Judge in HFCs case nominated for U.S. Supreme Court

By Michael Garry, Jul 10, 2018, 15:09 3 minute reading

Brett Kavanaugh ruled that EPA can’t force replacement of HFCs, creating uncertainty in HVAC&R industry.

U.S. Supreme Court

Brett M. Kavanaugh, the U.S. Court of Appeals judge who ruled against the Environmental Protection Agency in the controversial Mexichem Fluor v. EPA case, was nominated yesterday by President Trump to serve on the U.S. Supreme Court.

The nomination – heralded by conservatives – now goes before the U.S. Senate, where a politically charged confirmation battle is expected in the coming months.

In August 2017, Kavanaugh was part of a three-judge panel in the U.S. Court of Appeals for the District of Columbia Circuit that ruled 2-1 in Mexichem Fluor, Inc. v. EPA. that the EPA cannot require companies to replace HFCs used as an alternative to ozone-depleting refrigerants with low-GWP substances (such as natural refrigerants and HFOs) under the SNAP (Significant New Alternatives Policy) program.

The ruling specifically vacated an EPA rule released in 2015 "to the extent that it requires manufacturers to replace HFCs with a substitute substance,” said Kavanaugh, who wrote the majority opinion. This “partial vacatur” allows the EPA to classify HFCs as unacceptable for systems that still use ozone-depleting gases.

The two plaintiffs in the case were foreign manufacturers of HFCs: Mexican company Mexichem Fluor and French company Arkema SA. The Trump administration, along with intervenors (the National Resources Defense Council and HFO manufacturers Chemours and Honeywell) defended the EPA in oral arguments.

The ruling precipitated a period of uncertainty in the HVAC&R industry about the future of HFC regulation in the U.S. Several avenues for regulating HFCs still exist, including ratification of the Kigali Amendment to the Montreal Protocol by the U.S. Senate.

Last month Honeywell and Chemours jointly petitioned the U.S. Supreme Court to reverse the ruling in Mexichem Fluor v. EPA; the Natural Resources Defense Council (NRDC) separately filed the same petition. The EPA did not contest the ruling; instead the agency issued a notification of guidance that completely overturned the 2015 EPA rule (triggering lawsuit by the NRDC and others) and initiated a new rule-making process to review how to handle HFC listings under SNAP.

However much we might sympathize or agree with EPA's policy objectives, EPA may act only within the boundaries of its statutory authority."
– Judge Brett Kavanaugh, Supreme Court nominee

In the Mexichem case, Kavanaugh, a George W. Bush appointee, took issue with the EPA's regulatory power over HFCs. "However much we might sympathize or agree with EPA's policy objectives, EPA may act only within the boundaries of its statutory authority,” he wrote in the August 2017 ruling. “Here, EPA exceeded that authority."

Kavanaugh took particular issue with the EPA's interpretation of the word "replace" in the SNAP program, and said that by using it to list more alternatives, the federal agency had gone "beyond its ordinary meaning" in a manner that "borders on the absurd.”

"Under EPA's current interpretation of the word 'replace', manufacturers would continue to 'replace' an ozone-depleting substance [ODS] with a substitute even 100 years or more from now," Kavanaugh wrote. "EPA would thereby have indefinite authority to regulate a manufacturer's use of that substitute."

Judge Robert Wilkins, an Obama appointee who dissented in part, wrote that he believes the word "replace" under the SNAP program does not just relate to ODS. Wilkins said the court should have deferred to the EPA in this case, because the position of Congress on the SNAP program is unclear and the EPA has made “reasonable” rules in this matter.

Kavanaugh has been involved in other EPA rulings, typically taking a conservative stand on the agency’s regulatory powers. In 2015, E&E News described Kavanaugh “as one of the most powerful critics of President Obama's environmental rules.”

Given Kavanaugh's "track record in these important cases over the last few years, I would think him a judge that is more open to second-guessing the EPA than nearly anyone," said Tom Donnelly, counsel at the left-leaning Constitutional Accountability Center, according to E&E News.

By Michael Garry

Jul 10, 2018, 15:09

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