Igas Holdings, Inc. v. Environmental Protection Agency

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 8, 2024 Decided August 1, 2025
No. 23-1261
IGAS HOLDINGS, INC., ET AL.,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
AIR-CONDITIONING, HEATING, AND REFRIGERATION
INSTITUTE AND ALLIANCE FOR RESPONSIBLE ATMOSPHERIC
POLICY,
INTERVENORS
Consolidated with 23-1263
On Petitions for Review of a Final Rule
of the Environmental Protection Agency
JoAnn T. Sandifer argued the cause for petitioners IGas
Holdings, Inc., et al. With her on the briefs were Jamie
Shookman and Daniel G. Solomon.

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Zhonette M. Brown argued the cause for petitioner RMS
of Georgia, LLC. With her on the briefs were Kaitlyn D.
Schiraldi and David M. Williamson.
Michael Pepson was on the brief for amicus curiae
Americans for Prosperity Foundation in support of petitioners.
Sarah A. Buckley, Attorney, U.S. Department of Justice,
argued the cause for respondent. With her on the brief was
Todd Kim, Assistant Attorney General.
Elizabeth B. Dawson argued the cause for intervenors for
respondent. With her on the brief were Thomas A. Lorenzen
and Robert J. Meyers.
Sarah C. Tallman, David Doniger, Nanding Chen, and Ian
Fein were on the brief for amicus curiae Natural Resources
Defense Council in support of respondent.
Before: PILLARD, PAN, and GARCIA, Circuit Judges.
Opinion for the Court filed by Circuit Judge PAN.
PAN, Circuit Judge: Hydrofluorocarbons (HFCs) are
synthetic cooling agents used in a variety of applications,
including refrigeration and air conditioning. Despite their
utility, HFCs are extremely potent greenhouse gases that
increase global warming. To address that problem, Congress
passed the American Innovation and Manufacturing (AIM) Act
of 2020. The AIM Act requires an 85 percent reduction in U.S.
production and consumption of HFCs by 2036. Congress
specified that the HFC phasedown would be accomplished with
a cap-and-trade program, and it tasked the Environmental
Protection Agency (EPA) with administering that program.

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In 2021, the EPA issued a rule to implement the cap-and-
trade program for the years 2022 and 2023 (the Framework
Rule). The program required the EPA to calculate and allocate
“allowances” that authorized industry members to produce and
consume HFCs. The EPA allocated the allowances to market
participants according to their historic market share, and
determined the market share of each participant based on its
production-and-consumption activities in the years 2011 to
2019. Subsequently, the EPA issued a new rule to set the
allocation methodology for the years 2024 through 2028 (the
2024 Rule). In the new rule, the EPA again allocated
allowances to market participants according to their historic
market share, and again used data from the years 2011 to 2019
to calculate that market share.
We now consider two challenges to the 2024 Rule.
Petitioner RMS of Georgia, LLC (which goes by its trade
name, “Choice”) argues that Congress violated the
nondelegation doctrine when it granted the EPA authority to
allocate use allowances, and that the EPA unconstitutionally
exercised legislative power when it promulgated the 2024
Rule. Petitioner IGas Holdings, Inc. (IGas) argues that the
EPA’s exclusion of 2020 data from its market-share
calculations was arbitrary and capricious. We deny both
petitions for review.
I.
The 2024 Rule is not the first of its kind. Congress has
employed cap-and-trade programs to phase out industrial use
of other hazardous refrigerants, including chlorofluorocarbons
(CFCs) and hydrochlorofluorocarbons (HCFCs). Those
predecessor programs are the model for the one at issue in this
case.

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Both CFCs and HCFCs are ozone-depleting substances. In
1986, the United States agreed to regulate such substances
when it ratified the 1985 Vienna Convention for the Protection
of the Ozone Layer. The subsequent 1987 Montreal Protocol,
ratified by the United States in 1988, set specific targets for the
global elimination of CFCs and HCFCs. To make good on
those treaty obligations, Congress enacted Title VI of the Clean
Air Act, 42 U.S.C. § 7671 et seq., which effectuated a phaseout
of CFC- and HCFC-emissions in the United States. Title VI
created a cap-and-trade program that (1) set limits (caps) on the
total level of emissions for CFCs and HCFCs, (2) authorized
the EPA to issue emissions allowances to market participants
(not to exceed the overall cap), (3) allowed companies to sell
(trade) their unused allowances, and (4) made it unlawful for
anyone to emit the regulated substances without having a
corresponding allowance. See id. §§ 7671c(a)–(c), 7671d(a)–
(c), 7671f. Today, CFCs have been eliminated, and new
production and importation of most HCFCs were phased out as
of 2020 (although some HCFCs are still used in existing air
conditioners and refrigeration equipment).
HFCs have proven to be an effective replacement for the
phased-out refrigerants. With the increased global use of air-
conditioning and refrigeration, the demand for HFCs also has
surged. Although HFCs do not deplete the ozone layer, they
present their own problem: HFCs are potent greenhouse gases
with a relative climatic impact “that can be hundreds to
thousands of times that of carbon dioxide.” J.A. 341. Thus, in
2016, signatories of the Montreal Protocol passed the Kigali
Amendment, which mandates reductions in the production and
consumption of HFCs. Although the United States did not
ratify the Amendment until 2022, Congress passed the AIM
Act to address HFCs in 2020.

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The AIM Act, 42 U.S.C. § 7675, mandates an 85 percent
phasedown of HFC production and consumption by 2036. To
accomplish that goal, the Act employs a cap-and-trade program
like those that were used to phase out CFCs and HCFCs.
Subsection (e) of the AIM Act creates a program that schedules
the HFC phasedown and authorizes the allocation of
production-and-consumption allowances that are capped and
traded. Subsection (e)(1) sets production-and-consumption
baselines according to specific formulas,1 while subsection
(e)(2) sets a timeline for gradually reducing HFC use as a
“capped” percentage of the baseline. Subsection (e)(3) directs
the EPA to allocate the allowances, which then can be traded.
The program accomplishes the targeted reductions in HFC
production and consumption by lowering the number of
available allowances each year.
Specifically, under subsection (e)(2)(C), HFC production
and consumption is capped at 90 percent of the baseline for the
years 2020 to 2023; at 60 percent of the baseline for the years
2024 to 2028; at 30 percent of the baseline for the years 2029
to 2033; at 20 percent of the baseline for the years 2034 to
2035; and, finally, at 15 percent of the baseline by the year
2036. See 42 U.S.C. § 7675(e)(2)(C).
For each year, the EPA must “ensure that the annual
quantity of all regulated substances produced or consumed in
the United States does not exceed” the targets in subsection
(e)(2)(C). 42 U.S.C. § 7675(e)(2)(B). To accomplish that task,
the EPA “shall use” the listed targets “to determine the quantity
1 The statute directs the EPA to set the baselines as the average
annual quantity of all regulated substances produced or consumed
from 2011 to 2013, plus the sum of 15 percent of the production or
consumption level of HCFCs in 1989 and 0.42 percent of the
production or consumption level of CFCs in 1989. See 42 U.S.C.
§ 7576(e)(1)(B)–(D).

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of allowances” for each year. Id. § 7675(e)(2)(D)(i). The AIM
Act describes an “allowance” as “a limited authorization for the
production or consumption of a regulated substance.” Id.
§ 7675(e)(2)(D)(ii)(I)(bb). Under subsection (e)(2), “no
person shall” produce or consume “a quantity of a regulated
substance without a corresponding quantity of [production-
and-consumption] allowances.” Id. § 7675(e)(2)(A).
Subsection (e)(3) of the Act gives the EPA authority to
“issue a final rule” that accomplishes the following:
(A) phasing down the production of regulated
substances in the United States through an
allowance allocation and trading program in
accordance with this section; and
(B) phasing down the consumption of regulated
substances in the United States through an
allowance allocation and trading program in
accordance with the schedule under
paragraph (2)(C) . . . .
42 U.S.C. § 7675(e)(3).
Finally, Congress provided for certain exceptions and also
mandated that the EPA initially “allocate the full quantity of
allowances necessary” for a small class of “essential uses.” 42
U.S.C. § 7675(e)(4)(B)(iv).
A.
In 2021, the EPA promulgated its Framework Rule, which
implements subsection (e) of the AIM Act for the years 2022
and 2023. See Phasedown of Hydrofluorocarbons:
Establishing the Allowance Allocation and Trading Program
Under the [AIM] Act (Framework Rule), 86 Fed. Reg. 55116

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(Oct. 5, 2021). As directed by the statute, the Framework Rule
calculated HFC production-and-consumption baselines under
subsection (e)(1) and then determined the quantity of
allowances that would be available in 2022 and 2023 under
subsection (e)(2) — i.e., the quantity that would achieve 90
percent of the baseline level of production and consumption.
The Framework Rule also established an allocation plan
for the 2022–2023 allowances. First, the EPA decided that
allowances would be issued to entities that had historical
production-and-consumption data and that were still active in
2020, with case-by-case exceptions for companies with
pandemic-related disruptions in 2020. Next, the EPA allocated
the available allowances to those entities according to their
historical market share. To calculate an entity’s market share,
the EPA looked to that entity’s three highest years of
production or consumption activity between the years 2011 and
2019. It then averaged the data from those three high years and
divided that number by the sum of all entities’ high-three
averages. Finally, the EPA multiplied that number by the total
number of allowances in the pool (which was 90 percent of the
baseline amount). The EPA said it would reconsider this
methodology before the next step of the phasedown, in 2024.
B.
Subsequently, the EPA proposed an allocation
methodology for HFC allowances for the years 2024 through
2028, the period for which subsection (e)(2) capped production
and consumption at 60 percent of the baseline. After
calculating the quantity of allowances available, the EPA
proposed “to continue using historic production and
consumption data from 2011 to 2019” to allocate allowances
by market share, in part to “minimize disruption to the market
in 2024,” and in part because the “EPA ha[d] conducted

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multiple rounds of outreach and review” on that dataset.
Phasedown of Hydrofluorocarbons: Allowance Allocation
Methodology for 2024 and Later Years (Proposed Rule), 87
Fed. Reg. 66372, 66377–78 (Nov. 3, 2022).
The EPA noted, however, that it was “considering whether
to include more recent data” to reflect the current state of the
HFC production and import market. Proposed Rule, 87 Fed.
Reg. at 66378. The EPA therefore “request[ed] comment on
whether to expand the range of years to use to develop each
allowance holder’s high three-year average to include 2020 and
2021.” Id. But the agency previewed its concerns about using
the more recent data, stating: “[T]he Agency recognizes that
production and importation of HFCs in 2020 and 2021 were
likely influenced by external factors such as the COVID–19
pandemic, and supply chain disruptions. In addition, EPA is
concerned that data from 2020 and 2021 could be distorted due
to an entity’s awareness that the AIM Act may be, or had been,
passed,” leading to stockpiling. Id. The EPA further worried
that “[e]xpanding the range of years could also significantly
change each entity’s market share, which could disrupt the
market and negatively affect ongoing adjustments to the HFC
Allocation Program that have taken place in 2022 and 2023.”
Id. Finally, the EPA said it was “unaware of any environmental
benefit associated with changing the years used to determine
allowance allocations.” Id.
Petitioners Choice and IGas each submitted comments on
the proposed rule. Choice is a small business that reclaims
HFCs and invents HFC blends. Its comments argued that
subsection (e) of the AIM Act unconstitutionally delegated
legislative power to the EPA. IGas is a participant in
refrigerant aftermarkets for existing HFC-containing
equipment. IGas’s comments urged the EPA to include data
from the years 2020 and 2021 in its allocation methodology

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because, in its view, the EPA’s focus on years 2011 to 2019
ignored the aftermarket’s growth in more recent years and
favored companies that were not involved in the aftermarket.
In its final 2024 Rule setting the allocation methodology
for the years 2024 to 2028, the EPA continued to rely on
market-share data from 2011 to 2019 and thus excluded data
from 2020 and 2021. See Phasedown of Hydrofluorocarbons:
Allowance Allocation Methodology for 2024 and Later Years
(2024 Rule), 88 Fed. Reg. 46836, 46842 (July 20, 2023). The
EPA explained that the data from 2020 and 2021 were not
representative of the typical market due to the pandemic, had
not been as thoroughly vetted as the 2011 to 2019 dataset, and
could cause market disruptions by drastically changing
entities’ market share from what had been implemented under
the Framework Rule.
C.
Choice and IGas timely petitioned for review of the 2024
Rule, and their appeals were consolidated. Two trade
associations whose members are regulated HFC importers and
producers — the Air-Conditioning, Heating, and Refrigeration
Institute, and the Alliance for Responsible Atmospheric Policy
— intervened as respondents.2
2 Article III standing is a prerequisite to intervention, even as a
respondent. See Deutsche Bank Nat’l Tr. Co. v. FDIC, 717 F.3d 189,
193 (D.C. Cir. 2013). But see Inst’l Shareholder Servs. v. SEC, --
F.4th --, 2025 WL 1802786, at *4 n.3 (D.C. Cir. July 1, 2025)
(recognizing tension with cases holding that “intervenors that seek
the same relief sought by at least one existing party need not” show
standing (citing Little Sisters of the Poor Saints Peter & Paul Home
v. Pennsylvania, 591 U.S. 657, 674 n.6 (2020))). Although no party

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II.
Petitioner Choice argues that the AIM Act
unconstitutionally delegates legislative power to the EPA by
granting the agency “unconstrained authority” to allocate HFC
allowances. Choice Br. 1. Choice asks us to vacate the EPA’s
2024 Rule because it is “contrary to constitutional right, power,
privilege, or immunity.” 42 U.S.C. § 7607(d)(9)(B) (made
applicable to the AIM Act through 42 U.S.C. § 7675(k)(1)(C)).
A.
Amicus National Resources Defense Council (NRDC)
argues that Choice lacks standing to challenge the EPA’s 2024
Rule. We disagree. Choice imports HFCs that are regulated
by the EPA under the AIM Act, and Choice receives
allowances for that import activity. Choice therefore “has
standing to challenge an allegedly illegal statute or rule under
which it is regulated.” State Nat’l Bank of Big Spring v. Lew,
795 F.3d 48, 53 (D.C. Cir. 2015).
NRDC contends, however, that Choice has not established
standing because it has not alleged that its injury will be
redressed by the court striking down the only section of the
AIM Act that Choice challenges: subsection (e)(3), which
provides for the allocation of allowances. According to
NRDC, if subsection (e)(3) is vacated and the EPA thereby
loses its authority to allocate allowances, then no entity could
contests the Intervenors’ standing, “we have an independent
obligation to assure ourselves that standing exists.” Pub. Emps. for
Env’t Resp. v. EPA, 77 F.4th 899, 912 (D.C. Cir. 2023) (cleaned up).
Because the Intervenors are both trade associations whose members
are regulated HFC importers and producers, they have associational
standing. See Fund Democracy, LLC v. SEC, 278 F.3d 21, 25 (D.C.
Cir. 2002).

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produce or consume HFCs at all because subsection (e)(2)
prohibits the production and consumption of HFCs without a
corresponding allowance. NRDC reasons that the resulting
inability to import HFCs would exacerbate, not redress,
Choice’s injury of having its “market activity limited” and its
“market share . . . reduced.” Choice Br. 15, 18.
We disagree with NRDC’s assumption that subsection
(e)(2) would remain operative if we invalidated subsection
(e)(3). An unconstitutional provision is “presumed severable”
from the statute only “if what remains after severance is fully
operative as a law.” INS v. Chadha, 462 U.S. 919, 934 (1983)
(cleaned up). Any presumption of severability is overcome
where “it is evident that the Legislature would not have enacted
those provisions which are within its power, independently of
that which is not.” Buckley v. Valeo, 424 U.S. 1, 108 (1976)
(cleaned up); see also Regan v. Time, Inc., 468 U.S. 641, 653
(1984) (“Whether an unconstitutional provision is severable
from the remainder of the statute in which it appears is largely
a question of legislative intent[.]”).
In our view, the interrelated subparts of subsection (e) are
not severable. Subsection (e)(2) prohibits HFC production and
consumption without a corresponding allowance. That
provision cannot be “fully operative as a law” without
subsection (e)(3)’s mechanism for allocating allowances.
Chadha, 462 U.S. at 934 (cleaned up). Congress plainly would
not have enacted the remainder of subsection (e) if there were
no way to allocate HFC allowances because the entire cap-and-
trade program depends on the availability of allowances.
Accordingly, we are satisfied that Choice has standing to
challenge the constitutionality of subsection (e)(3).

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B.
Turning to the merits, we hold that the AIM Act does not
unconstitutionally delegate legislative power because it
sufficiently constrains the EPA’s discretion to allocate HFC
allowances.
1.
The Constitution vests “[a]ll legislative Powers herein
granted . . . in a Congress of the United States.” U.S. Const.
art. I, § 1. “This text permits no delegation of those powers[.]”
Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 472 (2001).
That does not mean, however, that Congress may not seek
“assistance from another branch.” J.W. Hampton, Jr., & Co. v.
United States, 276 U.S. 394, 406 (1928). “[I]n particular,
[Congress] may confer substantial discretion on executive
agencies to implement and enforce the laws.” Gundy v. United
States, 588 U.S. 128, 135 (2019) (plurality opinion). The
Constitution is not offended when Congress “vest[s] discretion
in” agencies “to make public regulations interpreting a statute
and directing the details of its execution,” so long as that
discretion is “within defined limits.” J.W. Hampton, 276 U.S.
at 406; Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 46 (1825)
(Marshall, C.J.) (“[T]he maker of the law may commit
something to the discretion of the other departments[.]”); Am.
Trucking, 531 U.S. at 475 (“A certain degree of discretion
. . . inheres in most executive . . . action.” (cleaned up)); cf.
Loper Bright Enters. v. Raimondo, 603 U.S. 369, 394 (2024)
(“In a case involving an agency, of course, the statute’s
meaning may well be that the agency is authorized to exercise
a degree of discretion.”).
“Once it is conceded, as it must be,” that some discretion
— and “even some judgments involving policy considerations”
— “must be left to the officers executing the law,” the

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remaining debate is “not over a point of principle but over a
question of degree.” Mistretta v. United States, 488 U.S. 361,
415 (1989) (Scalia, J., dissenting). The Court has said that “the
degree of agency discretion that is acceptable varies according
to the scope of the power congressionally conferred.” Am.
Trucking, 531 U.S. at 475. “The guidance needed is greater . . .
when an agency action will affect the entire national economy
than when it addresses a narrow, technical issue[.]” FCC v.
Consumers’ Rsch., No. 24-354, slip op. at 11 (June 27, 2025)
(cleaned up). Still, “even in sweeping regulatory schemes,” the
nondelegation doctrine has “never demanded . . . that statutes
provide a determinate criterion.” Am. Trucking, 531 U.S. at
475 (cleaned up).
The nondelegation analysis boils down to this: When
“confer[ring] decisionmaking authority upon agencies,”
Congress “must lay down by legislative act an intelligible
principle to which the person or body authorized to act is
directed to conform.” Am. Trucking, 531 U.S. at 472 (cleaned
up). When setting forth an “intelligible principle,” Congress is
not required to “prescribe detailed rules” but rather to “clearly
delineate[] the general policy, the public agency which is to
apply it, and the boundaries of this delegated authority.” Am.
Power & Light Co. v. SEC, 329 U.S. 90, 105 (1946). If a
federal law contains such an intelligible principle to guide an
agency’s actions, then there is no nondelegation problem: The
law permissibly grants discretion to an agency rather than
unconstitutionally transfers legislative power. See Consumers’
Rsch., slip op. at 6 (Kavanaugh, J., concurring) (“[W]hen
implementing legislation that contains an intelligible principle,
the President is exercising executive power.”).
Consistent with the foregoing principles, the Supreme
Court has invalidated only two federal laws for violating the
nondelegation doctrine, both times in 1935, and “in each case

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because Congress had failed to articulate any policy or standard
to confine discretion.” Gundy, 588 U.S. at 146 (cleaned up)
(emphasis in original); see also A.L.A. Schechter Poultry Corp.
v. United States, 295 U.S. 495 (1935); Panama Refining Co. v.
Ryan, 293 U.S. 388 (1935). Since then, the Court has “over
and over upheld even very broad delegations.” Gundy, 588
U.S. at 146. To name a few: The Court has upheld laws
authorizing agencies to regulate broadcast licensing as “public
interest, convenience, or necessity” requires, Nat’l Broad. Co.
v. United States, 319 U.S. 190, 225–26 (1943); set “just and
reasonable” rates for natural gas, Fed. Power Comm’n v. Hope
Nat. Gas Co., 320 U.S. 591, 600 (1944); and set air-quality
standards that are “requisite to protect the public health,” Am.
Trucking, 531 U.S. at 472–76. In so doing, the Court has
affirmed and reaffirmed that the governing standards for a
permissible delegation are “not demanding.” Gundy, 588 U.S.
at 146.
2.
Against that backdrop, the AIM Act easily passes muster.
Congress enacted a detailed program for capping and trading
HFC allowances, in which the EPA has discretion to decide
how to allocate the allowances. Congress provided ample
direction to guide the EPA’s exercise of discretion: The Act’s
text, structure, and history demonstrate that Congress intended
for the EPA to model its cap-and-trade program on similar
programs established under the Clean Air Act, and those
programs allocated allowances to market participants
according to their market share. “Given that statutory
meaning,” Choice’s “constitutional claim must fail” —
subsection (e)(3)’s “delegation falls well within permissible
bounds.” Gundy, 588 U.S. at 136.

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The question of whether Congress has supplied an
intelligible principle to guide the agency’s use of discretion
begins with statutory interpretation. We must “constru[e] the
challenged statute to figure out what task it delegates and what
instructions it provides.” Gundy, 588 U.S. at 136. “Only after
a court has determined a challenged statute’s meaning can it
decide whether the law sufficiently guides executive discretion
to accord with Article I.” Id. The established rules of statutory
interpretation “hold[] good for delegations, just as for other
statutory provisions.” Id. at 141. And so, when reviewing a
statute for an intelligible principle, “we do not confine
ourselves to the isolated phrase in question, but utilize all the
tools of statutory construction, including the statutory context
and, when appropriate, the factual background of the statute to
determine whether the statute provides the bounded discretion
that the Constitution requires.” Owens v. Republic of Sudan,
531 F.3d 884, 890 (D.C. Cir. 2008); see Consumers’ Rsch., slip
op. at 22 (noting that previous nondelegation cases “did not
examine . . . statutory phrases in isolation but instead looked to
the broader statutory contexts, which informed their
interpretation and supplied the content necessary to satisfy the
intelligible-principle test”).
We thus review the AIM Act’s “text, considered alongside
its context, purpose, and history.” Gundy, 588 U.S. at 136. We
agree with the EPA that the statute guided the agency “to
allocate . . . allowances among persons that have produced or
imported hydrofluorocarbons.” EPA Br. 27–29. The statutory
text commands the EPA to allocate allowances “in accordance
with” the Act, 42 U.S.C. § 7675(e)(3); and the Act focuses on
reducing HFC “production and consumption.” See id.
§ 7675(e)(3)(A)–(B) (directing the EPA to “issue a final rule”
“phasing down the production . . . [and] consumption” of
HFCs); see also id. § 7675(e)(2)(C) (setting schedule for
reducing baseline levels of “production and consumption” of

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HFCs). To accomplish the statute’s goal of phasing down
HFCs, the EPA must require the existing players in the HFC
market to lower their HFC “production and consumption” to a
degree that is commensurate with the capped number of
allowances issued by the agency. A natural way to allocate the
allowances to achieve that purpose is to rely on the market
participants’ historical market share.
Moreover, precedent supports that approach: The AIM
Act follows the lead of two predecessor cap-and-trade
programs that virtually eliminated the emissions of CFCs and
HCFCs. Indeed, legislative history demonstrates that the AIM
Act was “modeled on” Title VI of the Clean Air Act. See
Promoting American Innovation and Jobs: Legislation to
Phase Down Hydrofluorocarbons: Hearing on H.R. 5544
Before the Subcomm. on Env’t & Climate Change of the H.
Comm. on Energy & Com., 116th Cong. 2, 7 (2020) (statements
of Rep. Paul Tonko, Chairman, H. Subcomm. on Env’t &
Climate Change, and Rep. Frank Pallone, Jr., Chairman, H.
Comm. on Energy & Com.) (Title VI “proved an able vehicle
to foster an orderly, market-based phasedown of HFCs’
predecessors,” and the AIM Act “builds upon [Congress’s]
previous experience in phasing out CFCs and their replacement
chemicals, HCFCs.”). Thus, in both statutes, Congress used
“baseline” years to set caps and phaseout schedules for the
regulated refrigerants. Compare 42 U.S.C. §§ 7671(2)(A)–
(C), 7671c(a), 7671d(b), with id. § 7675(e)(1). Congress also
directed the EPA to allocate allowances to accomplish the
refrigerant phaseouts “in accordance with” each controlling
Act. Compare 42 U.S.C. §§ 7671c(c), 7671d(c), with id.
§ 7675(e)(3). Congress even expressly incorporated certain
provisions of Title VI into the AIM Act, such as the penalty,
recordkeeping-and-monitoring, citizen-suit, and judicial-
review provisions. See id. § 7675(k)(1)(C).

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Based on the strong similarity between the programs
created by the AIM Act and Title VI, it is evident that Congress
expected the EPA to implement the HFC cap-and-trade
program in a manner that tracked the successful predecessor
programs for CFCs and HCFCs — and those predecessor
programs allocated allowances according to market share.
Compare Protection of Stratospheric Ozone, 57 Fed. Reg.
33754, 33754 (July 30, 1992) (“[The EPA] [a]pportions
baseline allowances to produce or import ozone depleting
substances to companies that produced or imported certain
ozone depleting substances in the baseline years[.]”), with 2024
Rule, 88 Fed. Reg. at 46837 (“The Agency is basing these
general pool allocations on entities’ market shares derived from
the average of the three highest years of production and
consumption, respectively, of regulated substances between
2011 and 2019.”). That interpretation of the AIM Act is
consistent with “the familiar principle that Congress legislates
with a full understanding of existing law.” Am. Fed’n of Gov’t
Emps. v. FLRA, 46 F.3d 73, 78 (D.C. Cir. 1995). Congress
intended that the EPA would implement the AIM Act by
allocating allowances in an orderly, market-based fashion, as it
did when implementing cap-and-trade programs under Title
VI. See Am. Power & Light Co., 329 U.S. at 104 (concluding
that the relevant delegation “derive[d] much meaningful
content from the purpose of the Act, its factual background and
the statutory context”).3
3 We also note that, to the extent the AIM Act is susceptible to
more than one plausible construction, we should read the statute to
avoid granting discretion that is so broad that it could create a
nondelegation problem. See Consumers’ Rsch., slip op. at 30
(“Statutes (including regulatory statutes) should be read, if possible,
to comport with the Constitution, not to contradict it.”); Gundy, 588
U.S. at 136 (rejecting the petitioner’s preferred reading of the statute,
under which the Court “would face a nondelegation question”).

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18
“Now that we have determined what [the statute] means,
we can consider whether it violates the Constitution.” Gundy,
588 U.S. at 145. The foregoing analysis reveals that our
interpretation of the statute all but answers the constitutional
question of whether Congress provided an intelligible principle
to guide the agency’s discretion. See id. at 136 (“[I]ndeed, once
a court interprets the statute, it may find that the constitutional
question all but answers itself.”).
Here, the AIM Act directs the EPA’s regulatory authority
“to a particular subject matter . . . in a particular industry” —
i.e., the allocation of a capped number of allowances for the
production and consumption of HFCs. Sanchez v. Off. of State
Superintendent of Educ., 45 F.4th 388, 401–02 (D.C. Cir.
2022). “Within that narrow sphere,” Congress “can delegate
considerable discretion.” Id. at 402. Indeed, how to allocate
allowances in a cap-and-trade program is the sort of “technical
issue” for which little guidance is necessary. Consumers’
Rsch., slip op. at 11; see Am. Trucking, 531 U.S. at 475 (“[T]he
degree of agency discretion that is acceptable varies according
to the scope of the power congressionally conferred.”). By
modeling the AIM Act on Title VI, Congress “imposed
ascertainable and meaningful guideposts for” the EPA “to
follow when carrying out its delegated function of” allocating
HFC allowances: The guideposts are found in Title VI and its
implementing regulations, which allocated allowances
according to the historical market share of industry
participants. Consumers’ Rsch., slip op. at 19. The AIM Act’s
allocation provisions, read in context, are constitutionally
sufficient and do not violate the nondelegation doctrine. See
Gundy, 588 U.S. at 135–36; see also Sanchez, 45 F.4th at 401–
02 (concluding that the “implication of the Act, read as a
whole,” clearly guided the Mayor’s discretion).

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19
The AIM Act plainly does not give the EPA the sort of
unbounded discretion that renders a statute unconstitutional.
Subsection (e)(3) is very different from the only two
precedents, from over ninety years ago, that applied the
nondelegation doctrine to strike down a law. See Panama
Refining Co., 293 U.S. 388; A.L.A. Schechter Poultry Corp.,
295 U.S. 495. The Supreme Court overturned statutes “in each
case because Congress had failed to articulate any policy or
standard to confine discretion.” Gundy, 588 U.S. at 146
(cleaned up) (emphasis in original). By contrast, as discussed,
the history and context of the AIM Act show that Congress
provided ample direction to confine the EPA’s discretion in
implementing the statute’s allowance-allocation program.
3.
We are unpersuaded by Choice’s counterarguments.
Choice complains that the AIM Act’s language directing the
EPA to distribute allowances “in accordance with this section,”
42 U.S.C. § 7675(e)(3), is not as specific as the direction
provided in other sections of the Act. But the Constitution does
not require the degree of specificity demanded by Choice. See
Am. Trucking, 531 U.S. at 475 (noting that the nondelegation
doctrine has “never demanded . . . that statutes provide a
determinate criterion” (cleaned up)).
Choice further disputes Title VI’s relevance to the AIM
Act and says that Title VI cannot provide limiting principles
here because Congress “expressly incorporated certain
procedural provisions of the Clean Air Act” while “declin[ing]
to refer to any substantive provisions.” Choice Reply Br. 14.
As already discussed, however, the Act’s structure and history
clearly show that Congress relied on Title VI for more than the
procedural provisions expressly incorporated. See, e.g.,
Hearing on H.R. 5544, 116th Cong. 2 (statement of Rep. Paul

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20
Tonko) (“The legislation is modeled on Title VI of the Clean
Air Act,” which “proved an able vehicle to foster an orderly,
market-based phasedown of HFCs’ predecessors.”).
Finally, Choice accuses the EPA of taking different
positions in prior proceedings and argues that the EPA’s
decision to model its HFC phasedown on Title VI today does
not prevent the EPA from “abandon[ing] this system in the
future.” Choice Reply Br. 14; see also Am. Trucking, 531 U.S.
at 472 (“[A]n agency [cannot] cure an unlawful delegation of
legislative power by adopting in its discretion a limiting
construction of the statute.”). We decline to consider this
possibility because it is not our job to address hypothetical
future applications of the AIM Act. Cf. Nat’l Endowment for
the Arts v. Finley, 524 U.S. 569, 584 (1998) (We will not
“invalidate legislation on the basis of . . . hypothetical . . .
situations not before” us. (cleaned up)). If the EPA
“abandon[s] this system in the future,” Choice Reply Br. 14,
that action can be subject to further APA challenge.
For the reasons discussed, we deny Choice’s petition.
III.
Petitioner IGas challenges the EPA’s 2024 Rule as
arbitrary and capricious. According to IGas, the EPA’s
decision to calculate market share by considering an entity’s
three highest years of production and consumption between
2011 and 2019 was unreasonable because it excluded 2020
data.4 Because the EPA’s methodology was reasonable, we
reject IGas’s challenge and deny its petition for review.
4 IGas has standing to challenge the 2024 Rule. IGas imports
HFCs regulated by the EPA’s Rule and receives allocations for that

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21
A.
As a threshold matter, we disagree with the EPA’s
contention that IGas forfeited its argument that the agency
“failed to independently consider whether 2020 data should be
included” in the allocation methodology. IGas Br. 15. The
EPA argues that IGas’s comments during the agency-review
process urged the agency to adopt data from both 2020 and
2021, which did not adequately preserve its argument on appeal
that EPA should consider only the 2020 data. See 42 U.S.C.
§ 7607(d)(7)(B) (An argument is preserved for appeal if it was
made “with reasonable specificity during the period for public
comment” before the agency.). But the EPA’s assertion that
IGas did not previously “point[] to any material difference
between the 2020 and 2021 data,” EPA Br. 41, is belied by the
record. In direct response to the EPA’s concern about
stockpiling in 2020 and 2021, IGas offered different reasons
for disproving the stockpiling theory for each year. Compare
J.A. 260–61, with J.A. 262–63. Because IGas pointed out
differences in the 2020 and 2021 data, IGas’s “comment to the
agency was adequate notification of the general substance” of
a claim that the agency should consider each year’s data
separately. S. Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d
882, 891 (D.C. Cir. 2006); see also Appalachian Power Co. v.
EPA, 135 F.3d 791, 817–18 (D.C. Cir. 1998) (“[T]he [Clean
Air] Act does not require that precisely the same argument that
was made before the agency be rehearsed again, word for word,
on judicial review.”).
import activity. It is thus an “object of the action . . . at issue,” and
there is “little question” that the action has caused it injury and that
a judgment preventing the action will redress that injury. Sierra Club
v. EPA, 292 F.3d 895, 900 (D.C. Cir. 2002) (cleaned up).

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22
B.
On the merits, we conclude that the EPA reasonably
excluded the 2020 data. Under the Clean Air Act, made
applicable to the AIM Act through 42 U.S.C. § 7675(k)(1)(C),
we “may reverse any [] action found to be arbitrary, capricious,
[or] an abuse of discretion.” 42 U.S.C. § 7607(d)(9)(A). “To
determine whether EPA’s rules are arbitrary and capricious, we
apply the same standard of review under the Clean Air Act as
we do under the Administrative Procedure Act (APA).” Allied
Loc. & Reg’l Mfrs. Caucus v. EPA, 215 F.3d 61, 68 (D.C. Cir.
2000) (cleaned up). Under that standard, an agency must
engage in reasoned decision-making. See Michigan v. EPA,
576 U.S. 743, 750 (2015). This means that “the agency must
examine the relevant data and articulate a satisfactory
explanation for its action including a rational connection
between the facts found and the choice made.” Motor Vehicle
Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983) (cleaned up). Agency action is arbitrary and
capricious if the agency “relied on factors which Congress has
not intended it to consider, entirely failed to consider an
important aspect of the problem,” or “offered an explanation
for its decision that runs counter to the evidence before the
agency or is so implausible that it could not be ascribed to a
difference in view or the product of agency expertise.” Id. But
our “scope of review under the ‘arbitrary and capricious’
standard is narrow,” and we are not to “substitute [our]
judgment for that of the agency.” Id. Further, “when an agency
relies on multiple grounds for its decision,” we may “sustain
the decision as long as one is valid and the agency would
clearly have acted on that ground even if the other were
unavailable.” Casino Airlines, Inc. v. NTSB, 439 F.3d 715, 717
(D.C. Cir. 2006) (cleaned up).

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23
Applying that deferential standard of review, the EPA’s
decision to exclude the 2020 data from its allocation
methodology was not arbitrary and capricious because the
agency reasonably concluded that (1) the data was
unrepresentative of market share, and (2) its inclusion would
disrupt the market.
First, the EPA reasonably determined that the 2020 data
was “less representative due to several important global and
market factors,” “such as the COVID–19 pandemic and supply
chain disruptions,” “and therefore [did] not accurately
represent companies’ market share.” 2024 Rule, 88 Fed. Reg.
at 46843. The EPA conducted extensive stakeholder outreach
and received comments agreeing with its concern that the
“production and importation of HFCs in 2020 [] were
influenced by external factors such as the COVID–19
pandemic and supply chain disruptions.” Id. Indeed, IGas’s
own comments conceded that 2020 was “anomalous as a result
of the COVID–19 pandemic where supply chain difficulties
dominated all markets.” J.A. 60; see also J.A. 256 (continuing
to represent that there were “significant difficulties with supply
and transportation caused by the COVID–19 pandemic”). The
EPA’s final rule further noted that the agency “received
comments from a trade organization whose members represent
70 percent of the dollar value of the HVAC-Refrigeration
market, 400 whole companies, nearly 300 manufacturing
associates and nearly 100 manufacturer representatives, who
supported the Agency’s proposal to exclude 2020 and 2021
from evaluation.” 2024 Rule, 88 Fed. Reg. at 46843. It was
plainly reasonable for the EPA to rely on the comments of a
“breadth of stakeholders,” id. at 46844, as well as IGas’s own
comments about the 2020 data.
We also reject IGas’s argument that the 2020 data should
be included even if it is atypical, to avoid punishing companies

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24
that managed to do well in atypical years. The EPA’s decision
that allocations should reflect typical market share is a policy
judgment entitled to deference. See Bluewater Network v.
EPA, 370 F.3d 1, 11 (D.C. Cir. 2004) (We do not “substitute
our policy judgment for that of the Agency.”). Our job is
limited to “ensuring that EPA has examined the relevant data
and articulated a satisfactory explanation for its action.” Id.
(cleaned up). Here, the EPA has done that. The EPA
acknowledged the issue raised by IGas, but disagreed “that it
would be appropriate to incorporate data influenced by the
pandemic because some entities did well during those years.”
2024 Rule, 88 Fed. Reg. at 46845. The EPA reasonably
declined to “provid[e] a company with additional future
allowances based on activity in years that are so unusual.” Id.5
Second, the EPA’s decision to exclude the 2020 data
because of its potential to disrupt the market independently
supports upholding the 2024 Rule. In the 2024 Rule, the EPA
chose to maintain existing market-share calculations — which
did not include 2020 data — because “[r]egulated entities have
. . . previously expressed a preference for allowances to be
allocated using a consistent approach for as long as possible.”
2024 Rule, 88 Fed. Reg. at 46844. The agency determined that
“[a]pplying a similar approach as the one taken” previously
5 And contrary to IGas’s assertions, the EPA was not inconsistent
in its treatment of 2020 data. IGas argues that the EPA’s decision to
exclude 2020 data as unrepresentative is undermined by the
Framework Rule, which required entities to be an active market
participant in 2020 to be eligible for allowances. But the Framework
Rule recognized the atypicality of 2020 by providing exceptions for
entities that were inactive in 2020 due to the COVID–19 pandemic.
See Framework Rule, 86 Fed. Reg. at 55144 (stating that the EPA
will “give individualized consideration to circumstances of historical
importers that were not active in 2020,” “for example if [inactivity]
was due to the COVID–19 pandemic”).

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25
“will provide a longer-term planning horizon for HFC
producers and entities importing, which will enable entities to
make decisions about which HFCs, and HFC substitutes, to
produce and import as the market transitions[.]” Id. For those
reasons, the EPA concluded, retaining the Framework Rule’s
dataset to set allowances was the “best means for reducing
(though not eliminating) disruption to the market.” Id. The
EPA thus “justif[ied] its rule with a reasoned explanation.”
Stilwell v. Off. of Thrift Supervision, 569 F.3d 514, 519 (D.C.
Cir. 2009).
We disagree with IGas’s claim that excluding 2020 data
does not advance the EPA’s stated goal of continuity and that
the EPA’s conclusion was “left completely unexplained.” IGas
Br. 42 (quoting West Virginia v. EPA, 362 F.3d 861, 866 (D.C.
Cir. 2004)). And although IGas argues otherwise, the EPA was
not required to conduct studies to conclusively show that the
2020 data would have significantly changed individual
allocations. The APA “imposes no general obligation on
agencies to produce empirical evidence.” Stilwell, 569 F.3d at
519.
For the foregoing reasons, we deny IGas’s petition.6
So ordered.
6 We need not examine the additional reasons that the EPA
provided for excluding the 2020 data, including its statements that
2020 was not a representative year due to stockpiling ahead of the
AIM Act’s passage, and that 2020 data was not as reliable or well-
vetted as data from 2011 to 2019. That analysis would be
superfluous. See Casino Airlines, 439 F.3d at 717 (“We have
consistently held that when an agency relies on multiple grounds for
its decision, some of which are invalid, we may nonetheless sustain

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the decision as long as one is valid and the agency would clearly have
acted on that ground even if the other were unavailable.” (cleaned
up)).

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