Climbing the Ladder of Statutory Interpretation: Why Skipping Rungs Collapses the Structure of the Statute
Courts are in the business of saying what the law is, not what the law should be. Congress is in charge of writing statutes that are understandable and don’t leave holes where agencies—or courts—decide to put their creative touch on the wording. But Congress is not perfect, and statutes get passed that look like a roadmap with a hole cut out of the middle. Yet courts are not entitled to patch their brethren’s mistakes with what they believed the statute really meant. This type of infidelity to the meaning of what’s written causes real-life hardship to entities affected by the statute, and NCLA’s client Choice Refrigerants witnessed this firsthand.
Who is Choice Refrigerants?
Choice Refrigerants, an innovative refrigerant company harmed by the American Innovation in Manufacturing Act (“AIM Act”), challenged EPA’s interpretation of a statute with a hole in it. The statute devises a plan as to how a particular product is phased down in the refrigerant industry. In order to continue to utilize this product, companies must have an “allowance.” Think of an allowance given to a child for completing chores. The issue with the AIM Act is that it does not say to whom the allowance is to be given. Does the allowance only go to the children who live under that roof? The neighborhood kids? All the kids in a 20-mile radius? Choice Refrigerants sued to demand clarity on the matter because its allowances were reduced more significantly than anticipated, harming its business. The crux of the case relies on proper statutory interpretation to determine whether Congress did its job or outsourced its lawmaking authority.
How should a statute be interpreted?
There are many “canons” of statutory interpretation, which are guidelines as to how statutory text should be read. One canon called the “plain meaning rule” means to not overthink the statutory terms—assess what the term means on its face; “constitutional avoidance” means reading a statute to avoid running afoul of the Constitution; another canon titled ejusdem generis notes the similarities of groupings of terms and confines the statute by the enumerated list. Every word, punctuation mark, and cross-reference is meaningful.
There is also a sequence to reading a statute that makes the most sense. First, start with the text of the statute. Is it clear? If the answer is yes, stop there. If the answer is no, there are other considerations. What is the title? Does the statute cross-reference portions of other statutes? Does the statute explicitly leave out portions of statutes it has cross-referenced? What is the context? Legislative history should be the last reference to decipher an unclear statute. Legislative history has been coined “losers’ history” since legislators that perhaps failed to get their preferred language passed can muddy the waters of the statute’s actual meaning by tossing in a few lines on the record. Statutes are meant to stand on the text alone, and entertaining the rationale of dozens of drafters makes statutory interpretation fit for a detective, not a judge. Assessing legislative history out the gate is an unworkable methodology.
How was Choice Refrigerants harmed by statutory misinterpretation?
The D.C. Circuit made several errors when interpreting the AIM Act, all which harm Choice Refrigerants.
First, not only did the D.C. Circuit defer to EPA’s understanding of the Act, it claimed that the AIM Act’s “text, structure, and history demonstrate that Congress intend for the EPA to model its cap-and-trade program on similar programs established under the Clean Air Act[.]” How did the Court reach this conclusion? “[L]egislative history demonstrates that the AIM Act was ‘modeled on’ Title VI of the Clean Air Act[,]” and the “strong similarity between the programs created by the AIM Act and Title VI[.]” To make matters worse, the legislative history the Court speaks of is on a bill that was never passed.[1] Additionally, the AIM Act explicitly incorporated other portions of the Clean Air Act, but not Title VI. If Congress has enough wherewithal to specifically spell out other portions of the Clean Air Act it wanted adopted under the AIM Act, it could have said to include Title VI but chose not to. This misinterpretation went so poorly it effectively rewrote the statute, which is not the role of the court.
Second, the Court stated, “to the extent that 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.” Here, the Court has weaved a very tangled web and caught itself in it. Paragraphs prior, the Court was certain the similarities between the AIM Act and Clean Air Act devised a clear path for parties to interpret the statute, yet the first step in assessing whether to employ constitutional avoidance is admitting the text is ambiguous and open to more than one reading. So, which is it? This type of fabricated confusion opens the door to the Court writing its own interpretation in the name of constitutional avoidance and is not proper.
Choice Refrigerants was not made whole by this type of pick and choose statutory interpretation and is still saddled with the same problem it sought relief from—Congress delegating its lawmaking power to EPA. EPA has wielded that unconstitutional power by withholding the proper number of allowances Choice Refrigerants needs to maintain a thriving business. The mishandling of the AIM Act by the D.C. Circuit is grounds for a petition for certiorari. NCLA is hopeful the Supreme Court will continue to clarify its nondelegation jurisprudence and believes Choice Refrigerants’ case is the proper vehicle.
[1] https://www.congress.gov/event/116th-congress/house-event/110388; https://www.congress.gov/bill/116th-congress/house-bill/5544/all-actions
October 15, 2025