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OPINION | Another day in bureaucratic hell

MODERN bureaucratic government can sometimes be difficult to navigate. But this summer a federal appeals court in Washington, D.C., issued a ruling on the administrative state that would make Kafka smile.

The story begins in 2007 when Congress expanded the renewable fuel standard. The law set targets for how much ethanol and biodiesel must be blended into America’s fuel supply. In typical dereliction of legislative duty, Congress delegated much of the implementation to the Environmental Protection Agency. As one stipulation, the EPA was told to perform “periodic reviews” of the law’s results, including “the impacts of the requirements described in subsection (a)(2).”

First problem: There is no subsection (a)(2). This provision does not exist.

Second problem: For years the EPA never performed any formal periodic review, at least not identified as such.

In 2017 Valero Energy filed a lawsuit. As an owner of refineries, Valero is required to either blend renewables into its products or buy compliance credits called RINs. Each year refiners spend hundreds of millions of dollars on these credits. Valero would naturally be upset at the EPA’s failure to review how the renewable plan was working, as the law seemed to require. So the company asked the judiciary to step in.

A district court in Texas sided with the EPA. Since the law specified only “periodic” review, without dictating a timetable, the court ruled that the EPA could do it, essentially, whenever. The agency “has a duty to conduct these reviews,” the judge wrote, “but discretion to determine when and how often.” To steal an old Conan O’Brien gag, maybe the EPA would get around to it in the year 3000.

Or never. Shortly after that ruling, the EPA released an interpretive document laying out its position. The legal mandate to review the renewable program, the EPA said, was satisfied by its regular process of making rules and evaluating waivers. Further, because the law’s review clause cites a nonexistent subsection (a)(2), the EPA viewed that part of the text as “unintelligible and inoperative.”

Valero argued the bad citation was, rather, a correctable scrivener’s error. The company said Congress clearly meant to refer to nearby language, subsection (2)(B), which details the blending requirements. In other words, Valero believed the EPA was dodging its legal duty to periodically evaluate the program’s negative effects on refiners.

The company sought help from the D.C. Circuit Court of Appeals. No dice. On June 25 the court dismissed the case for lack of jurisdiction. The EPA’s interpretive document could not be reviewed, wrote Judge Sri Srinivasan, because it “does not constitute final agency action.” He cited a two-part test. First, a “final” action can’t be “merely tentative or interlocutory.” Second, it must result in legal consequences or determine some party’s rights or obligations.

The EPA’s document “imposes no obligations, prohibitions, or restrictions,” he wrote. “Nor does it affect EPA’s legal obligation to conduct periodic reviews. Rather, it leaves the world just as it found it.” As a technical matter of law, this may be correct and simply another lovely day in the administrative state.

But for Valero, this is a saga of bureaucratic hell. Congress writes a law, giving power to the EPA. Sloppy drafting creates a citation to nowhere. The EPA fails to conduct a formal review and then, after being sued, claims it did so all along. When the regulated company cries foul, it’s told that “periodic” merely means “not never.” Then the EPA’s avowal of its own compliance is deemed unreviewable.

This is what democracy looks like?