The endless variety of federal regulatory programs are subject to the requirements of federal administrative law, i.e., the Administrative Procedures Act (APA). The APA is chiefly the province of the U.S. Court of Appeals for the District of Columbia Circuit. In a recent case involving the U.S. Department of Energy’s (DOE) implementation of a clean energy loan program, the District Court believed, following the conclusion of hearings in the court, that appropriate redress would result if the complaint was remanded, at DOE’s request, for additional review by DOE. When those proceedings were unsuccessful, the District Court dismissed the complaint. The Court of Appeals has now ruled that the requested remand should not have been granted, consistent with earlier precedential rulings by the Court of Appeals.

On May 19, in Limnia, Inc., v. U.S. Department of Energy, the Court of Appeals, returning the matter to the District Court to resolve Limnia, Inc.’s challenge to DOE’s denial of its clean-energy loan applications, confirmed that although “[a] district court has broad discretion to decide whether and when to grant an agency’s request for a voluntary remand,” “a voluntary remand is typically appropriate only when the agency intends to revisit the challenged agency decision on review.” In Limnia, the DOE, instead, “offered to review any new applications Limnia chose to submit, assuming that Limnia remitted the then-required application fees” “even though a central allegation of Limnia’s complaint was that the Department had waived the application fee associated with the Loan Guarantee Program.“

Limnia, a manufacturer of battery systems in electric cars, twice filed applications for clean-energy loans pursuant to a federal clean energy loan program administered by DOE. DOE “provides loans and other financial support to companies that produce clean-energy vehicles and related technologies” under various statutory programs. However, DOE rejected both applications in 2009 and, Limnia, believing these rejections were the result of a process “infected by bias and favoritism,” filed a lawsuit challenging these rejections as being contrary to the APA because they were not based on merit or technical specifications.

The District Court denied DOE’s motion to dismiss the APA claim, but it did grant DOE’s motion for a voluntary remand to the DOE to allow Limnia an opportunity to submit new applications. In so doing, the District Court stayed Limnia’s APA action so that it could supervise the progress of the new DOE proceedings. These proceedings were unsuccessful, and the District Court, facing Limnia’s refusal to submit new applications, relinquished jurisdiction and closed the case.

Limnia’s appeal followed with Limnia arguing that the District Court was wrong to grant DOE’s voluntary remand request because DOE did not intend to revisit the challenged agency decisions on review. The Court of Appeals confirmed that the District Court erred when it granted the DOE’s request for a voluntary remand when it was clear that DOE was not inclined to take further action with respect to “the original agency action on review.” The agency “ordinarily does at least need to profess intention to reconsider, re-review, or modify the original agency decision that is the subject of the legal challenge.” The Court of Appeals was convinced that DOE did not sufficiently profess its intention to do so and therefore a voluntary remand to DOE was not warranted.