Appeals Court Dismisses API, EPG E15 Label Suit

Rules that refiners don't have standing to sue, calls arguments "conjectural"

E15 (CSP Daily News / Convenience Stores / Gas Stations)

WASHINGTON -- The U.S. Court of Appeals for the District of Columbia on October 21 dismissed the lawsuit brought by the American Petroleum Institute (API) and the Engine Products Group (EPG) (a coalition of auto industry groups) challenging the U.S. Environmental Protection Agency's (EPA) rule requiring labels on pumps dispensing E15 to warn consumers of the dangers of misfueling, according to a report by the Society of Independent Gasoline Marketers of America (SIGMA).

The court did not address the merits of the suit, said the report, but dismissed it because the petitioners did not demonstrate that they were harmed sufficiently by the rule.

In their decision to throw out the suit, the judges said the groups did not have standing "because they cannot show that their members have suffered or are threatened with suffering in injury in fact that is traceable to the regulation and redressable by a favorable decision" requiring EPA to review the rule.

API and the coalition had previously challenged EPA's decision approving the introduction of E15 (a gasoline blend with 15% ethanol) for certain vehicles and engines. The court also dismissed that petition for lack of standing. Because the arguments in the labeling case were similarly "flawed" to those in the initial suit, the court said it was bound to reach the same conclusion of lack of standing in the current suit.

API had argued that its standing was self-evident because its members are the object of the regulation, "which directly imposes regulatory restrictions, costs, and liabilities" on individuals and companies that sell E15. The court stated, however, that based on API's own polling, none of its members currently sell E15 or are contemplating entering the market and that their decision would depend on the validity of EPA's labeling rule--thus API failed to show exposure to a risk of injury adequate to qualify for standing in the suit.

The petitioners--specifically engine product manufacturers--further argued that sales of E15 will damage automobiles, exposing auto manufacturers to warranty claims, product liability lawsuits, recalls and reputational injury.

Here, said the report, the court similarly ruled that coalition members provided no evidence that E15 has displaced or is likely to displace E10 "in such a way as to drive consumers to use E15 for want of adequate E10 supplies." Thus, the court stated, "its assertion that certain vehicle and equipment owners will 'have no choice' but to fuel their products with E15 in markets where E10's availability is limited is 'conjectural' and 'hypothetical' rather than 'actual or imminent'."

Click here to view the full SIGMA report.