Highlights
- The U.S. Supreme Court issued decisions in EPA v. Calumet Shreveport Refining and Oklahoma v. EPA on June 18, 2025, resolving two circuit splits over where challenges to certain U.S. Environmental Protection Agency (EPA) actions under the Clean Air Act (CAA) should be heard.
- The Supreme Court clarified when EPA actions under the CAA are "nationally applicable" (with venue in the U.S. Court of Appeals for the District of Columbia Circuit) versus "locally or regionally applicable" (with venue in the regional circuit courts of appeal), and also when local or regional action is nevertheless "based on a determination of nationwide scope or effect" such that EPA can send review to the D.C. Circuit.
- In Calumet, the Supreme Court held that EPA's 2022 denials of small refinery exemptions were "based on a determination of nationwide scope or effect," requiring venue in the D.C. Circuit rather than in each refinery's regional court of appeal.
- In Oklahoma, the Supreme Court rejected EPA's argument that its disapprovals of state implementation plans under the CAA's Good Neighbor provision were either "nationally applicable" or based on a nationwide determination, requiring venue in regional courts of appeal rather than consolidated review in the D.C. Circuit
The U.S. Supreme Court issued a pair of decisions in EPA v. Calumet Shreveport Refining and Oklahoma v. EPA on June 18, 2025, resolving two related circuit splits regarding proper venue for challenging certain U.S. Environmental Protection Agency (EPA) actions under the Clean Air Act (CAA).1 The selection of venue can have significant strategic implications for both regulators and regulated entities, as Holland & Knight previously reported.
CAA section 307(b)(1) establishes three pathways to determine venue when challenging EPA actions under the CAA:
- First, "nationally applicable" actions can only be challenged in the U.S. Court of Appeals for the District of Columbia Circuit.
- Second, by default, any "locally or regionally applicable" action must be challenged in "the appropriate circuit" for that action.
- Third, however, even if an action is local or regional, venue goes to the D.C. Circuit if EPA finds the action is "based on a determination of nationwide scope or effect" and publishes such a finding.
These cases arose from contrasting lower court decisions. In Calumet, the U.S. Court of Appeals for the Fifth Circuit rejected EPA's published finding of "nationwide scope or effect" for small refinery exemption (SRE) denials under the Renewable Fuel Standard (RFS) program.
By contrast, in Oklahoma, the U.S. Court of Appeals for the Tenth Circuit agreed with EPA that the agency's disapproval of a state implementation plan (SIP) under the Good Neighbor provision was nationally applicable. Each case created a circuit split as applied to the type of CAA provision at issue.
At the Supreme Court, the subject and scope of each of the two EPA actions before the lower courts was critical to assessing when an EPA action has "nationwide applicability" and, if not nationally applicable, when EPA can nevertheless assert that the action is "based on a determination of nationwide scope or effect" to channel review to the D.C. Circuit.
The distinction between CAA litigation venues can have significant strategic implications for litigants. The D.C. Circuit has the most extensive precedent on CAA and administrative law matters, but it is sometimes perceived as more deferential to agencies. Regional circuits may be more attuned to local concerns and offer opportunities to develop case law in ways that may be foreclosed by the D.C. Circuit's extensive precedents in those areas.
Split Decisions Illustrate How to Interpret CAA Venue
The Supreme Court delivered split judgments, siding with EPA in Calumet but against the agency in Oklahoma, creating a nuanced framework for determining when a local or regional action is "based on a determination of nationwide scope or effect" for the purposes of determining venue under the CAA.
The Supreme Court ruled that each of the challenged actions, SRE petition denials and SIP disapprovals, were "locally or regionally applicable." The opinions then focused on whether EPA had permissibly invoked the exception for D.C. Circuit review of local actions that are nevertheless "based on a determination of nationwide scope or effect."
The Supreme Court mandated that courts provide an independent, de novo review of EPA's reasoning without any deference to the agency on whether the exception applies.
The majority opinions, both by Justice Clarence Thomas, illustrate the Supreme Court's emphasis on textualism and plain meaning, with repeated citation to dictionary definitions and little attention paid to EPA's views on how to read CAA Section 307(b)(1). The resulting test focuses on EPA's "determination" – i.e., the agency's justifications for taking the action. The Supreme Court held that a determination has nationwide "scope" if it applies throughout the country as a legal matter and a nationwide "effect" if it applies throughout the country as a practical matter.
Because nearly any federal agency action conceivably has some nationwide consequences, the critical limitation comes from whether the action is "based on" a determination of nationwide scope or effect. Under the Supreme Court's new test, EPA's actions are "based on" nationwide determinations when the nationwide aspect lies at the core of the agency action, making it "the most important part of the agency's reasoning." An action is not based on such scope or effect "if EPA relied in significant part on other, 'intensely factual' considerations or if the key driver of EPA's action is otherwise debatable."
Calumet: EPA's Nationwide Determination Drove the Decisions
In Calumet, the Supreme Court split 7-2, concluding that EPA's published finding of "nationwide scope or effect" for its SRE denials was proper because the local SRE petition denials were "based on" determinations of nationwide scope or effect.
Each of EPA's individual petition denials turned on the agency's uniform interpretation of "disproportionate economic hardship" and an economic theory about renewable identification number (RIN) cost pass-through. These determinations gave rise to "presumptive resolutions" of the SRE petitions, with any refinery-specific considerations serving as "merely peripheral" confirmatory reviews.
Even though each SRE petition denial directly affected only one facility, the core rationales were consistently applied nationwide without significant reliance on facility-specific factual considerations.
Oklahoma: SIP Disapprovals Based on State-Specific Facts
By contrast, the Supreme Court unanimously held in Oklahoma (8-0, with Justice Samuel Alito recused) that EPA's coordinated disapprovals of interstate transport SIPs were "locally or regionally applicable" and also not "based on" a determination of nationwide scope or effect.
The Supreme Court first rejected EPA's primary argument, which was that the SIP disapprovals were not local at all but were "nationally applicable" because they were part of a coordinated effort to address interstate air pollution. The Supreme Court disagreed, noting that the CAA explicitly includes SIP approvals as "local" actions, so SIP disapprovals should also be local given they are "opposite sides of the same coin." The fact that EPA simultaneously disapproved multiple SIPs across the country in a single Federal Register package did not alter this conclusion.
The Supreme Court also rejected the Tenth Circuit's alternate theory the SIP disapprovals were "nationally applicable" because EPA used uniform statutory interpretation and common analytical methods. The Supreme Court clarified that an action's local versus national "applicability" under Section 307(b)(1) refers solely to its formal geographic scope, not the nature of EPA's reasoning. That reasoning can be relevant to the later question (whether a local action is "based on" a nationwide determination), but it cannot transform a locally applicable action into national one.
Applying the test from Calumet, Justice Thomas' opinion concluded that although there were common legal theories applicable to all the SIP disapprovals, the actions themselves were based on "intensely factual determinations" specific to each individual state. Specifically, the SIP disapprovals for Oklahoma and Texas involved highly technical air pollutant modeling and individualized critiques unique to each state's submission. Unlike in Calumet, no abstract legal or economic theories primarily drove the outcomes of the EPA actions in Oklahoma. Instead, EPA intensely reviewed state-specific facts to reach individualized conclusions, making the disapprovals primarily based on local rather than nationwide determinations.
Takeaways
Stakeholders and EPA regulators must now carefully analyze the geographic nature of the action, particularly how it is framed in the CAA itself rather than packaged by EPA. Additionally, for local actions where EPA seeks to centralize D.C. Circuit review by asserting the action is "based on a determination of nationwide scope or effect," stakeholders and the EPA itself will have to closely assess the centrality and nature of EPA's reasoning.
As EPA Administrator Lee Zeldin continues to pursue his deregulatory agenda, there may be instances where the EPA strategically prefers regional circuit review versus D.C. Circuit review. For EPA to secure D.C. Circuit venue for actions affecting multiple discrete states or facilities, its decision must be primarily based on generic reasoning that applies uniformly, nationwide – the more like boilerplate, the better. When the agency's reasoning combines generic principles with site-specific facts, proper venue determinations can become more complicated if EPA chooses to invoke the D.C. Circuit exception.
By raising the bar for when EPA may seek direct review in the D.C. Circuit, these cases may create more opportunities for legal issues to percolate in the regional circuits. This may prove especially true for issues involving the National Ambient Air Quality Standards (NAAQS) such as SIP actions and the mass area designations that customarily follow each revised NAAQS. EPA's strategy for Administrator Zeldin's announced review of the Good Neighbor plan could easily be influenced by these decisions.
For SREs specifically, Calumet vacates the Fifth Circuit opinion and directs challenges to the D.C. Circuit. That court's prior rulings have given slightly more latitude to EPA in determine its SRE methodology. However, if EPA chooses to depart from the U.S. Department of Energy (DOE) scoring matrix mandated in the Fifth Circuit opinion, it may raise fresh retroactivity challenges.
The D.C. Circuit's precedent also requires regulatory compliance costs to be at least one source of economic hardship for an SRE to be granted. The Fifth Circuit opinion would have potentially allowed granting of SREs for economic hardship with no relation to the regulatory program.
Footnote
1 EPA v. Calumet Shreveport Refining, L.L.C. (Case No. 23-1229)(U.S. 2025) and Oklahoma v. EPA (Case No. 23-1067)(U.S. 2025).
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