Monday, August 20, 2012

D.C. Circuit: No Standing to Challenge EPA Fuel Regs

A sharply divided three-judge panel of the D.C. Circuit ruled on Friday in Grocery Manufacturers Ass'n v. EPA that three trade associations lacked standing to challenge EPA's "partial" waivers allowing the introduction of a new ethanol biofuel.

The ruling means that EPA's waivers stand, allowing the introduction of an unleaded gasoline blend containing 15 percent ethanol for use in model-year 2001 and newer light-duty motor vehicles and engines.  The case also deepens a circuit split on the question whether prudential standing is jurisdictional (and therefore reviewable even if a party doesn't challenge it).  The panel majority said yes--a holding that seems in tension with the direction of both the Supreme Court and the circuit itself. 

Between these two issues--the underlying issue of EPA's authority to issue waivers for a new biofuel, and the issue whether prudential standing is jurisdictional--this case may make a good candidate for Supreme Court review.

The case arose out EPA's "partial" waivers of the Clean Air Act provision that prohibits manufacturers from introducing into commerce "any fuel or fuel additive for use by any person in motor vehicles manufactured after model year 1974 which is not substantially similar to any fuel or fuel additive" used in the federal emissions certification of those vehicles.  42 U.S.C. Sec. 7545(f)(1)(B).  The CAA allows the EPA to grant a waiver, however, if it "determines that the applicant has established that such fuel or fuel additive or a specific concentration thereof, and the emission products of such fuel or fuel additive or specified concentration thereof, will not cause or contribute to a failure of any emission control device or system . . . to achieve compliance by the vehicle or engine with the emission standards with respect to which it has been certified."  42 U.S.C. Sec. 7545(f)(4) (emphasis added).

The waivers allowed manufacturers to introduce a new biofuel, E15 (an unleaded gasoline blend containing 15 percent ethanol), for light-duty motor vehicles and engines with a model year 2001 and newer.  (E10, a different ethanol blend with just 10 percent ethanol, is already on the market.  Put simply: E15 uses more corn.)

The plaintiffs, three different trade associations, sued, arguing, among other things, that EPA lacked authority to grant a "partial" waiver.  (See (f)(4), above, and the phrase "any emission control device or system.")  An intervenor argued that the plaintiffs lacked standing.

(Note that the government challenged neither Article III standing nor prudential standing.  Under well settled law, the court can still address Article III standing, because it's jurisdictional.  But the panel split on whether the court could address prudential standing: the majority wrote that it could (because it's jurisdictional); the dissent wrote that it could not (because it's not jurisdictional).  (Judge Tatel wrote that circuit precedent required the court to rule that it's jurisdictional, even though the weight of authority seems to be going the other way.)

Chief Judge Sentelle and Judge Tatel agreed that two of the three trade associations lacked Article III standing, because their claimed harms were too far removed from the EPA's partial waivers.  (The engine-products group claimed that EPA waivers would cause E15 to enter the market and cause damage to certain engines and create liability for those engine manufacturers.  The court held that this was neither "concrete and particularized" nor "actual or imminent."  The petroleum group claimed that the waivers would require refiners and importers to introduce E15 into commerce (because there'd be no other way to meet increasing renewable fuel requirements under federal law) and downstream firms to accommodate E15.  The court said that the waivers caused neither of these results.)

They also agreed that the third plaintiff, the food producers, lacked prudential standing, because their interests weren't within the zone of interests to be protected or regulated by the statute.  They said that the food producers, which argued that the waiver would cause corn prices to rise, drew on an interest protected by a different statute, not the CAA.

Judge Kavanaugh argued in dissent that both the food producers and the petroleum group had Article III standing, that prudential standing was non-jurisdictional, and that even if prudential standing were jurisdictional both had it. 

(Judge Tatel agreed that the food producers had Article III standing, but because Judge Tatel also agreed with Chief Judge Sentelle that they lacked prudential standing, the case is dismissed.)

Judge Kavanaugh went on to argue that the EPA lacked authority to grant the partial waivers.


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