Louisiana v. U.S. Dep't of Energy

90 F.4th 461

State of LOUISIANA; State of Alabama; State of Arkansas;State of Kentucky; State of Missouri; State of Montana;State of Oklahoma; State of South Carolina;State of Tennessee; State of Texas; State of Utah, Petitioners, v. UNITED STATES DEPARTMENT OF ENERGY;Jennifer Granholm, Secretary, U.S. Department of Energy, Respondents.

No. 22-60146

United States Court of Appeals, Fifth Circuit

FILED January 8, 2024

On Petition for Review of an Order of the Department of Energy Agency No. EERE-2021-BT-STD-0002 87 Fed. Reg. 2673 (Jan. 19, 2022)

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, Elisabeth Daigle, Louisiana Department of Justice, Office of the Solicitor General, Federalism Division, Baton Rouge, LA, Elizabeth Baker Murrill, Esq., Assistant Attorney General, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, for Petitioner State of Louisiana.

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, Edmund Gerard LaCour, Jr., Office of the Attorney General for the State of Alabama, Montgomery, AL, for Petitioner State of Alabama

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General

for the State of Louisiana, Baton Rouge, LA, for Petitioner State of Arkansas.

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, Matthew F. Kuhn, Office of the Attorney General, Office of the Solicitor General, Frankfort, KY, for Petitioner State of Kentucky.

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, for Petitioners State of Missouri, State of Montana, State of Oklahoma, State of Tennessee.

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, Thomas T. Hydrick, Office of the Attorney General for the State of South Carolina, Columbia, SC, for Petitioner State of South Carolina.

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, Lanora Christine Pettit, Office of the Texas Attorney General, Solicitor General Division, Austin, TX, for Petitioner State of Texas.

Drew C. Ensign, Deputy Solicitor General, Holtzman Vogel Baran Torchinsky & Josefiak, P.L.L.C., Phoenix, AZ, Morgan Brungard, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, Melissa A. Holyoak, Senior Counsel, Office of the Attorney General for the State of Utah, Salt Lake City, UT, for Petitioner State of Utah.

Amanda Mundell, U.S. Department of Justice, Civil Division, Washington, DC, Kathryn McIntosh, U.S. Department of Energy, Office of General Counsel, Washington, DC, for Respondents.

Charles Devin Watkins, Competitive Enterprise Institute, Center for Class Action Fairness, Washington, DC, for Amici Curiae Competitive Enterprise Institute, FreedomWorks Foundation

Keith Bradley, ScheLeese Goudy, Squire Patton Boggs, L.L.P., Denver, CO, for Amicus Curiae Alliance for Water Efficiency.

Before Clement, Oldham, and Wilson, Circuit Judges.

Andrew S. Oldham, Circuit Judge:

In 2022, the Department of Energy tightened the regulatory regime surrounding America's dishwashers and laundry machines. Petitioners sued. The Department's actions were arbitrary and capricious. So we grant the petition and remand to the Department.

I.

In 2018, the Competitive Enterprise Institute ("CEI") submitted a petition for rulemaking to the Department of Energy ("DOE" or the "Department"). See 5 U.S.C. § 553(e) ("Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule."); see also Petition for Rulemaking on a New Product Class of Fast Dishwashers, 83 Fed. Reg. 17771 (Mar. 21, 2018) ("CEI Petition"). According to CEI, the Department's burdensome energy regulations made dishwashers incapable of, well, washing dishes. CEI asked the Department to define a new class of dishwashers under the Energy Policy and Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871, codified (as amended) at 42 U.S.C. §§ 6201 et seq. ("EPCA"). CEI proposed that the new class should be comprised of dishwashers with a normal cycle duration of under one hour. See 42 U.S.C. § 6295(a)(2) (empowering the DOE to define new classes of regulated appliances). CEI anticipated that the new class might offer better performance than currently available machines in part because it would not need to comply with the energy and water restrictions otherwise applicable to consumer dishwashers today. See CEI Petition, 83 Fed. Reg. at 17776.

DOE responded favorably to CEI's petition. It published a Notice of Proposed Rulemaking ("NPRM") under the Administrative Procedure Act ("APA"). See NPRM, 84 Fed. Reg. 33869 (July 16, 2019). The NPRM proposed the new dishwasher class that CEI had requested. See ibid. In October 2020, the DOE adopted a final rule defining the class as "standard residential dishwashers with a cycle time for the normal cycle of one hour or less from washing through drying." See Establishment of a New Product Class for Residential Dishwashers, 85 Fed. Reg. 68723 (Oct. 30, 2020) (the "2020 Dishwasher Rule").

On its own initiative, the Department then decided to take analogous action on laundry machines. See Notice of Proposed Rulemaking, 85 Fed. Reg. 49297 (Aug. 13, 2020) ("2020 Laundry NPRM"). DOE in December 2020 released a final rule creating new classes of "top-loading consumer [i.e., residential] clothes washers and consumer clothes dryers" with a "normal cycle time of less than 30 minutes." See Establishment of New Product Classes for Residential Clothes Washers and Consumer Clothes Dryers, 85 Fed. Reg. 81359 (Dec. 16, 2020) (the "2020 Laundry Rule"). DOE also created a class of "front-loading" residential washers with a normal cycle under 45 minutes. Id. at 81359-60. DOE explained that both of its 2020 rules "re-affirmed the Department's recognition of cycle time as a valuable consumer utility." Id. at 81361.

On the day of his inauguration, President Biden issued an Executive Order directing DOE and other agencies to reconsider certain rules, including the 2020 Dishwasher Rule and the 2020 Laundry Rule. See Exec. Order No. 13,990, 86 Fed. Reg. 7037 (Jan. 20, 2021); see also Fact Sheet: List of Agency Actions for Review, WHITE HOUSE (Jan. 20, 2021), https://perma.cc/9MWM-EWQ3. In August 2021, the Department issued a new NPRM, this time proposing to delete the appliance classes created by the 2020 Rules. See Notice of Proposed Rulemaking, 86 Fed. Reg. 43970 (Aug. 11, 2021). A new final rule, which we call the Repeal Rule, was issued in January 2022. It revoked both the 2020 Dishwasher and the 2020 Laundry Rules. See Final Rule, 87 Fed. Reg. 2673 (Jan. 19, 2022) (the "Repeal Rule").

A group of States, led by Louisiana, petitioned our court for review of the Repeal Rule.¹

II.

"Jurisdiction is always first." Arulnanthy v. Garland, 17 F.4th 586, 592 (5th Cir. 2021) (alteration adopted). We (A) begin with the Constitution's jurisdictional requirements. Then we (B) explain that at least one State properly invoked our jurisdiction.

A.

"Article III of the Constitution limits federal courts' jurisdiction to certain 'Cases' and 'Controversies.' " Clapper v. Amnesty Int'l USA, 568 U.S. 398, 408, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013). "One element of the case-or-controversy requirement is that plaintiffs must establish that they have standing to sue." Ibid. (quotation omitted). One party with standing satisfies the constitutional requirement. See Town of Chester v. Laroe Estates, Inc., 581 U.S. 433, 439, 137 S.Ct. 1645, 198 L.Ed.2d 64 (2017) ("[W]hen there are multiple plaintiffs[,] [a]t least one plaintiff must have standing to seek each form of relief requested." (emphasis added)).

To establish constitutional standing, a plaintiff must show an "injury in fact" that is "fairly traceable" to the defendant's action and "likely" to be "redressed by a favorable decision." Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The States assert several theories of standing. DOE disputes all of them. We find the States succeed on their first theory and therefore decline to reach their others.

This first standing theory advanced by the States relies on Weissman v. National Railroad Passenger Corporation, 21 F.4th 854 (D.C. Cir. 2021). In Weissman, the D.C. Circuit explained that the "lost opportunity to purchase" products precluded by regulation constitutes an injury in fact. Id. at 857. The D.C. Circuit, reviewing forty years' worth of administrative law cases, concluded that compression in market availability of "desirable features" represents an injury to participants in the relevant market. Id. at 858-59. A market participant with many choices is advantaged relative to a participant with fewer choices, and market participants are therefore injured when their choices are constrained by regulation. See also, e.g., Coal. for Mercury-Free Drugs v. Sebelius, 671 F.3d 1275, 1281 (D.C. Cir. 2012); Orangeburg v. FERC, 862 F.3d 1071, 1077-78 (D.C. Cir. 2017); Chamber of Com. v. SEC, 412 F.3d 133, 138 (D.C. Cir. 2005); Consumer Fed'n of Am. v. FCC, 348 F.3d 1009, 1012 (D.C. Cir. 2003); Competitive Enter. Inst. ...