthrough theory. The EPA treated the passthrough theory as creating a presumption against granting exemptions and examined the refineries’ evidence of their specific circumstances to confirm that none had rebutted the presumption. The EPA also found that the denials were reviewable only in the D.C. Circuit because they were “‘nationally applicable’” actions or, alternatively, “locally or regionally applicable” actions “based on a determination of ‘nationwide scope or effect.’” 

Small refineries challenged the EPA’s denials in several regional circuit courts of appeals, most of which either dismissed the petitions for improper venue or transferred them to the D.C. Circuit. The Fifth Circuit Court of Appeals, however, rejected the EPA’s request for a transfer to the D.C. Circuit of petitions filed by six small refineries, reasoning that the EPA’s denial notices were merely “locally or regionally applicable” actions and not based on any determination of nationwide scope or effect because the EPA still looked to refinery-specific facts before issuing its denials. The Fifth Circuit ruled against EPA on the merits, vacating and remanding for further consideration. The EPA sought — and was granted — a writ of certiorari.

The Supreme Court held that the EPA’s denial of a single refinery’s RFP exemption petition is plainly only locally or regionally applicable. As to the exception for actions “based on a determination of nationwide scope or effect,” the Court concluded that an agency action is based on a determination of nationwide “scope” if the agency’s core justification for the action applies throughout the country as a “legal” matter. Further, an agency action is based on a determination of nationwide “effect” if the agency’s core justification for the action applies across the country as a “practical” matter. While the EPA’s view of its action is important, courts must conduct an independent assessment and parse the EPA’s reasoning for taking the action to decide which determinations primarily drove it. 

Applying this framework, the Court found the EPA’s denials of the small refineries’ exemption petitions were based on determinations of nationwide scope or effect. The EPA had invoked both its statutory interpretation and its passthrough theory in justifying its denials, and both of those points applied generically to all refineries regardless of their geographic location. These reasons supplied the core justifications for all the denials, given that the EPA had decided to presumptively deny all pending exemption petitions and only considered refinery-specific considerations to confirm it had no reason to depart from its presumptive disposition.

The Court held the Fifth Circuit had erred in denying the EPA’s request to transfer the petitioners’ challenges to the D.C. Circuit, and vacated and reversed its decision.

Justice Thomas delivered the opinion of the Court, in which Justices Alito, Sotomayor, Kagan, Kavanaugh, Barrett, and Jackson joined. 

Justice Gorsuch filed a dissenting opinion in which the Chief Justice joined.