Lawsuit argues Congress unconstitutionally delegated legislative authority to the EPA

As part of a law seeking to phase down refrigerants contributing to global warming, Congress delegated to the EPA the authority to choose who is and isn’t allowed to produce and sell the products.

According to a lawsuit filed against the EPA last October by a company that says its business has been harmed by the agency’s decisions, Congress unconstitutionally delegated its power to a federal agency under this arrangement. The EPA is asking the court to dismiss the case.

“Congress needs to do its job, and not delegate these important sort of life and death decisions for companies to a non-responsive agency,” Zhonette Brown, general counsel for the New Civil Liberties Alliance, told Just The News.

The New Civil Liberties Alliance (NCLA) is a nonpartisan nonprofit that seeks to protect constitutional freedoms from violations of the administrative state. It is representing Choice Refrigerants, a small refrigerant manufacturer in Georgia, in its suit against the EPA.

In 2020, the American Innovation and Manufacturing (AIM) Act included provisions to phase down hydrofluorocarbons. Hydrofluorocarbons (HFCs) are found in refrigerators, air conditioners, building insulation, and fire extinguishers.

The chemical is said to trap thousands of times more heat than carbon dioxide. The chemicals are only about 2% of total greenhouse gasses, but unlike carbon dioxide, HFCs last only about 15 years in the atmosphere. This has made them an attractive target for reducing global warming.

The AIM Act granted the EPA the power to distribute a limited number of allowances for companies to import or manufacture HFCs. However, according to the NCLA, lawmakers didn’t provide the EPA with any guidance as to who should receive the allowances.

According to the complaint filed by Choice Refrigerants in U.S. District Court for the Northern District of Georgia, the EPA decided to grant allowances based on companies’ reporting under the Greenhouse Gas Reporting Program (GHGRP), which the EPA implemented in 2009.

Choice Refrigerants argues that the program had nothing to do with allocating market share, and by basing its allowances on the program, the EPA adopted a system that grants them to “paperwork filers rather than actual producers.”

According to the lawsuit, the decisions the EPA made shortchanged the company’s expected allowances by approximately 30%, and the EPA didn’t explain in its allocation notices how or why its decisions were made.

The company also alleges the EPA granted these allowances to a Chinese company that had illegally imported HFCs, but since it had filed GHGRP paperwork, it received preference from the allowances.

Americans For Prosperity (AFP) filed an amicus brief Friday in support of Choice’s arguments in the case.

“The Constitution categorically bars administrative bodies from exercising legislative power,” AFP stated in the brief that the NCLA mailed to Just The News.

Policy questions, the group continued, are constitutionally vested with democratically elected officials and meant to go through the “deliberately arduous legislative process,” which is subjected to limits on federal power.

The AFP said the case is not about whether the reduction of HFCs are sound policy, but rather who has the authority to execute those policies.

“In this country, all governmental power must flow from its proper source: We the People,” the AFP wrote, and Congress can’t transfer its power to other entities.

However, a single sentence in the AIM Act, the AFP wrote, grants the EPA the power to choose which businesses receive allowances to produce and sell HCFs, and in what amounts.

“This allows EPA to decide the fates of affected businesses however it wants, for whatever reason it wants,” the AFP wrote.

The group urged the court not to sweep “this constitutional disorder under the rug.”

The EPA declined to comment on the matter because it involves pending litigation.