Alliance for Clean Coal v. Miller

• Decision Date: 09 January 1995
• Docket Number: No. 94-1369,94-1369
• Citation: 44 F.3d 591
• Parties: , 63 USLW 2476, 159 P.U.R.4th 208, Util. L. Rep. P 14,031, 25 Envtl. L. Rep. 20,510 ALLIANCE FOR CLEAN COAL, a Virginia not-for-profit corporation, Plaintiff-Appellee, v. Dan MILLER, Richard Kolhauser, William M. Dickson, et al., * Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 591

44 F.3d 591

39 ERC 2025, 63 USLW 2476, 159

P.U.R.4th 208,

Util. L. Rep. P 14,031, 25 Envtl. L. Rep. 20,510

ALLIANCE FOR CLEAN COAL, a Virginia not-for-profit

corporation, Plaintiff-Appellee, v. Dan MILLER, Richard Kolhauser, William M. Dickson, et al.,

^*

Defendants-Appellants.

No. 94-1369.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 16, 1994.

Decided Jan. 9, 1995.

R.R. McMahan (argued), Gerald O. Sweeney, Jr., Damon N. Vocke, Lord, Bissell & Brook, Chicago, IL, for Alliance for Clean Coal.

Rosalyn B. Kaplan, Chicago, IL (argued), for Ellen C. Craig, Terrence L. Barnich, William M. Dickson, Ruth K. Kretschmer, Lynn M. Shishido-Topel, David S. Williams.

Rosalyn B. Kaplan, Asst. Atty. Gen., Gail E. Mrozowski, Barbara J. Hillman, Michael H. Holland, Cornfield & Feldman, Chicago, IL, Edgar N. James, Holly B. Fechner, Guerrieri, Edmond & James, Washington, DC, for Karl A. McDermott.

Arend J. Abel, Pamela Carter, Asst. Atty. Gen., Myra P. Spicker, Office of Atty. Gen., Indianapolis, IN, for State of Indiana, amicus curiae.

Joseph B. Meyer, Mary B. Guthrie, Office of Atty. Gen., Cheyenne, WY, for State of Wyoming, amicus curiae.

Joseph P. Mazurek, Clay R. Smith, Office of Atty. Gen., Helena, MT, for State of Montana, amicus curiae.

Before CUMMINGS, CUDAHY and RIPPLE, Circuit Judges.

CUMMINGS, Circuit Judge.

Plaintiff Alliance for Clean Coal ("Alliance") is a Virginia trade association whose members include Colorado and Oregon coal companies and three railroads that transport coal. The defendants are the chairman and six commissioners of the Illinois Commerce Commission in charge of the administration and enforcement of the Illinois Public Utilities Act.

BACKGROUND

Coal has long been and continues to be the most important source of fuel for the generation of electric power in this country, accounting for 56% of all electricity generated in 1992. Electric utilities, the primary consumers of domestic coal, burned 78% of the 998 million tons of coal produced in the United States in 1992. Coal is produced in over half the states and is sold in a highly competitive national market. See Alliance Ex. 10.

Coal's sulfur content varies greatly depending on its geographical origin. Western coal, mined west of the Rocky Mountains, generally has the lowest sulfur content of any coal produced in the country. Coal mined in the "Illinois Basin," which includes most of Illinois and parts of Indiana and western Kentucky, is relatively high in sulfur. Burning coal emits sulfur dioxide in an amount proportional to the coal's sulfur content. See generally Bruce A. Ackerman & William T. Hassler, Clean Coal/Dirty Air (1981).

In the 1970 Amendment to the Clean Air Act, Congress authorized the Environmental Protection Agency ("EPA") to set new standards to regulate various emissions, including sulfur dioxide. See 42 U.S.C. Sec. 7411 (1970) (amended 1977). The EPA provided for two methods to control sulfur dioxide emissions: (1) the use of low sulfur coal; and (2) the use of pollution control devices ("scrubbers").

In 1977 Congress again amended the Clean Air Act, requiring new electric plants to build scrubbers. By requiring scrubbers regardless of the sulfur content of the coal burned, Congress essentially eliminated for new facilities the low-sulfur coal compliance option that had been available under the 1970 Amendment.

In 1990 Congress once again amended the Act, this time requiring a drastic two-stage reduction in industrial sulfur dioxide emissions in an attempt to combat acid rain. The 1990 Act implements a market-driven approach to emissions regulation, allowing for the free transfer of emission "allowances." The Act is aimed at reducing sulfur dioxide emissions in the most efficient manner and, like the 1970 Act, allows electric generating plants to meet the emission standards in the cheapest way possible. The principal methods of compliance now include installing new scrubbers, using low-sulfur coal, switching to another fuel source, or buying additional emission allowances.

The 1990 amendments meant the end of the salad days for high-sulfur coal-producing states such as Illinois. Low-sulfur western coal once again offered a viable alternative to the continued burning of high-sulfur coal combined with the installation of expensive new scrubbers. Faced with potentially damaging competition for the local coal industry, in 1991 the Illinois General Assembly passed the Coal Act, an addition to the Utilities Act, concerning implementation and compliance with the 1990 Clean Air Act amendments. See 220 ILCS 5/8-402.1. Under the Coal Act, utilities must formulate Clean Air Act compliance plans which must be approved by the Illinois Commerce Commission. In preparing and approving these compliance plans, the utilities and the Commerce Commission are required to:

take into account the need for utilities to comply in a manner which minimizes to the extent consistent with the other goals and objectives of this Section the impact of compliance on rates for service, the need to use coal mined in Illinois in an environmentally responsible manner in the production of electricity and the need to maintain and preserve as a valuable State resource the mining of coal in Illinois.

220 ILCS 5/8-402.1(a). The Act encourages the installation of scrubbers to allow the continued burning of Illinois coal, stating that the combination

can be an environmentally responsible and cost effective means of compliance when the impact on personal income in this State of changing the fuel used at such generating plants so as to displace coal mined in Illinois is taken into account.

Id. The four largest generating plants in Illinois currently burning Illinois coal are required to include the installation of scrubbers in their compliance plans so that they will be able to continue their use of Illinois coal. The cost of these scrubbers will be deemed "used and useful" when placed in operation and the utilities are guaranteed that they will be able to include the costs in their rate base. The Act further provides that the Commerce Commission must approve any 10% or greater decrease in the use of Illinois coal by a utility.

Plaintiff asked the district court to declare the Illinois Coal Act repugnant to the Commerce Clause of the federal Constitution and to enjoin its enforcement. In December 1993, District Judge Conlon handed down a memorandum opinion and order granting such relief. Alliance for Clean Coal v. Craig, 840 F.Supp. 554 (N.D.Ill.1993). The court enjoined the Illinois Commerce Commission from enforcing the Illinois Coal Act and voided federal Clean Air Act compliance plans approved in reliance on the Illinois Coal Act.

On appeal, the defendant commissioners request that we dismiss the case for want of jurisdiction or, if we reach the merits, reverse the judgment below.

Jurisdiction

The Illinois commissioners assert that the federal courts lack jurisdiction to resolve this dispute. They claim that there exists no "case or controversy" because plaintiff Alliance has no standing to seek the requested relief having suffered no "injury in fact." The district court did not discuss this question since it was not raised below. Because jurisdiction is a sine qua non, we will discuss this argument.

While admitting that Alliance members "have done or are doing some degree of business with Illinois utilities," Illinois argues that Alliance has not established that it has suffered an "injury in fact" because "they do not identify any business overtures that were made and rebuffed on the basis of [the Coal Act]." But the showing of specific "lost opportunities" is neither required to establish standing nor reasonably expected under the circumstances of this case. An "injury in fact" is "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not 'conjectural' or 'hypothetical'." Lujan v. Defenders of Wildlife, --- U.S. ----, ----, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351. The Illinois Coal Act allegedly impinges on Alliance's members' rights to compete on an equal footing in interstate commerce. This injury is particular to suppliers and others who deal or are attempting to sell western coal to Illinois utilities. Despite the absence of evidence of specific lost deals, this competitive injury is neither "conjectural" nor "hypothetical"--the injury is not a particular lost sale but the "inability to compete on an equal footing." Northeastern Florida Contractors v. Jacksonville, --- U.S. ----, ----, 113 S.Ct. 2297, 2303, 124 L.Ed.2d 586; Government Suppliers Consolidating Services v. Bayh, 975 F.2d 1267, 1274-75 (7th Cir.1992), certiorari denied, --- U.S. ----, 113 S.Ct. 977, 122 L.Ed.2d 131; Mapco, Inc. v. Grunder, 470 F.Supp. 401, 403-06 (N.D.Ohio 1979) (Article III standing exists under similar allegations).

Moreover, because the alleged discrimination against western coal occurs at the very early stage in the utilities' drafting of compliance plans and the Commerce Commission's actions with respect to those plans, it is unreasonable to expect Alliance to point to specific orders canceled or deals reneged on. Any specific supply arrangements would occur much farther down the road after a compliance plan had been adopted and approved. Plaintiff's alleged injury is that because of the challenged legislation, such plans will be less likely to include the use of western coal.

As further "evidence" that Alliance has not suffered an injury in fact, Illinois asserts that the sale of western coal to Illinois utilities has actually increased since the 1991 passing of the Coal Act. The 1990 Clean Air Act opened up the Illinois market for western coal by once again allowing the use of low-sulfur coal as a compliance option. It is therefore not surprising that the sale of western coal has increased despite the best efforts of the Illinois legislature. The alleged injury stems...