Union Oil Co. of California v. EPA

The Environmental Protection Agency (EPA) (defendant) regulated the lead content of gasoline under the Clean Air Act. In 1985 the EPA proposed a rule that reduced the amount of lead allowed in gasoline. The EPA also proposed supplementary regulations that would allow gasoline producers that lowered their lead content below the new threshold to bank lead credits for use if lead-content requirements were further lowered. While proposing its new regulations, the EPA held public hearings to explain the regulations and the EPA’s reasoning. The EPA also created a public docket containing documents related to its rulemaking, but it failed to make public an internal staff memorandum analyzing the impact the proposed regulations would have on California-based gasoline producers until after the notice-and-comment period had ended. California had its own lead standards separate from the EPA’s, which were stricter than the EPA’s standards. The EPA’s proposed lead-banking system did not allow gasoline producers to bank lead credits for reductions made to comply with state standards that were stricter than the federal standard. Union Oil Company of California and Beacon Oil Company (collectively, the oil companies) (plaintiffs) were gasoline producers based in California. The oil companies believed that the EPA’s proposed lead-credit system discriminated against producers from California. The oil companies alleged that the EPA had violated the Clean Air Act’s procedural requirements for rulemaking by failing to explain the basis of its proposed rule and for not making the memorandum publicly available.