Saturday, July 21, 2012

Chicken Farmers' Challenge to EPA Standards Doesn't Cluck

A three-judge panel of the D.C. Circuit ruled in National Chicken Council v. EPA that the plaintiff's challenge of new EPA standards for renewable fuel wasn't justiciable, because a even a favorable ruling wouldn't redress the plaintiff's alleged injuries.

The case arose out of new EPA regs for renewable fuels, including (sometimes) ethanol, under the Energy Independence and Security Act of 2007.  That law grandfathered ethanol production plants that were in construction before December 19, 2007, but also said that "[f]or calendar years 2008 and 2009, any ethanol plant that is fired with natural gas, biomass, or any combination thereof is deemed to be in compliance . . . with the [new EISA standards]."  EPA said that the clause was ambiguous because it did "not specify whether [ethanol plants fired with natural gas and/or biomass]are deemed to be in compliance only for the period of 2008 and 2009, or indefinitely."  But it adopted the latter interpretation.

The Chicken Council sued, arguing that this will drive up ethanol production, thus driving up corn demand, thus increasing the price of corn, thus increasing the price of chicken farmers' feed.  The Council argued that the narrower interpretation--the former one--wouldn't have this effect.

The court didn't buy it.  It ruled that the Council failed to show a "substantial probability" that qualifying ethanol plants would reduce their ethanol production if the court ruled in the plaintiff's favor--that is, if the plants were subject to the narrower interpretation of the grandfather clause.  This was a simple matter of proof (or the petitioner's lack of proof); the court explained:

True, the EPA claimed in the Final Rule that "many of the current technology corn ethanol plants may find it difficult if not impossible to retrofit existing plants to comply with the [new regs]," and that "[g]iven the difficulty of meeting such threshold, owners of such facilities could decide to shut down the plant."  But that statement referred to all grandfathered plants, not just the qualifying ethanol plants, and there are good reasons to think the qualifying ethanol plants will find it much easier than the other, older grandfathered plants to meet the emissions-reduction requirement should they have to.  

The petitioners also cite several comments ethanol producers submitted during the rulemaking proceedings.  These comments assert it would be difficult to retrofit ethanol plants to meet the emissions-reduction requirement, but the comments do not satisfy the petitioners' burden of proof for one of two reasons: they are either not specific to qualifying ethanol plants, or they do not claim ethanol plants would be forced to shut down or reduce production if they had to coply with [the new standards].

Op. at 5-6.  The court said that the Council didn't produce the kind of evidence that supported standing in Duke Power Co. v. Carolina Environmental Study Group--the principal case that the Council relied on.  The Court in Duke Power held that a district court was not clearly erroneous in concluding that the plaintiffs showed a "substantial likelihood" of harm, where congressional testimony, legislative findings, and testimony in that case all pointed to harm, causation, and redressibility.  


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