On June 24, 2013, the U.S. Supreme Court ended a dispute between
the ethanol industry and trade groups over U.S. EPA's approval
of the use and sale of gasoline blended with 15 percent ethanol.
Grocery Mfrs. Ass'n v. EPA, No. 12-1055; Alliance of Auto.
Mfrs. v. EPA, No. 12-1167; Am. Fuel & Petrochemical Mfrs. v.
EPA, No. 12-1229. Following of a decision by the D.C. Circuit
holding that the trade groups lacked standing to challenge
EPA's approval of E15, various trade associations representing
stakeholders in the engine manufacturing, petroleum, and food
industries filed petitions for writ of certiorari with the Supreme
Court. The Supreme Court denied those petitions, handing a victory
to the ethanol industry.
The dispute stemmed from EPA's statutory duty to approve the
introduction of most new renewable fuels. The Renewable Fuel
Standard ("RFS") of the Clean Air Act requires qualifying
refiners and importers of fuel to bring to market an increasing
volume of renewable fuels. Unless a new renewable fuel is
"substantially similar" to fuels used in the federal
emissions certifications for motor vehicles manufactured after
model year 1974, a fuel manufacturer must apply to EPA for a waiver
before introducing the new renewable fuel. 42 U.S.C. §
7545(f)(4).
In March 2009, Growth Energy, an ethanol industry trade group,
applied for a waiver to introduce E15. In the first of two waiver
decisions, EPA approved the introduction of E15 for use in
light-duty motor vehicles for model year 2007 and later. See
"Partial Grant and Partial Denial of Clean Air Act Wavier
Application Submitted by Growth Energy to Increase the Allowable
Ethanol Content of Gasoline to 15 Percent," 75 Fed. Reg.
68,094 (Nov. 4, 2010). It denied the waiver for all model-year 2000
and earlier vehicles. Because it was awaiting further testing
results from the Department of Energy, EPA deferred its decision
for model-years 2001 through 2006 light-duty motor vehicles. After
receiving those results, EPA issued a second partial waiver,
permitting the use of E15 in light-duty motor vehicles from
model-years 2001 through 2006. "Partial Grant of Clean Air Act
Wavier Application Submitted by Growth Energy to Increase the
Allowable Ethanol Content of Gasoline to 15 Percent," 76 Fed.
Reg. 4662 (Jan. 26, 2011).
The three industry groups subsequently petitioned the D.C. Circuit
to review EPA's E15 waivers. Growth Energy intervened in
support of EPA. In August 2012, in a split decision, the D.C.
Circuit dismissed the petitions for lack of jurisdiction. See
Grocery Mfg. Ass'n v. EPA, 693 F.3d 169 (2012). Writing for the
court, Chief Judge Sentelle concluded that none of the petitioners
had standing to bring a claim against EPA.
The engine manufacturers argued that E15 may harm their engines
and expose them to warranty and safety-related lawsuits by
consumers and the government. Chief Judge Sentelle rejected both
arguments, noting that the engine manufacturers had provided
"no support for their assertion that E15 'may' damage
the engines" and that any potential injury resulting from
lawsuits depended on the intervening acts of third parties not
before the court. Chief Judge Sentelle similarly rejected arguments
of the petroleum trade associations that the partial approval of
E15 effectively compelled their members to incur substantial costs
to introduce and/or accommodate E15. The court reasoned that the
petroleum trade petitioners had failed to establish that the
partial waiver, and not economic forces, would force importers,
refiners, and downstream entities to introduce or handle E15.
Decisions to import, refine, or handle E15 are thus the product of
self-interest and not any particular administrative action.
In contrast to the dismissal of the engine-manufacturer and
petroleum groups' claims for failing to establish Article III
standing, the D.C. Circuit dismissed the food group's petition
on prudential standing grounds. The food group could not show that
the interest it sought to protect—prices its members were
required to pay for corn—was arguably within the zone of
interests protected or regulated by the statute in question or any
provision integrally related to it.
Judge Kavanaugh dissented on multiple grounds and would have
struck down EPA's waivers as plainly running afoul of the
statutory text of the Clean Air Act.
After being rebuffed by the three-member panel in the D.C.
Circuit, petitioners separately sought panel rehearing or hearing
en banc, which were denied on January 13, 2013. Shortly thereafter,
petitioners filed petitions for writ of certiorari. In their
petitions, the trade associations argued that the D.C.
Circuit's decision conflicted with Supreme Court precedent
regarding Article III and prudential standing. Petitioners also
contended that the Supreme Court should grant certiorari to
determine whether EPA had forfeited its ability to challenge the
food group's prudential standing by failing to raise the issue.
In response, EPA argued that the D.C. Circuit properly applied
Supreme Court precedent and that the fact-specific inquiry
undertaken by the D.C. Circuit was not suited to review by the
Supreme Court. EPA also noted that petitioners did not timely
preserve in the D.C. Circuit their argument that EPA had forfeited
prudential standing.
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