Court Opinion

ID: 804784
Source: CourtListenerOpinion
Date Created: 2012-07-20 14:29:08+00
Date Added: 2024-06-11T18:00:13.602980
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 13, 2012               Decided July 20, 2012

                        No. 10-1107

            NATIONAL CHICKEN COUNCIL, ET AL.,
                      PETITIONERS

                              v.

           ENVIRONMENTAL PROTECTION AGENCY,
                     RESPONDENT

                  GROWTH ENERGY, ET AL.,
                      INTERVENORS

       On Petition for Review of Final Agency Action
          of the Environmental Protection Agency

    Catherine E. Stetson argued the cause for petitioners
National Chicken Council, National Meat Association, and
National Turkey Federation. With her on the briefs were
Mary Helen Wimberly, William L. Wehrum, and Lewis F.
Powell III.

     James B. Dougherty, Jonathan F. Lewis, Helen D. Silver,
and Ann B. Weeks were on the briefs for petitioners Friends of
the Earth, Inc. and National Wildlife Federation.
                                 2
    Daniel R. Dertke, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief was
Ignacia S. Moreno, Assistant Attorney General.

     John C. O’Quinn argued the cause for intervenors in
support of respondent. With him on the brief were William H.
Burgess, David B. Salmons, Sandra P. Franco, Bryan M.
Killian, Charles H. Knauss, Shannon S. Broome, Christopher
D. Jackson, Alex D. Menotti, Roger R. Martella, Jr., Thomas
G. Echikson, and Rachel D. Gray. Jeffrey B. Clark, Sr.,
Stuart A. Drake, and Thomas R. Lotterman entered
appearances.

   Alan Kashdan was on the brief for amicus curiae
Government of Canada in support of respondent.

    Before: HENDERSON, BROWN, and KAVANAUGH, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge BROWN.

     BROWN, Circuit Judge: The National Chicken Council,
National Meat Association, and National Turkey Federation
petition for review of EPA’s interpretation of a provision in
the Energy Independence and Security Act of 2007 (“EISA”).
Because the petitioners fail to show that a favorable ruling
would redress their claimed injuries, we dismiss their petition
on standing grounds.1

1
 This consolidated appeal originally also included Friends of the
Earth’s and National Wildlife Federation’s petitions for review, but
we granted their motion to voluntarily dismiss their petitions on
February 10, 2012.
                                3
     The EISA directed EPA to promulgate regulations
ensuring that transportation fuel sold in the United States
contains certain minimum levels of renewable fuel on an
average annual basis. See 42 U.S.C. § 7545(o)(2)(A)(i),
(o)(2)(B)(i). To fulfill that mandate, EPA modified its
existing trading program, under which producers generate
credits called Renewable Identification Numbers (“RINs”) for
each gallon of renewable fuel. See 40 C.F.R. § 80.1426. EPA
required refiners and importers of transportation fuel to
purchase the number of RINs needed to satisfy their
proportional share of the EISA’s annual targets. See 75 Fed.
Reg. 14,670, 14,676 (Mar. 26, 2010).2

     Ethanol qualifies as a “renewable fuel” under certain
circumstances.     Ethanol from a production plant that
commenced construction after December 19, 2007 (the date
of the EISA’s enactment) counts as renewable fuel if it
“achieves at least a 20 percent reduction in lifecycle
greenhouse gas emissions” in comparison to fossil fuels. 42
U.S.C. § 7545(o)(2)(A)(i). Ethanol from a plant that
commenced construction on or before December 19, 2007 is
not subject to that requirement; it counts as renewable fuel
whether it reduces emissions or not. Id. In policy speak,
these older ethanol plants are “grandfathered in.”

     The statutory provision at issue in this case is an
extension of the EISA’s grandfather clause. It states that,
“[f]or calendar years 2008 and 2009, any ethanol plant that is
fired with natural gas, biomass, or any combination thereof is
2
  For example, in 2012, the EISA’s annual renewable fuel target is
15.2 billion gallons. 42 U.S.C. § 7545(o)(2)(B)(i)(I). If a company
produces 10% of all transportation fuel produced in the United
States in 2012, then that company would have to obtain RINs
equivalent to 10% of the EISA’s 2012 renewable fuel target, or
1.52 billion gallons. See 75 Fed. Reg. at 14,676.
                                4
deemed to be in compliance . . . with the 20 percent reduction
requirement [in 42 U.S.C. § 7545(o)(2)(A)(i)].” 42 U.S.C. §
7545, Transition Rules.        In its Notice of Proposed
Rulemaking, EPA claimed the provision 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.” 74
Fed. Reg. 24,904, 24,925 (May 26, 2009). After considering
public comments, EPA adopted the latter interpretation in its
Final Rule. It read the provision to mean that ethanol plants
fired with natural gas and/or biomass that commenced
construction in 2008 or 2009 (“qualifying ethanol plants”) are
deemed compliant with the 20 percent greenhouse gas
reduction requirement “indefinitely.” 75 Fed. Reg. at 14,688.
Functionally, that meant qualifying ethanol plants could
generate RINs indefinitely without having to ensure that their
ethanol met the emissions-reduction requirement.

     The petitioners argue EPA’s interpretation of the
provision is inconsistent with the statutory text, and they ask
us to set it aside. To establish their Article III standing to
seek such relief, they must show that they have suffered (or
will soon suffer) a “concrete” injury in fact; that their injury is
or will be “fairly . . . trace[able]” to EPA’s interpretation of
the provision; and that there is a “substantial likelihood” their
injury would be redressed if we set EPA’s interpretation
aside. Vermont Agency of Natural Res. v. United States ex
rel. Stevens, 529 U.S. 765, 771 (2000).

     The petitioners represent members of the meat industry
who purchase corn to use as animal feed. Their theory of
injury rests on three factual claims: (1) by permitting
qualifying ethanol plants to generate RINs indefinitely
without having to meet the emissions-reduction requirement,
EPA’s interpretation of the provision will lead qualifying
                               5
ethanol plants to produce more ethanol than they otherwise
would have; (2) this increase in ethanol production by
qualifying ethanol plants will lead to an increase in the overall
demand for corn; and (3) this increase in overall corn demand
will lead to an increase in the price of corn. The petitioners
contend their injury would be redressed if we vacated EPA’s
interpretation because a narrower interpretation would cause
qualifying ethanol plants to reduce ethanol production,
thereby decreasing corn demand and reducing the price of
feed.

     After oral argument, we ordered the parties to submit
supplemental briefs (and affidavits, if needed) on standing.
See Feb. 14, 2012 Order. As we stated in that Order, under
Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir. 2002), the
petitioners can only meet their burden of proof on the
redressability element of standing if they “set forth specific
facts in the form of an affidavit or other evidence which show
a substantial probability that vacatur of [EPA’s interpretation]
would cause corn prices to [fall].” Feb. 14, 2012 Order, at 1.

     We now find the petitioners have fallen short. If we were
to vacate EPA’s interpretation, the only consequence for
qualifying ethanol plants is that they would no longer be able
to generate RINs without complying with the EISA’s
emissions-reduction requirement. The petitioners fail to show
a “substantial probability” that qualifying ethanol plants
would reduce their ethanol production as a result of that
change. True, 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
20 percent [greenhouse gas] reduction threshold,” and that
“[g]iven the difficulty of meeting such threshold, owners of
such facilities could decide to shut down the plant.” 75 Fed.
Reg. at 14,689–90. But that statement referred to all
                               6
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. See Declaration of Geoff
Cooper, ¶ 9 (deeming it “very likely” the qualifying ethanol
plants could meet the emissions-reduction requirement
because of their more advanced and eco-friendly processes).

     The petitioners also cite several comments ethanol
producers submitted during the rulemaking proceeding. See
Petitioners’ Supplemental Br. 2–4. 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 comply with the
emissions-reduction requirement to generate RINs. Read
most generously for the petitioners, the comments establish
that some grandfathered ethanol plants might struggle to meet
the emissions-reduction requirement, and some of those plants
might be forced to shut down as a result. They do not
establish a substantial probability that qualifying ethanol
plants would be forced to close down or reduce corn demand,
and they are not nearly as strong as the evidence found
sufficient to confer standing in Duke Power Co. v. Carolina
Environmental Study Group, Inc., 438 U.S. 59 (1978), the
case on which the petitioners rely most heavily.

    We should not be understood to foreclose any challenge
to EPA’s interpretation of the provision; a different petition,
properly supported, could allow us to address the merits of
EPA’s reading. But the petitioners here have failed to
                            7
establish their standing, and their petition for review is
accordingly

                                               Dismissed.