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JUDGES TELL ETHANOL CRITICS TO PROVE THEY'RE BEING HARMED

Published: Wed. Apr 18th, 2012

Well color me surprised! Here's another instance where judges have decided that they won't be wasting time in their courts hearing frivolous arguments. Can we credit a tough economy for adding a little common sense back to our system? Are enough people tired of hearing the whining about nebulous topics when there's real harm being done? Whatever the reason, we're pleased with the outcome, as a group of Federal Appellate judges have told the Grocery Manufacturers and others to get their ducks in a row before they come back to court.
Here's the back story. Anti-ethanol industry groups (think anyone that's interested in buying cheaper corn) brought a lawsuit that claimed that the waiver to allow ethanol blended into our nation's fuel supply up to a 15% level (instead of the arbitrary 10% cap) brought harm to their industry. On April 17th, Federal appellate judges pressed several industry groups during oral arguments to explain exactly how they were harmed by two Environmental Protection Agency (EPA) waivers allowing gasoline to contain up to 15 percent ethanol (E15).
The complaining industry groups representing petroleum producers and suppliers, engine and automobile manufacturers, and food producers petitioned the U.S. Court of Appeals for the District of Columbia Circuit, asking the court to overturn the EPA waivers. However, during oral arguments the judges repeatedly asked the industry groups to demonstrate their standing to bring the lawsuits against EPA.
This is great news. Because unless the industry groups can prove the harm (standing), the case cannot continue. To prove standing the industry groups have to demonstrate to the DC Circuit sufficient connection to and harm from the two EPA waivers. If standing cannot be demonstrated then the case will be dismissed without consideration of the merits of the claims.
That legal industry speak translates to this: "Unless you guys can prove you have a black eye, quite your bellyaching and go home."
And that's good news for E-15.
For those of you interested in more details, please keep reading.

 

D.C. Circuit Judges Press Industry Groups To Show Standing in Ethanol Waiver Lawsuit

By Andrew Childers

 

  • · Grocery Manufacturers Ass'n v. EPA, D.C. Cir., No. 11-1072, 4/17/1
  • · Key Development: D.C. Circuit judges questioned whether several industry groups had standing to bring lawsuits challenging two Clean Air Act waivers allowing use of E15 in newer vehicles.
  • · Potential Impact: Unless the industry groups can demonstrate they have standing, the judges will not be able to address the merits of their arguments.

 

Federal appellate judges pressed several industry groups during oral argument April 17 to explain how they were harmed by two Environmental Protection Agency waivers allowing gasoline to contain up to 15 percent ethanol (E15) (Grocery Manufacturers Ass'n v. EPA, D.C. Cir., No. 11-1072, oral arguments 4/17/12).

 

Several industry groups representing petroleum producers and suppliers, engine and automobile manufacturers, and food producers petitioned the U.S. Court of Appeals for the District of Columbia Circuit, asking the court to overturn the EPA waivers. However, during oral arguments the judges repeatedly asked the industry groups to demonstrate their standing to bring the lawsuits against EPA.

“You have an excellent argument on merits. My problem is getting there,” Chief Judge David Sentelle told attorneys for the industry groups.

EPA has granted two partial waivers under the Clean Air Act allowing E15 to be used in model year 2001 and newer vehicles in response to requests from ethanol producers (75 Fed. Reg. 68,094; 76 Fed. Reg. 4662).

The industry groups said EPA lacks the authority under Section 211(f)(4) to grant the partial waivers. EPA had never previously issued a partial waiver for a fuel additive under Section 211.

The various industry groups sued EPA in 2011.

Judges Question Standing

The industry groups must demonstrate they have standing before the judges can address the merits of their arguments. The three-judge panel spent the bulk of oral argument on the standing issues.

The Grocery Manufacturers Association and other food producers said EPA's ethanol waivers will increase the demand for corn, therefore increasing costs to their members.

Engine and automobile manufacturers such as the Alliance of Automobile Manufacturers and Association of Global Automakers said the higher ethanol content could erode emissions controls, even in newer vehicles. That could lead to EPA recalling those cars and trucks, or it could void vehicle warranties, they said.

The American Petroleum Institute and other petroleum groups said the ethanol waiver combined with the renewable fuel standard requirements in the Energy Independence and Security Act effectively will force them to produce E15.

EPA did not dispute the industry groups' standing to bring the lawsuits. However, Growth Energy, an ethanol trade group that intervened the lawsuits on behalf of EPA, argued none of the petitioners were harmed by the waivers.

Randolph Moss, a partner at WilmerHale representing Growth Energy, called the waivers a “deregulatory act” that does not burden the industry groups.

“There's nothing in the waiver that requires the marketing of E15,” he said. “It removes a barrier. They're still free not to market it.”

Statute Turns on ‘Any.'

If the industry groups convince the three-judge panel they have standing, the merits of the lawsuit could turn on the placement of “any” in Section 211(f)(4). The statute requires that EPA ensure fuel additives such as ethanol “will not cause or contribute to failure of any emission control device or system … to achieve compliance by the vehicle or engine with the emission standards.”

The industry groups argued the statute should be read to prevent EPA from granting the E15 waiver if it would prevent any vehicle in the fleet from meeting the emissions standards. If higher ethanol were to interfere with the performance of any vehicle, EPA would be precluded from granting the waiver under that reading.

Catherine Stetson, a partner at Hogan Lovells LLP representing the food producers, said additional testing would show that E15 would cause emissions controls in newer vehicles to fail.

“Our merits argument is EPA didn't do its job,” she said.

However, Jessica O'Donnell, the Justice Department attorney representing EPA, said the word “any” only refers to the particular vehicles and their emissions controls. That would give EPA the authority to issue partial waivers allowing some vehicles to use gasoline with a higher ethanol content, she said.

Sentelle said he had some concerns with EPA's interpretation because the text of the statute does not explicitly give the agency the authority to issue partial waivers for fuel additives.

“I think you have to show that you can do it under the statute. … What we're trying to find out is where the statute says you can,” he said.

 
 
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