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Limnia, Inc. v. United States Department of Energy

United States Court of Appeals, District of Columbia Circuit

May 19, 2017

Limnia, Inc., Appellant
v.
United States Department of Energy and Rick Perry, in his official capacity as Secretary of U.S. Department of Energy, Appellees

          Argued March 22, 2017

         Appeal from the United States District Court for the District of Columbia (No. 1:13-cv-00037)

          John J. Vecchione argued the cause for appellant. With him on the briefs were Joshua N. Schopf and R. James Valvo, III.

          Joshua Waldman, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief was Michael S. Raab, Attorney.

          Before: Garland, Chief Judge, and Griffith and Kavanaugh, Circuit Judges.

          OPINION

          Kavanaugh, Circuit Judge.

         The U.S. Department of Energy provides loans and other financial support to companies that produce clean-energy vehicles and related technologies. The Department does so under various statutory programs, including the Loan Guarantee Program and the Advanced Technology Vehicles Manufacturing loan program. To receive a loan or loan guarantee from the Department, companies must submit applications to the programs. The Department then evaluates the applications for compliance with statutory requirements and technical merit.

         Limnia is a company that specializes in the production of battery systems for electric cars. In 2009, Limnia submitted two loan applications to the Department. The Department rejected Limnia's applications.

         Limnia sued the Department in the District Court. As relevant here, Limnia alleged that the Department's rejection of Limnia's applications was unlawful under the Administrative Procedure Act. Before the District Court could decide Limnia's case on the merits, however, the Department asked for the case to be remanded back to the agency. The District Court granted the Department's voluntary remand request, returning Limnia's case to the agency and closing Limnia's judicial action. We must determine whether it was proper for the District Court to do so.

         Limnia argues that the District Court was wrong to grant the Department's voluntary remand request. That is so, according to Limnia, because the Department did not intend to revisit the challenged agency decisions on review. Rather, the Department sought the remand on the basis that Limnia could submit brand new applications for agency review. Limnia contends that, with the case in that posture, the District Court's decision to grant the voluntary remand request functioned as a dismissal of Limnia's APA claims.

         We agree with Limnia. A district court has broad discretion to decide whether and when to grant an agency's request for a voluntary remand. But a voluntary remand is typically appropriate only when the agency intends to revisit the challenged agency decision on review. That prerequisite was not met in this case. We therefore reverse the order of the District Court and remand the case to the District Court for further proceedings consistent with this opinion.

         I

         The U.S. Department of Energy oversees various loan programs designed to spur the development and production of clean-energy technologies. This case involves two such programs: the Loan Guarantee Program and the Advanced Technology Vehicles Manufacturing loan program. See 42 U.S.C. § 16511 et seq.; id. § 17013. Under those programs, companies involved in the development of eligible clean-energy technologies may apply to the Department for direct financial support in the form of loans or loan guarantees.

         Petitioner Limnia, Inc., develops battery systems for use in electric cars. In early 2009, Limnia applied for a loan guarantee under the Loan Guarantee Program. Around the same time, Limnia submitted an application seeking a $15 million loan under the Advanced Technology Vehicles Manufacturing loan program.

         Following some back and forth with Limnia, the Department denied Limnia's applications. The Department rejected Limnia's Loan Guarantee Program application due to Limnia's failure to pay the required application fee. As for Limnia's application to the Advanced Technology Vehicles Manufacturing loan program, the Department denied the application on the basis that Limnia's battery system did not satisfy the program's statutory requirements.

         Limnia disagrees with the Department on both fronts. It claims that the Department was wrong to deny the Loan Guarantee Program application for non-payment of the application fee. Limnia alleges that the fee had been waived by then-Secretary of Energy Steven Chu. Limnia also contends that its battery system clearly met the statutory requirements for the Advanced Technology Vehicles Manufacturing loan program. Limnia asserts that the Department's explanations to the contrary were mere pretext contrived by the Department to mask a review and decision-making process infected by political bias and favoritism. Limnia sued in the District Court to challenge what it viewed as the Department's wrongful denial of the 2009 applications.

         As relevant here, Limnia's complaint alleged that the Department's 2009 decisions to deny Limnia's applications violated the Administrative Procedure Act. Limnia asserted that the denials were arbitrary and capricious because they were based not on merit or other technical specifications, but on political favoritism and cronyism. Limnia also alleged that the Department administered the Loan Guarantee Program in an inconsistent and ad hoc manner. As an example, Limnia cited the ...


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