HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association

HOW EXPANSIVE SHOULD THE DEFINITION OF “EXTENSION” BE INTERPRETED IN CONSIDERATION OF ITS BROADER STATUTORY CONTEXT?

Petitioners HollyFrontier Cheyenne Refining, LLC, HollyFrontier Refining & Marketing, LLC, HollyFrontier Woods Cross Refining, LLC, and Wynnewood Refining Co., LLC (collectively “Cheyenne”) argue that based on the ordinary meaning of the term “extension,” there is no reason to prefer the Tenth Circuit’s definition to mean “an increase in length of time,” thereby creating a continuity requirement for exemptions, over extension’s alternative meaning of “to offer or make available,” which would not create a continuity requirement. Brief for Petitioners, Cheyenne at 23. Cheyenne asserts that in addition to being a commonplace understanding of the word, a myriad of legislation (e.g., the “Judicial Redress Act of 2015”) and caselaw (Barr v. American Association of Political Consultants, Inc.) support the latter definition. Id. at 24.

Cheyenne also contends that where competing definitions for a disputed phrase exist, the Court must consider its broader statutory context. Id. at 25–26. For example, Cheyenne maintains that the definition of “extension” used in 42 U.S.C. § 7545(o)(9)(A)(ii)(II) refers to temporal continuity, a fact that can only be ascertained by considering its broader context. Id. at 26. But, Cheyenne maintains, the fact that “extension” means continuity earlier in the statute does not compel the same definition in subparagraph (B)(i), the relevant subsection here, because in the latter’s context, the meaning does not clearly refer to temporal continuity. Id. at 26–27. Cheyenne further claims the Tenth Circuit erroneously believed that applying multiple definitions of “exten[sion]” would “strip” the phrase of “significant meaning.” Id. at 28. Cheyenne asserts that even if Congress had intended for extension to be defined in its temporal sense, the Tenth Circuit wrongly read a continuity requirement into “extension”. Id. at 29–30. Cheyenne contends that no dictionary definition supports the Tenth Circuit’s definition of “extension;” moreover, courts routinely grant non-temporal extensions, such as periodically making non-continuous exemptions for amicus filings, suggesting it is perfectly permissible to define “extension” as having a non-temporal requirement. Id. Accordingly, Cheyenne concludes the exemption applies even to small refineries which have not received continuous, uninterrupted exemptions within a designated time period. Id. at 49–50.

Respondents Renewable Fuels Association et al. (“RFA”) argue that Cheyenne incorrectly asserts that “extension” effectively means “grant” because such a reading would result in inconsistent definitions of “extension” throughout the text of the statute. Brief for Respondents, Renewable Fuels Association et al. at 23, 39. RFA contends that the relevant statute already used the temporal definition in an earlier subsection, § 7545(o)(9)(A), so it is illogical to insist that Congress would employ multiple definitions of a phrase in the same statutory text. Id. at 39. RFA also argues that applying Cheyenne’s interpretive strategy ignores the plain text of the statute as well as the commonly held dictionary definition of extension. Id. at 20, 30. Similarly, Growth Energy and American Farm Bureau Federation (“Growth Energy”) adds that the broader context of the statute colors “extension” with Cheyenne’s “cherrypicked” definition because subparagraph (B)(iii) shows that refineries petition for “a free-standing exemption,” which cannot be reconciled with subparagraph (B)’s statement that the petition is for “an extension of the exemption under subparagraph (A).” See Brief of Amicus Curiae Growth Energy and American Farm Bureau Federation, in Support of Respondents at 13, 16. Because Petitioners acknowledge that subparagraph (A) employs the temporal meaning of “extension,” Growth Energy states that the same meaning would be logically imported to subparagraph (B) based on the language of the statute itself. Id. Lastly, RFA claims that even if Cheyenne’s interpretation of “extension” is correct, it does not comport with the standard practices of the oil refinery industry to incentivize small refineries to meet their RFS obligations. Brief for Respondents at 41. Anything other than a temporal reading of the term “extension,” RFA concludes, would allow small refineries to avoid their RFS obligations when the burden became too difficult, thus declawing the statute of practical effect. Id.

SHOULD THE EPA BE GIVEN SPECIAL DEFERENCE FOR ITS INTERPRETATION OF THE HARDSHIP EXEMPTION?

Cheyenne contends that the longstanding precedent established in Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc. requires courts to give deferential treatment to the interpretations of administrative agencies tasked with implementing legislation; a procedure also known as Chevron deference. Brief for Petitioners at 46. Cheyenne asserts that Congress granted the EPA authority to resolve ambiguities in the RFS, and since the EPA resolved the ambiguity pursuant to that authority in its 2014 eligibility rule, their interpretation deserves deference. Id. Cheyenne asserts that, in 2014, the EPA drafted two versions of a new rule. Id. at 46. Cheyenne argues the original version, later rejected, mandated a continuity requirement for RFS eligibility based on one commentator’s opinion that Congress did not want refineries cycling in and out of the eligibility rule. Id. at 47. Cheyenne adds, however, that this version of the rule was replaced by a final version in which the EPA rejected the continuity requirement because “it could unfairly disqualify a refinery from eligibility for small refinery relief based only on a single year’s production.” Id. at 47. In the updated version, Cheyenne notes a refinery only needs to show that it satisfied the requirement the year in which the exemption was sought. Id. at 47. Therefore, Cheyenne concludes, under the EPA’s interpretation that should receive deference, the Tenth Circuit incorrectly defined “extension.” Id. at 48.

RFA counters that courts should not afford the EPA’s expansive definition “Chevron deference.” See Brief for Respondents at 53. First, RFA argues that Cheyenne did not raise this argument in their certiorari petition and therefore, under Supreme Court precedent that declines to apply Chevron deference when the government fails to raise it, effectively waived this claim. See id. at 54. However, RFA asserts that even if the Supreme Court reaches the Chevron deference question, the claim has no merit because an agency determination only receives deference where Congress has formally delegated interpretative authority to the agency and the agency’s interpretation fell within the authority Congress granted to it. Id. at 55. RFA asserts that the EPA did not implement the interpretation through its formal rulemaking authority, but rather did so through informal adjudications that do not receive Chevron deference. Id. at 55–56. Further, RFA argues that there is scant evidence of even informal adjudications to reinforce Cheyenne’s claim that courts should give deference to the EPA to use a broader definition of “extension.” See id. at 55–56. RFA further contends that when the exemption rule went into effect and replaced the original “blanket” exemption, it only applied to refineries that had been continuously exempt. Id.

DOES THE EPA’S RECENT HISTORY FAVOR EITHER A BROADER OR NARROWER APPROACH?

Cheyenne argues that a holistic assessment of recent EPA trends provides ample reason to apply the broader understanding of “extension.” See Brief for Petitioners at 45–47. Cheyenne states that since 2016, the EPA has adopted the more expansive, non-continuous definition of “extension” after having previously relied on “an unduly restrictive test” that caused significant economic hardship for small refineries. Id. at 39. Cheyenne maintains that in following the more restrictive rule, the Tenth Circuit risks backsliding into the antiquated rule that overlooks the EPA’s valid reasons for abandoning it in favor of the broader definition. Id. at 39. Moreover, Cheyenne contends that it ignores Congress’ original purpose in enacting statute, which was to stimulate the production of domestic fuel, not create a blind mandate that would have the practical effect of barring new small refineries from entering the market. See Id. at 42–44.

RFA contests that in light of the existing regulatory provisions in place as well as the unambiguous language of both Congress and the law itself, there is little reason to believe the Tenth Circuit owed the EPA special deference for its past interpretations. See Brief for Respondents at 53–54. RFA cites a point of controversy from 2014, when a newly enacted eligibility rule threatened to exclude smaller refineries from the exemption because they did not qualify under the older rule. See id. But RFA maintains that the 2014 eligibility rule imposed a continuity requirement upon small refineries which qualified for the hardship exemption from that date forward, even though some had not qualified prior to the rule’s enactment. Id. at 39–41.