HARDI v. EPA Update: Oral Arguments

Today the United States Court of Appeals for the DC Circuit heard oral arguments from HARDI, Worthington Industries, Choice Refrigerants, and the Department of Justice on behalf of EPA. This is the final step in HARDI’s litigation before the court releases its judgment next year. HARDI began this process nearly a year ago:

HARDI’s litigation is based on two main arguments asking the court to overturn the requirement to use refillable cylinders and a QR electronic tracking system for all cylinders containing HFCs. EPA instituted these requirements based on the words “shall ensure” in subsection (e)(2)(B), however, the full subsection in context is not a regulatory grant of authority (emphasis added):

(B) COMPLIANCE.—For each year listed on the table contained in subparagraph (C), the Administrator shall ensure that the annual quantity of all regulated substances produced or consumed in the United States does not exceed the product obtained by multiplying—
(i) the production baseline or consumption baseline, as applicable; and
(ii) the applicable percentage listed on the table contained in subparagraph (C).

Today’s oral arguments gave the petitioners an opportunity to make their case directly with the judges that will be deciding the case. While the decision will not be released until 2023, questions and comments from the judges can help show their thinking on the case. A key quote from Judge Walker on HARDI’s argument that EPA exceeded their authority under the AIM Act, “I look at (e)(2)(B), it looks like a math formula, it looks like it is telling the agency to use this math formula, no more no less.”

Judge Pillard did push back on both HARDI and the government over the term “shall ensure” used by EPA to create these regulations. Judge Pillared disagreed with HARDI that the clause limits the power of EPA while also criticizing the government as to whether “shall ensure” would be a limitless grant of power: “What about the blank check argument? I mean we really have to be concerned when something is phrased as generally as it is, ‘shall ensure.’ I mean in some sense the entire act is explaining how the EPA ‘shall ensure’ that only the requisite phase-down quantities are manufactured and consumed. So, you have a problem there because there is a lot of specification in the rest of the act and you’re saying ‘no that doesn’t exhaust what we do, we have other residual authority’ what are the limits on that?” Judge Walker also followed up on this point by questioning the limits on the government’s authority under their interpretation.

The final step in HARDI v. EPA will be the release of the court’s opinion in 2023, likely sometime in Q2 through Q4.

You can listen to the full oral arguments below.