For anyone following renewable energy policy, litigation and court decisions are an unavoidable part of understanding what is going on. Since nonlawyer business professionals have little time to delve into the minutiae of this process, the meaning of a particular lawsuit or decision to one’s business can be difficult to discern. A complete understanding of this topic is neither possible nor advisable, however some basic concepts can help separate the relevant proceedings from the less relevant.
The workings of the U.S. legal system conform to an internal logic which, while necessary, is confusing to say the least. Much of what follows will be different from what a reasonable person might expect. In fact, if you always expect the opposite of what a reasonable person might, you’ll do fine.

What Court System?

Generally, lawsuits affecting renewable energy policy are brought in the court system where the policy was enacted, such as the federal courts for federal policy or the courts of the state where the state policy was enacted. For example, lawsuits against the U.S. Environmental Protection Agency (EPA) are generally heard in federal court, and a lawsuit against the California Air Resources Board would be brought in the California courts. This is not always the case, however, as some challenges to state laws are brought in federal court for a variety of reasons. One common reason is what courts call “diversity,” meaning the litigants are from different states. Diverse parties can access federal courts to avoid an unfair advantage for one or the other. At the time the system was set up, being a South Carolina litigant in a Massachusetts court was considered a major disadvantage.
The question of jurisdiction (state or federal) and venue (city or county where court is located) is the first of many examples where courts can render a decision that has no effect on your business. It is also the first example where courts occupy themselves with deciding the rules for how they decide. This is important and needs to be done, but decisions issued by a court might only address the rules and have nothing to do with substance. It could also seriously delay the process if the case is sent to a different location or a different court system. It’s not too important to understand what these concepts are, exactly, but rather to understand that courts frequently issue decisions that don’t really decide anything most people care about.

Deciding To Decide

Once a court has decided it is the right court in the right zip code, it will begin to decide if it can decide (yes, you read that correctly). This involves a variety of topics with names like “standing,” “ripeness” and “political question.” This next statement would give a law professor or other legal expert an aneurysm, but basically these all mean the same thing, which is “get out of here until you actually have a problem.” Courts don’t decide the real question of a lawsuit until they have satisfied themselves that whoever has brought the lawsuit actually has a grievance and has one right now. They also will not decide a question that should be resolved through the political process. As you can imagine, that last concept is pretty nebulous.
An illustrative example of standing is Massachusetts v. EPA, which is the case that led to the EPA regulating greenhouse gases as a pollutant. Before the court decided on what the EPA should or should not be doing under the Clean Air Act, it had to decide if Massachusetts had the right to sue. Massachusetts argued, and the courts agreed, that it had an interest to protect its citizens from the effects of global warming.

Deciding Who Decides Or How

So after a court has decided that it is the right court to decide and that the question is one that can be decided, you would think that what remained would be a clear decision. You would be wrong. In cases involving renewable energy policy, the court decision itself will usually be about, you guessed it, decisions. The case will often be challenging a procedural decision the EPA or state agency made, such as how to implement a law or policy. Staying with the Mass. v. EPA example, the court simply remanded the case back to EPA to conduct a scientific study and make a factual determination about greenhouse gas. In other words, the court told the EPA how to make a decision, rather than directly second guessing the decision. The EPA is in fact now (six years later) being sued by parties claiming it did not follow that process properly.
Another example is a case relating to the Renewable Fuels Standard discussed here in February. In American Petroleum Institute v. EPA, the API challenged the volume targets for cellulosic biofuels announced by EPA for 2012. API argued that the targets were much higher than the markets would produce and the API members would not have enough cellulosic RINs (renewable identification numbers, used for the marketable credits) to buy. The court did not get involved in the actual number, that is, it refused to say that “x” number should be substituted for “y”. Rather, it ruled that EPA’s methodology for making its cellulosic biofuel projection was flawed because it was not based on available evidence but rather optimistic projections. The court declared this to be an “unreasonable exercise of agency discretion,” and sent the EPA back to the drawing board.
Other cases have involved similar types of decisions, such as whether an agency has the authority to do something, should do something in a particular way, abused its discretion, or usurped the authority of some other agency. In most of these cases, the parties suing are really complaining that the agency is not doing enough or doing too much, but they often have to couch their complaints as being about the process instead of the result. Occasionally the case will turn on overall validity of the law, e.g., its constitutionality.
The takeaway from all this is that a court decision that you get an email blast about often will only mean that the agency under a legal challenge is being sent back to the drawing board to redo something. While this is significant in that there may be a new fact finding process or rulemaking you should monitor, it usually will not mean a change in policy on the day of the decision.
It is easy (and perhaps essential) to poke fun at this process, but it is an important one, and after all the machinations and deliberations are done, important decisions do finally come out. The courts ultimately affect renewable energy policy a great deal. There is just much to wade through to get there.
Ted Niblock is General Counsel for Turning Earth, LLC, and is cochair of the American Biogas Council’s Federal Legislative and Regulatory Affairs Committee.