Supreme Court Declines to Hear Challenge to EPA's Refrigerant Allocation Rule

The U.S. Supreme Court has declined to hear a constitutional challenge to the Environmental Protection Agency's authority to allocate hydrofluorocarbon production and import allowances under the AIM Act, leaving in place the regulatory framework that governs the ongoing HFC phasedown across the refrigeration and air conditioning industry.

The case, RMS of Georgia v. EPA — litigated on behalf of the company under the name Choice Refrigerants — challenged the EPA's authority to allocate 98% of allowances in the HFC market without what the plaintiffs argued was adequate statutory direction from Congress. The denial of certiorari was included in a list of orders released following the justices' June 18 conference and announced the following Monday.

The Case Behind the Challenge

Choice Refrigerants, a small Georgia-based refrigerant business, argued that the EPA had been granted an unconstitutional degree of discretion under the American Innovation and Manufacturing Act of 2020, and said the agency's allocation decisions had eliminated roughly a third of its market share. The New Civil Liberties Alliance, a nonprofit legal group, represented the company and asked the justices to use the case to revisit the nondelegation doctrine, a legal principle limiting how much regulatory authority Congress can hand to federal agencies.

The petition drew significant outside attention. Twenty-one states filed an amicus brief in April supporting the challenge, and the case had been closely watched by both environmental groups defending the EPA's phasedown authority and industry critics who argued the allocation system favored large incumbent refrigerant producers over smaller reclaimers and independent suppliers.

Lower Court History

The U.S. Court of Appeals for the D.C. Circuit had previously rejected Choice Refrigerants' arguments, upholding the EPA's rule and drawing a comparison to earlier cap-and-trade systems used to phase out chlorofluorocarbons and hydrochlorofluorocarbons under the Montreal Protocol framework. The Supreme Court's denial of certiorari lets that D.C. Circuit ruling stand as the final word in the case, without the justices weighing in on the underlying constitutional question.

The nondelegation doctrine the petitioners sought to revive has rarely been used by the Supreme Court to strike down federal regulations, with the court generally giving Congress wide latitude to delegate implementation authority to expert agencies so long as it provides an "intelligible principle" to guide that authority. Critics of broad delegation have pushed in recent years for the court to apply the doctrine more aggressively, and the Choice Refrigerants case was viewed by some legal observers as a potential vehicle for that shift given the scale of market allocation authority Congress granted the EPA under the AIM Act.

Case Timeline

Choice Refrigerants filed its petition asking the Supreme Court to take up the case in March, and by April the case had drawn amicus support from 21 states as well as public interest organizations and legal experts weighing in on both sides of the underlying nondelegation question. The petition remained pending through the spring before the justices considered it at their June 18 conference and issued the denial in the order list released that Monday, closing out a case that had drawn national attention within environmental law and administrative law circles well beyond the refrigerant industry itself.

Reaction

The New Civil Liberties Alliance said it was "deeply disappointed" that the Supreme Court passed on the opportunity to revisit the nondelegation doctrine through the case. The organization had argued the case presented a clean vehicle for the court to place new limits on how much authority Congress can delegate to agencies like the EPA in administering complex market-allocation systems.

Why the Ruling Matters for the Refrigerant Market

The decision leaves the AIM Act's HFC allocation system fully intact heading into a period of continued transition toward lower-GWP A2L refrigerants across residential and commercial equipment lines. The allocation rule determines how much HFC supply producers and importers are permitted to bring into the U.S. market each year under the phasedown schedule, directly affecting refrigerant pricing and availability for contractors still servicing legacy R-410A systems during the transition period.

What's Next

With the Supreme Court declining review, the case is now concluded, and no further judicial avenue remains for Choice Refrigerants to challenge the allocation rule on the constitutional grounds raised in this petition. The ruling comes as separate litigation targeting a different piece of EPA refrigerant regulation — the agency's Technology Transitions Reconsideration Rule — is proceeding in the D.C. Circuit, filed by a coalition of HVACR trade associations. That case remains active and unaffected by the outcome in RMS of Georgia v. EPA, since it challenges a different rule under a different legal theory.