United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED January 8, 2024 No. 22-60146 Lyle W. Cayce ____________ Clerk

State of Louisiana; State of Alabama; State of Arkansas; State of Kentucky; State of Missouri; State of Montana; State of Oklahoma; State of South Carolina; State of Tennessee; State of Texas; State of Utah,

Petitioners,

versus

United States Department of Energy; Jennifer Granholm, Secretary, U.S. Department of Energy,

Respondents. ______________________________

On Petition for Review of an Order of the Department of Energy Agency No. EERE-2021-BT-STD-0002 87 Fed. Reg. 2673 (Jan. 19, 2022) ______________________________

Before Clement, Oldham, and Wilson, Circuit Judges. Andrew S. Oldham, Circuit Judge: In 2022, the Department of Energy tightened the regulatory regime surrounding America’s dishwashers and laundry machines. Petitioners sued. The Department’s actions were arbitrary and capricious. So we grant the petition and remand to the Department. Case: 22-60146 Document: 00517025750 Page: 2 Date Filed: 01/08/2024

No. 22-60146

I. In 2018, the Competitive Enterprise Institute (“CEI”) submitted a petition for rulemaking to the Department of Energy (“DOE” or the “Department”). See 5 U.S.C. § 553(e) (“Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.”); see also Petition for Rulemaking on a New Product Class of Fast Dishwashers, 83 Fed. Reg. 17771 (Mar. 21, 2018) (“CEI Petition”). According to CEI, the Department’s burdensome energy regulations made dishwashers incapable of, well, washing dishes. CEI asked the Department to define a new class of dishwashers under the Energy Policy and Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871, codified (as amended) at 42 U.S.C. §§ 6201 et seq. (“EPCA”). CEI proposed that the new class should be comprised of dishwashers with a normal cycle duration of under one hour. See 42 U.S.C. § 6295(a)(2) (empowering the DOE to define new classes of regulated appliances). CEI anticipated that the new class might offer better performance than currently available machines in part because it would not need to comply with the energy and water restrictions otherwise applicable to consumer dishwashers today. See CEI Petition, 83 Fed. Reg. at 17776. DOE responded favorably to CEI’s petition. It published a Notice of Proposed Rulemaking (“NPRM”) under the Administrative Procedure Act (“APA”). See NPRM, 84 Fed. Reg. 33869 (July 16, 2019). The NPRM proposed the new dishwasher class that CEI had requested. See ibid. In October 2020, the DOE adopted a final rule defining the class as “standard residential dishwashers with a cycle time for the normal cycle of one hour or less from washing through drying.” See Establishment of a New Product Class for Residential Dishwashers, 85 Fed. Reg. 68723 (Oct. 30, 2020) (the “2020 Dishwasher Rule”).

2 Case: 22-60146 Document: 00517025750 Page: 3