On August 8, 2017, a split D.C. Circuit Court ruled that the Environmental Protection Agency (EPA) cannot use the Clean Air Act to try to force companies to use alternatives for hydrofluorocarbons (HFCs) in various products. The ruling is being heralded as a victory for manufacturers concerned over the EPA’s interpretation of certain words in the Clean Air Act to support its authority and mandates.

In 2015, the EPA promulgated a rule that would have required manufacturers to replace hydrofluorocarbons with safe substitutes that do not deplete the ozone. The rule was intended to target substances that allegedly contribute to greenhouse gas emissions. HFCs are found in a multitude of products, including spray cans, automobile air conditioners and refrigerators. Two companies, Mexichem Fluor Inc. and Arkema Inc., challenged the rule on the basis that the EPA misconstrued language in Section 612 of the Clean Air Act in order to push its rule into effect.

The majority opinion agreed with Mexichem and Arkema, holding that while it is correct that Section 612 of the Clean Air Act does require manufacturers to replace ozone-damaging substances with safe substitutes, HFCs do not deplete the ozone, so the EPA could not rely on Section 612 when asserting authority to promulgate the rule. Further, the majority opinion noted that prior to 2015, the EPA stated that Section 612 did not grant the EPA authority to force companies to replace non-ozone-depleting substances. The EPA could not, therefore, reverse course and interpret language in the Clean Air Act such that the agency suddenly had the authority to regulate non-ozone-depleting substances.

Finally, the Court held that although it sympathized with the EPA’s efforts to combat climate change, the regulation that it attempted to enact regarding HFCs was written without statutory authority for the EPA to take such an action. The Court felt that the EPA enacted its regulation in an attempt to circumvent Congress, which has thus far not enacted any legislation regarding climate change. The EPA’s rule regarding HFC replacement was vacated and the case was remanded to the EPA.

The environmental laws, regulations, and codes are complex, but companies must not be afraid to challenge regulations based on misinterpretation of a statute or overstepping of authority grounds. As the D.C. Circuit Court case shows, efforts by regulatory agencies to circumvent the parameters of their authority in order to push regulations through will not be tolerated.

John Gardella and Bryna Misiura have represented clients in environmental-related claims. If you have any questions or would like more information, please contact John (email him or 617-936-4353, ext. 204).