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Energy and Environment Legal Institute v. Epel

United States District Court, D. Colorado

May 1, 2014

ENERGY AND ENVIRONMENT LEGAL INSTITUTE, and ROD LUECK, Plaintiffs,
v.
JOSHUA EPEL, JAMES TARPEY, and PAMELA PATTON, in their official capacities as Commissioners of the Colorado Public Utilities Commission, Defendants, and ENVIRONMENT COLORADO, CONSERVATION COLORADO EDUCATION FUND, SIERRA CLUB, THE WILDERNESS SOCIETY, SOLAR ENERGY INDUSTRIES ASSOCIATION, and INTERWEST ENERGY ALLIANCE, Intervenor-Defendants,

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' EARLY MOTION FOR SUMMARY JUDGMENT ON PLAINTIFFS' LACK OF STANDING

WILLIAM J. MARTÍNEZ, District Judge.

This action challenges the constitutionality of Colorado's Renewable Energy Standard statute, Colo. Rev. Stat. § 40-2-124. Specifically, Plaintiffs seek a declaration that particular provisions of this statute and their implementing regulations violate the Commerce Clause of the United States Constitution and seek injunctive relief preventing enforcement of those provisions. (Am. Compl. (ECF No. 163) pp. 40-45.)

Before the Court is Defendants' Early Motion for Summary Judgment on Plaintiffs' Lack of Standing (ECF No. 188) ("Motion"). For the reasons set forth below, the Motion is granted in part and denied in part.

I. LEGAL STANDARD

Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248-49 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal Serv., 812 F.2d 621, 623 (10th Cir. 1987).

A fact is "material" if it pertains to an element of a claim or defense; a factual dispute is "genuine" if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The Court must resolve factual ambiguities against the moving party, thus favoring the right to a trial. Houston v. Nat'l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).

II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Plaintiff Energy and Environment Legal Institute[1] ("EELI") is a non-profit organization dedicated to the advancement of rational, free-market solutions to land, energy, and environmental challenges in the United States. (Am. Compl. ¶ 3.) EELI also promotes coal energy, and believes that the impact human activities have had on the rise in global temperatures is an open question. (ECF No. 188 ¶ 3; ECF No. 194-1.) Plaintiff Rod Lueck is a member of EELI who resides in Colorado. ( Id. ¶ 4.) Mr. Lueck is the owner and president of Techmate, a financial services company based in Colorado. ( Id. ) Defendants Joshua Epel, James Tarpey, and Pamela Patton are members of the Colorado Public Utilities Commission. ( Id. ¶¶ 6-8.) Intervenor-Defendant[2] Solar Energy Industries Association is a trade association with member companies in Colorado and throughout the United States whose members are benefitting from the challenged statutes. (ECF No. 75.) For purposes of this Order, the Court's reference to "Defendants" includes the Solar Energy Industries Association.

In 2004, Colorado voters passed Amendment 37, which was intended to promote the development and utilization of renewable energy resources. ( Id. ¶ 60.) Amendment 37 is now codified as the Renewable Energy Standard statute (the "RES") at Colo. Rev. Stat. § 40-2-124. Plaintiffs' Amended Complaint brings six claims-three for declaratory relief and three for injunctive relief-alleging that three discrete provisions of the RES violate the Commerce Clause[3] of the United States Constitution. ( Id. ¶¶ 137-51.)

First, Plaintiffs challenge Colo. Rev. Stat. §§ 40-2-124(1)(c)(I), (V), (V.5) and 40-2-124(3), (4) and their implementing regulations codified at 4 Colo. Code Regs. §§ 723-3 et seq. (the "Renewables Quota"). The Renewables Quota requires each retail utility to generate, or cause to be generated, renewable energy resources in specified minimum amounts. ( Id. ¶¶ 137-141.) The Renewables Quota is structured so that the percentage of electricity that must be generated from renewable sources increases over time. The Renewables Quota started in 2007, and requires that each qualifying utility obtain at least 3 percent of its electricity from recycled or renewable sources. Colo. Rev. Stat. § 40-2-124(1)(c)(I)(A). The Renewables Quota increases every few years such that, by the year 2020, each qualifying retail utility[4] is required to obtain at least 30% percent of its energy from renewable sources. See Colo. Rev. Stat. § 40-2-124(1)(c)(I)(B)-(E).

Plaintiffs next challenge Colo. Rev. Stat. §§ 40-2-124(1)(c)(I)(C)-(E) and 40-2-124(1)(c)(V)(D) (the "Distributed Generation Provision"). The Distributed Generation Provision governs how much renewable energy must come from "distributed generation" sources. "Distributed generation" means renewable energy that is produced on the site of a customer's facility, or in a facility with a rating of less than thirty megawatts. See Colo. Rev. Stat. § 40-2-124(1)(a)(VIII). Like the Renewables Quota, the Distributed Generation Provision requires that an increasingly large percentage of the renewable energy generated by the utilities come from distributed generation sources. Colo. Rev. Stat. § 40-2-124(1)(c)(I)(C)-(E). In 2013-14, one percent of a utility's retail sales is required to come from distributed generation sources, with this percentage increasing to three percent by the year 2020. Id.

Finally, Plaintiffs challenge Colo. Rev. Stat. § 42-2-124(1)(c)(IX) (the "2:1 Provision"). The 2:1 Provision counts each kilowatt hour of renewable electricity generated by rural cooperative electrical associations and municipally owned utilities as two kilowatt hours, for purposes of the Renewables Quota. The 2:1 Provision is intended to "stimulat[e] rural economic development". Colo. Rev. Stat. § 42-2-124(1)(c)(IX).

Defendants previously filed a Motion to Dismiss which argued that Plaintiffs did not have standing to pursue their claims. (ECF Nos. 28.) The Court denied the Motion, finding that Plaintiffs had alleged sufficient facts to survive a Motion to Dismiss based on an alleged injury to unnamed electrical companies and an unnamed coal producer that are members of EELI. (ECF No. 64.) During discovery, Plaintiffs clarified that they were basing their standing to bring this action only on Alpha Natural Resources, Inc. and its related companies ("Alpha"), as well as Plaintiff Rod Lueck. (ECF No. 188-2.) Alpha is a mining company that operates two coal mines in Wyoming, and is a member of EELI. (ECF No. 188 at 4.) At this point, Plaintiffs are not claiming standing based on any electrical companies that are members of EELI. (ECF No. 188-2.)

On September 30, 2013, Defendants filed the instant Early Motion for Summary Judgment on Plaintiffs' Lack of Standing. (ECF No. 188.) Plaintiffs filed their response on October 21, 2013 (ECF No. 194), and Defendants filed their reply on November 18, 2013 (ECF No. 198). The Motion is now ripe for review.

III. ANALYSIS

Article III of the United States Constitution limits the jurisdiction of federal courts to "[c]ases" and "[c]ontrovers[ies]." U.S. Const. art. III, § 2. "No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 37 (1976).

"[T]he core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). "The gist of the question of standing" is whether the plaintiffs have "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." Baker v. Carr, 369 U.S. 186, 204 (1962). Standing "is perhaps the most important of the[] doctrines" limiting the federal judicial power. Allen v. Wright, 468 U.S. 737, 750 (1984).

There are two aspects to standing: constitutional standing and prudential standing. The Court will discuss each in turn below.

A. Constitutional Standing

"[T]he irreducible constitutional minimum of standing contains three elements": the plaintiff must have suffered a "concrete and particularized" injury that is "actual or imminent" ( i.e., an "injury in fact"), there must be "a causal connection between the injury and the conduct complained of, " and it must be "likely... that the injury will be redressed by a favorable decision." Lujan, 504 U.S. at 560-61 (quotation marks omitted); see also Allen, 468 U.S. at 751 ("A plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief."). "The party invoking federal jurisdiction bears the burden of establishing these elements." Lujan, 504 U.S. at 561.

As an association, Plaintiff EELI must establish standing by showing that one of its members has individual standing to challenge the disputed provisions. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 181 (2000) (an association has standing to bring suit on behalf of its members "when its members would otherwise have standing to sue in their own right, the interests at stake are germane to the organization's purpose, and neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit."). EELI asserts associational standing based ...


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