USCA11 Case: 21-14213 Document: 73-1 Date Filed: 04/13/2023 Page: 1 of 14
[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-14213
____________________
RMS OF GEORGIA, LLC,
d.b.a. Choice Refrigerants,
Petitioner,
versus
U.S. ENVIRONMENTAL PROTECTION AGENCY,
ADMINISTRATOR, U.S. ENVIRONMENTAL PROTECTION
AGENCY,
Respondents.
____________________
Petition for Review of a Decision of the
Environmental Protection Agency
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2 Opinion of the Court 21-14213
Agency No. EPA-2021-21942-55841
____________________
Before WILSON, BRASHER, and MARCUS, Circuit Judges.
WILSON, Circuit Judge:
Congress gave the Courts of Appeals jurisdiction to hear pe-
titions for review of Environmental Protection Agency (EPA) ac-
tions under the Clean Air Act.
42 U.S.C. § 7607(b)(1). But it man-
dated that petitions for review of “nationally applicable” actions be
heard in the Court of Appeals for the District of Columbia Circuit
(D.C. Circuit), while petitions for review of “locally or regionally
applicable” actions should be heard in the regional circuit Courts
of Appeals.
Id. Our task today is to determine which type of action
this petition challenges.
Petitioner RMS of Georgia d/b/a Choice Refrigerants
(RMS) challenges the EPA’s allocation of permits to consume hy-
drofluorocarbons—a type of chemical refrigerant—under the
American Innovation and Manufacturing Act.
Pub. L. No. 116-260,
Div. S., § 103,
134 Stat. 1182, 2255–71 (2020) (codified at
42 U.S.C.
§ 7675). RMS argues that it received fewer permits than it was en-
titled because the EPA improperly allocated some historic HFC us-
age to RMS’s competitors. However, because we hold that the
EPA’s action, was nationally applicable we TRANSFER this peti-
tion to the D.C. Circuit for further consideration.
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21-14213 Opinion of the Court 3
I.
The United States has been a site of rapid innovation in the
field of refrigeration technology since the mid-nineteenth century.
In the 1840s, Dr. John Gorrie of Apalachicola, Florida invented one
of the world’s first mechanical refrigeration systems to soothe his
patients’ malaria-induced fevers in the Florida panhandle. By the
early 1900s Carrier Engineering of New York was installing similar
mechanical refrigeration systems to cool enormous auditoriums
and theaters. While these early machines relied on water and com-
pressed air, these systems gave way to those relying on volatile and
toxic chemicals such as ammonia. But in 1928, Thomas Midgley
Jr. at the General Motors Corporation, successfully synthesized the
first formulations of chlorofluorocarbon (CFC)-based refrigerants,
commonly known as “Freon.” These chemicals were safer and less
combustible than their predecessors, and soon dominated the mar-
ketplace. 1
With this rapid innovation came calls for increased national
and international oversight. In 1974, F. Sherwood Rowland and
Mario Molina at the University of California, Irvine proved that the
emission of CFCs depleted the Earth’s ozone layer, exposing the
1 See generally Paul Lester, U.S. Dep’t of Energy, History of Air Conditioning
(July 20, 2015), https://www.energy.gov/articles/history-air-conditioning;
James W. Elkins, Nat’l Oceanic & Atmospheric Admin., Chlorofluorocarbons
(CFCs), https://gml.noaa.gov/hats/publictn/elkins/cfcs.html (last visited
Mar. 29, 2023).
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4 Opinion of the Court 21-14213
Earth’s surface to harmful UV radiation. So in 1987, the United
States, together with the international community, signed the
Montreal Protocol, which mandated the gradual phaseout of CFCs.
As CFCs were phased out, a new class of chemicals called hydro-
fluorocarbons (HFCs) took their place. HFCs, unlike CFCs, do not
contribute significantly to ozone layer depletion, making them a
suitable substitute under the Montreal Protocol. But, while the
substitution of HFCs protects the ozone layer, it greatly contrib-
utes to the risks of climate change as HFCs are a potent greenhouse
gas. So just as they had decades prior for CFCs, the United States
and the international community began considering a phaseout of
HFCs as well. In 2016, they agreed to the Kigali Amendment to
the Montreal Protocol which requires states parties to the Protocol
to phasedown HFC usage over the next thirty years. 2
While the Kigali Amendment was under consideration, the
United States Congress took steps in 2020 to address domestic HFC
usage by passing the American Innovation and Manufacturing Act
(AIM Act),
42 U.S.C. § 7675. The AIM Act directs the EPA to phase
down the consumption and production of HFCs in the United
States over the next fifteen years until 2036. In 2036, the Act re-
quires that HFC usage in the United States be capped at 15% of
2 U.S. Env’t Prot. Agency, Recent International Developments under the
Montreal Protocol (last updated Sept. 16, 2022),
https://www.epa.gov/ozone-layer-protection/recent-international-develop-
ments-under-montreal-protocol.
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21-14213 Opinion of the Court 5
baseline levels. See
42 U.S.C. § 7675(e)(2)(C). To implement the
phasedown, Congress provided that certain consumption and pro-
duction activities would require “allowances”—essentially, usage
permits—and placed a cap on the number of permits available each
year. See
id. §§ 7675(e)(2)(A), (e)(2)(D); see also id. § 7675(b)(2), (3),
(7) (defining “allowance,” “consumption,” and “produce,” respec-
tively). Over time the cap diminishes by a fixed percentage pro-
vided in the Act each year. Id. § 7675(e)(2)(B). The Act also allows
the firms that receive permits to transfer their permits between one
another pursuant to regulations promulgated by the EPA. Id.
§ 7675(g). The Act directs the EPA to conduct appropriate rule-
makings to establish “an allowance allocation and trading pro-
gram” consistent with these requirements. Id. § 7675(e)(3).
This petition concerns the permit allocations made for cal-
endar year 2022, which were issued in October 2021. There are
two Federal Register notices relevant to this petition. The first was
a notice of final rulemaking for what is called the “Framework
Rule,” which sets forth the EPA’s methodology for collecting data
on historical HFC usage and a formula for calculating the allocation
of permits. Phasedown of Hydrofluorocarbons: Establishing the
Allowance Allocation and Trading Program Under the American
Innovation and Manufacturing Act,
86 Fed. Reg. 55,116 (Oct. 5,
2021) (codified at
40 C.F.R. § 84.1–84.35) [hereinafter Framework
Rule]. The second was an “Allocation Notice,” which set forth the
annual allocations in a series of tables line-by-line, firm-by-firm.
Phasedown of Hydrofluorocarbons: Notice of 2022 Allowance
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6 Opinion of the Court 21-14213
Allocations for Production and Consumption of Regulated Sub-
stances under the American Innovation and Manufacturing Act of
2020,
86 Fed. Reg. 55,841 (Oct. 7, 2021) [hereinafter Allocation No-
tice].
At a high level, the Framework Rule’s methodology worked
like this: First, the EPA collected HFC-usage data for the compa-
nies involved in the domestic HFC industry. Second, the EPA used
this industry-wide data to calculate the baseline levels of domestic
HFC-usage. Third, the agency calculated the annual nationwide
allowance cap by multiplying the baseline level by a target percent-
age specified by statute. See
42 U.S.C. § 7675(e)(1)(A)–(C),
(e)(2)(B). At this step, some allowances are removed from the pool
and set aside for application-specific allowances and for allocation
later in the year.
40 C.F.R. § 84.11(a)(3). Fourth, the EPA identified
each industry participant’s three highest years of usage for the pe-
riod 2011–2019 and found the average of these numbers.
Id.
§ 84.11(a)(1). Fifth, the EPA determined each firm’s percentage
share of the industry by taking that firm’s individual three-year av-
erage (step 4) and dividing it by the sum of all firms’ three-year av-
erage numbers. Id. § 84.11(a)(2). 3 Sixth, the EPA multiplied each
participant’s percentage by the annual allowance cap (step 3) to de-
termine each firm’s allocation of yearly allowances. Id.
§ 84.11(a)(4).
3 Forty firms received consumption allowances in 2022.
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21-14213 Opinion of the Court 7
In this case, Petitioner-RMS, a Georgia-based manufacturer
of an HFC blend called R-421A, or “Choice,” challenges its alloca-
tion of HFC consumption allowances for calendar year 2022. 4 On
the merits, RMS brings an arbitrary and capricious challenge alleg-
ing that two other entities—here, named Companies A and B—re-
ceived credit for historical usage that should have been credited to
RMS. Specifically, RMS alleges that Company A was merely its
shipping agent for certain HFCs, and that RMS should qualify as
the “importer” entitled to credit for this historical usage under the
regulations. See
40 C.F.R. § 84.3. As to Company B, RMS alleges
that Company B infringed its patent on R-421A, and thus RMS
should receive credit for the usage attributable to that infringe-
ment. While the merits of these arguments turn on different legal
principles, they have the same practical effect for RMS: Because
the EPA allegedly short-changed RMS in these instances, RMS’s
three-year average (step 4) was lower than it should have been.
* * *
To aid our discussion, we provide a visual representation of
this critical step in the EPA’s methodology:
Figure 1
RMS Three-Year Avg.
RMS Three-Year Avg.+ Firm 2 Three-Year Avg.+. . .+ Firm 40Three-Year Avg.
4 RMS does not challenge the Framework Rule itself in this petition.
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8 Opinion of the Court 21-14213
In essence, RMS argues that the “RMS Three-Year Avg.” term was
too small due to the EPA’s arbitrary and capricious actions with
respect to Companies A and B, and therefore, the output of this
formula was smaller than it should have been. Because the output
of this formula represents RMS’s percentage share of the total per-
mit allocation if this number was too small, then it also means RMS
received fewer allowances than it should have in step 6.
II.
The AIM Act adopts the judicial review provision of the
Clean Air Act,
42 U.S.C. § 7607, and makes it applicable “as though
[the AIM Act] were expressly included in title VI of [the Clean Air]
Act.”
42 U.S.C. § 7675(k)(1)(C). Section 7607(b)(1) provides that
challenges to “nationally applicable” actions “may be filed only in”
the D.C. Circuit, while challenges to “locally or regionally applica-
ble” actions “may be filed only” in the regional Courts of Appeals. 5
A petition for review of a locally or regionally applicable action
may be heard only in the D.C. Circuit if the EPA Administrator first
makes and publishes a finding that the action has a “nationwide
scope or effect.”
Id. Because the EPA made no such finding, our
5 We do not consider today whether § 7607 is a jurisdictional or venue provi-
sion. By its text, the “may be filed only” phrasing makes this forum provision
mandatory, leaving us no discretion. The EPA asks that we enforce the pro-
vision, and that is enough for our purposes today. The nuances of the distinc-
tion between jurisdictional and venue provisions are not relevant to the dis-
position of this petition, and so we reserve that question for a later day.
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21-14213 Opinion of the Court 9
decision today turns entirely on whether the EPA’s action is “na-
tionally” or “locally or regionally” applicable.
Whether a petition under the Clean Air Act is “nationally
applicable” is an issue of first impression for this court. That said,
we do not write on an entirely blank slate—our sister circuits have
established a consensus that we should begin our analysis by ana-
lyzing the nature of the EPA’s action, not the specifics of the peti-
tioner’s grievance. See, e.g., ATK Launch Sys., Inc. v. EPA,
651
F.3d 1194, 1199 (10th Cir. 2011) (“The nature of the regulation, not
the challenge, controls.”); Am. Road & Transp. Builders Ass’n v.
EPA,
705 F.3d 453, 456 (D.C. Cir. 2013) (“[I]n determining that [an
action] is a ‘locally or regionally applicable’ action, this Court need
look only to the face of the rulemaking, rather than to its practical
effects.”); S. Ill. Power Coop. v. EPA,
863 F.3d 666, 670 (7th Cir.
2017) (“Under the straightforward (if wordy) statutory text, venue
depends entirely on—and is fixed by—the nature of the agency's
action . . . .”).
Our own review of § 7607(b)(1)’s text leads us to the same
conclusion. The text makes no reference to the nature of the peti-
tion. Instead, it reads, “[a] petition for review of action of the Ad-
ministrator [under specified sections], or any other nationally ap-
plicable regulations promulgated, or final action taken . . . may be
filed only in the [D.C. Circuit].” 42 U.S.C § 7607(b)(1). As the Sev-
enth Circuit put it, the text is “wordy,” but clear. S. Ill. Power
Coop.,
863 F.3d at 670. The phrase “nationally applicable”
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10 Opinion of the Court 21-14213
describes the “regulations promulgated, or final action taken,” not
the nature of the “petition for review.”
With this in mind, we look to the face of the challenged EPA
action, and RMS designated the Allocation Notice in its petition as
the challenged action. The Allocation Notice is three pages long
and, except for a brief introduction, consists entirely of three tables
listing each firm’s permit allocation for calendar year 2022. Alloca-
tion Notice, 86 Fed. Reg. at 55,841–43. Table 1 addresses alloca-
tions set aside for specific uses required by
42 U.S.C.
§ 7675(e)(4)(B)(iv). 86 Fed. Reg. at 55,842 tbl.1. Table 2 addresses
the allocation of production allowances. Id. at tbl.2. Finally, and
relevant here, table 3 addresses consumption allowances. Id. at
55,843 tbl.3. Table 3 has forty-two line-item entries; forty of these
are company names followed by their calculated consumption al-
location for the year. Id. 6 RMS appears on the list under the entry
for “RMS of Georgia,” and it received 1,615,592.9 allowances for
2022.
We conclude that the Allocation Notice was nationally ap-
plicable. First, as a textual matter, nothing in it limits the scope of
the EPA’s action based on geography. Indeed, the Allocation No-
tice assigns allowances to firms nationwide. Second, the
6 The two other entries account for the application-specific allocations re-
ferred to in table 1 and permits set-aside for allocation later in the year. See
Framework Rule, 86 Fed. Reg. at 55,155 (describing the purpose of set-aside
permits).
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allowances themselves are not geographically restricted. See
42
U.S.C. § 7675(e)(2)(D)(ii) (describing the “[n]ature of allowances”).
If RMS decided to do so, it could relocate its facilities anywhere else
in the country and utilize its permits elsewhere. The permits were
allocated on a firm-specific basis, not a site-specific basis.
RMS advances two theories for why the Allocation Notice is
locally applicable, but neither is persuasive. First, RMS argues that
the EPA’s allocation of permits to it is based on local factors rele-
vant only to its facility in Alpharetta, Georgia. RMS relies on the
Seventh Circuit’s decision in Madison Gas & Electric Co. v. EPA,
which addressed a similar allowance trading regime under the
EPA’s acid rain program. See
4 F.3d 529, 530 (7th Cir. 1993), over-
ruled by S. Ill. Power Coop.,
863 F.3d at 668 & n.1. There, the
Seventh Circuit concluded that it was the proper forum—despite
permits being allocated to firms nationwide, in a single table and in
a single notice—because “the challenge is based upon an entirely
local factor . . . .” Id. at 531 (emphasis added). First, Madison Gas
is of dubious persuasiveness because it has been overruled in its
own circuit. Second, as explained above, we have rejected for our-
selves the petition centric approach it advocates. Third, the argu-
ment fails on its own terms as RMS’s allocation of permits is not
“based upon an entirely local factor.” The Allocation Notice, by its
terms, is an implementation of the EPA’s separately promulgated
Framework Rule, and allowances are made consistent with it. Al-
location Notice, 86 Fed. Reg. at 55,841. The formula described in
the Framework Rule does not base each firm’s allowance on
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12 Opinion of the Court 21-14213
entirely firm-specific factors. Recall our representation of the cal-
culation of RMS’s share of the allowance pool:
Figure 1
RMS Three-Year Avg.
RMS Three-Year Avg.+ Firm 2 Three-Year Avg.+. . .+ Firm 40Three-Year Avg.
As part of its methodology, the EPA identified RMS’s three
highest years of HFC usage between 2011 and 2019 and averaged
them together; this is the “RMS Three-Year Avg.” term. The local fac-
tors RMS identifies are essentially its disputes with Companies A
and B, and RMS’s own historic usage of HFCs. The EPA’s resolu-
tion of these factual disputes, RMS argues, resulted in its three-year
average, represented as “RMS Three-Year Avg.,” being improperly low
and thus its share of the allowance pool being improperly low as
well. But while the “RMS Three-Year Avg.” term appears by itself in the
numerator of this formula, it is combined with the thirty-nine other
HFC industry firms in the denominator. Thus, RMS’s allocation is
not based on its own “entirely local” historical HFC usage but is
instead relative to and based on every single other firm’s historical
usage.
RMS’s second argument has a similar theme. It argues that
the Allocation Notice is not one big action but instead a document
detailing many smaller individual actions. Viewed this way, RMS
argues that it is challenging only its line-item in table 3, not table 3
as a whole or the other firm’s allocations. But this argument pre-
sents too narrow a view of the EPA’s final action. Rather, the
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21-14213 Opinion of the Court 13
Allocation Notice is better understood as one EPA action, and
RMS’s allocation an inseparable component of it. By placing a cap
on allowances, Congress created a kind of “zero-sum” game for the
HFC industry. Any gain in permits that one firm gets must be off-
set by a loss to another firm and vice versa. The Framework Rule’s
methodology bears this out. Recall again the formula in figure 1.
While our version features RMS, each firm in table 3 is also subject
to the same formula—just with its own three-year average in the
numerator in place of RMS’s. Of course, any shift in one firm’s
three-year average will change the output of that firm’s formula.
But it will also change every other firm’s formula as well. This is
because each firm’s three-year average term appears not just in the
numerator, but in the denominator as well and the denominator is
shared across firms nationwide. Any shift in any single firm’s three-
year average demands a recalculation of the shared denominator
and thus the formulas for every single firm listed in table 3. The
EPA’s Allocation Notice in table 3 is thus the result of a singular
EPA action allocating HFC allowances nationwide, and RMS can-
not isolate its individual component of it.
We conclude that because the Allocation Notice allocated
permits nationwide and was not restricted in geographic scope it
was nationally applicable. Accordingly, RMS’s challenge to its
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allocation, as an inseparable component of that action, must be
heard in the D.C. Circuit. See
42 U.S.C. § 7607(b)(1). 7
III.
All that is left for us to do is to transfer this case to the D.C.
Circuit. Because Congress vested that court, and not this court,
with the authority to hear this petition we think the D.C. Circuit is
better suited to rule on the pending motion to intervene made by
FluoroFusion, Inc, and so, we leave that motion pending and trans-
fer it as well.
Accordingly, the Clerk is directed to TRANSFER this peti-
tion, with the pending motion to intervene, to the United States
Court of Appeals for the District of Columbia Circuit.
PETITION TRANSFERRED.
7 By utilizing the Clean Air Act’s judicial review provision for the AIM Act, it
is reasonable to assume Congress would not have intended every challenge to
AIM Act agency actions be heard in the D.C. Circuit and our decision is not in
conflict with this principle. The EPA’s regulations authorize it to take firm
specific actions to “retire, revoke, or withhold the allocation of allowances” to
firms that violate the EPA’s regulations. See
40 C.F.R. § 84.35(a); see also
Framework Rule, 86 Fed. Reg. at 55,168–72 (discussing EPA’s enforcement
authority). At oral argument, EPA’s counsel suggested that it could “retire,
revoke, or withhold” allowances to a firm that failed to maintain “documen-
tation of . . . final payment of the antidumping” duties on HFC imports, as re-
quired by
40 C.F.R. § 84.31(c)(2)(xix), and such an action might be considered
“locally” applicable as it modifies only one firm’s allocations. As we have dis-
cussed though, the EPA’s action here did not act on the individual firm level
and instead distributed permits to multiple firms, nationwide.
