The Government Declines to Defend 2-1 D.C. Circuit EPCA Ruling Dissent Describes As “Loper Bright avoidance” 

As Professor Jonathan Adler covered in Reason, the Solicitor General has declined to defend the D.C. Circuit’s split-panel decision in American Gas Association v. Department of Energy in the U.S. Supreme Court.  

As my colleague, Ryan Mulvey, previously discussed here, in American Public Gas Association, the D.C. Circuit upheld energy-conservation standards set by DOE under the Energy Policy and Conservation Act effectively banning certain consumer products. In large measure, the merits of this dispute hinge on the meaning of the phrase “performance characteristics,” as it is used in EPCA. In upholding DOE’s interpretation, the majority reasoned that “Congress gave DOE ‘a degree of discretion’ to decide what constitutes a performance characteristic or feature under EPCA,” also adverting to DOE’s putative “expertise” in resolving this type of question. Judge Rao dissented, characterizing the proper interpretation of “performance characteristic” as a “legal question.” In her view: 

The majority largely ducks this question by declaring that EPCA is ambiguous as to the meaning of “performance characteristic” and “utility.” . . . The majority takes this ambiguity as a license to defer to the Department. But this Loper Bright avoidance is inconsistent with the Supreme Court’s directive that a court must “use every tool at [its] disposal to determine the best reading of the statute and resolve the ambiguity.” 

In January, the American Public Gas Association and other groups asked the U.S. Supreme Court to review the D.C. Circuit’s decision. Their petition presents an interesting and important Loper Bright implementation question: “Whether courts may defer to an agency’s legal interpretation of a statute because an agency applied the statute to undisputed facts, despite this Court’s holding in Loper Bright Enterprises v. Raimondo that courts must construe statutes without deference to agency statutory interpretations.” Yesterday, the government filed a response “agree[ing] that the rules at issue rest on a legal error” and asking the Court to GVR the petition. The government’s response also suggests a GVR is appropriate to give the D.C. Circuit an opportunity to clarify the scope of its holding, i.e., whether it is factbound (in which case DOE can address it via another rulemaking) or if it rests on agreement with DOE’s 2021 interpretation of EPCA (in which case the government indicated it may seek further review).

Michael Pepson is regulatory counsel at Americans for Prosperity Foundation.