Evaluating EPA's arguments for RFS waiver authority
Whether the word "supply" can be read to mean something other than an amount or stock, but instead depends on what is available or can be provided, seems like a proverbial splitting of hairs. And it is not likely, on its own, to allow EPA to use its waiver authority in this manner. Ambiguity is not a free pass; giving deference to an agency's interpretation does not require a court to agree with that interpretation. EPA still must demonstrate that its interpretation is a reasonable and permissible reading of the statute in light of Congressional intent. Fundamentally, this goes to the separation of powers among the branches of the federal government in the Constitution, where Article I, Section 1 states that "[a]ll legislative Powers herein granted shall be vested in a Congress of the United States."
Does EPA's proposed rule and its use of the general waiver authority in the statute go beyond implementing the RFS, crossing the Constitutional line into a form of legislating? Congressional intent is very important. As discussed in the previous post, a federal judge has already emphasized that Congress clearly intended for the RFS to expand the production and use of ever higher levels of renewable fuel, and that the volumes provided in the statute were not to be reduced easily. EPA does not dispute this intent. To understand how EPA's arguments would hold up if challenged in court in light of this clear intent, there are three Supreme Court cases that appear to be very instructive.
In the 1994 case MCI Telecommunications Corp. v. American Telephone and Telegraph Co. (a copy of the decision can be found here), the Supreme Court considered an agency's authority to "modify" requirements of a law it administered, especially when those requirements were considered the "centerpiece of the Act's regulatory scheme." The Court did not give the agency deference because the agency's interpretation of its authority to make modifications to the statutory scheme designed by Congress went too far. Even if the agency's idea is a good one, the Court said that it is not entitled to make a fundamental revision to the statute. The Court emphasized that it was "highly unlikely" that Congress would leave such an important determination to agency discretion and "even more unlikely" that it would do so "through such a subtle device" as the authority to make modifications.
In 2000, the Supreme Court disagreed with an agency's claim that it had the authority to regulate tobacco in Food and Drug Administration v. Brown & Williamson Tobacco Corp. (a copy of the decision can be found here). The Court sympathized with the seriousness of the problem the agency was trying to address, but was not persuaded by its argument for authority because an agency "may not exercise its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law." Deference is proper only when Congressional ambiguity implies that Congress meant for the agency to "fill in the statutory gaps" but not for important matters and major questions. Congress is not likely to delegate decisions of "economic and political significance to an agency" and certainly not in "so cryptic a fashion" that requires an "extremely strained understanding" of terms used in the statute. The limits for delegating legislative powers is rooted in the need for political accountability to the voting public, which is primarily Congress: "no matter how important, conspicuous, and controversial the issue, and regardless of how likely the public is to hold the Executive Branch politically accountable" the power of an agency "must always be grounded in a valid grant of authority from Congress."
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