American Petroleum Institute v. Cooper

• Decision Date: 26 January 2010
• Docket Number: No. 5:08-CV-396-FL.,5:08-CV-396-FL.
• Citation: 681 F. Supp.2d 635
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: AMERICAN PETROLEUM INSTITUTE, and National Petrochemical and Refiners Association, Plaintiffs, v. Roy A. COOPER, III, Attorney General of the State of North Carolina, Defendant, and North Carolina Petroleum and Convenience Marketers Association, Intervenor-Defendant.

681 F. Supp.2d 635

AMERICAN PETROLEUM INSTITUTE, and National Petrochemical and Refiners Association, Plaintiffs, v. Roy A. COOPER, III, Attorney General of the State of North Carolina, Defendant, and North Carolina Petroleum and Convenience Marketers Association, Intervenor-Defendant.

No. 5:08-CV-396-FL.

United States District Court, E.D. North Carolina, Western Division.

January 26, 2010.

Burley Bayard Mitchell, Pressly M. Millen, Jr., Womble Carlyle Sandridge & Rice, PLLC, Raleigh, NC, for Plaintiffs.

Mark Allen Davis, North Carolina Department of Justice, Raleigh, NC, for Defendant.

A. Bartlett White, Hatch Little & Bunn, LLP, Charles F. Marshall, III, Eric M. David, Brooks, Pierce, McClendon, Humphrey and Leonard, LLP, Raleigh, NC, for Intervenor Defendant.

ORDER

LOUISE W. FLANAGAN, Chief Judge.

This matter comes before the court on cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56 (DE ## 10, 42, 44). For the following reasons the court denies plaintiffs' motion for summary judgment, and grants corresponding motions filed on behalf of defendant and intervenor-defendant.¹

STATEMENT OF THE CASE

American Petroleum Institute ("API"), a national trade association of approximately 400 corporate members that represents America's oil and natural gas industry, and National Petrochemical and Refiners Association ("NPRA"), a non-profit trade association that represents American refiners and petrochemical manufacturers, seek declaratory and injunctive relief allowing their members to retain the ability to sell only ethanol-blended gasoline to distributors and retailers in North Carolina, notwithstanding the prohibitions in the North Carolina Act of July 14, 2008 ("Ethanol Blending Statute"), 2008 N.C. Sess. Laws 222, signed into law August 17, 2008.² Plaintiffs contend that the Ethanol Blending Statute is preempted by several federal statutes and violates the Commerce Clause of the United States Constitution.

Motion for summary judgment was made in the case October 2, 2008, on behalf of plaintiffs, soon after complaint was served. This was responded to in the form of the defendant's motion for discovery, around which time, in October 2008, the North Carolina Petroleum and Convenience Marketers Association ("NCPCMA"), a statewide trade organization composed of approximately 300 businesses engaged in the marketing of petroleum and convenience products, sought leave to intervene as a defendant.

Over plaintiffs' objection, the court granted NCPCMA's motion February 27, 2009. Hearing was set on the motion for discovery in March and continued upon request. At hearing April 15, 2009, the parties negotiated a joint submission of certain factual stipulations for the court's reference in deciding plaintiffs' motion for summary judgment, entered in the record April 22, 2009.³ Agreement as to a briefing schedule also was reached. In light of these agreements, defendant's motion for discovery was denied as moot.

In light of the stipulations, plaintiff refined its motion through the form of a revised memorandum, entered in the record May 8, 2009, wherein it is argued that the Ethanol Blending Statute conflicts with multiple federal statutes, as well as the Commerce Clause. Defendant has also moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, in motion filed May 22, 2009, as to all claims asserted by plaintiffs alleging that the Ethanol Blending Statute is facially preempted by federal law or facially violates the Commerce Clause. In addition, to the extent it is determined that plaintiff's complaint also states an as-applied challenge, which defendant expressly denies, defendant moves for dismissal of such a claim pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction, based on ripeness grounds. Intervenor-defendant similarly asserts in motion made pursuant to Rule 56 of the Federal Rules of Civil Procedure, filed May 22, 2009, that plaintiffs' facial challenges fail as a matter of law. Briefing concluded June 18, 2009. In order entered June 24, 2009, the court denied motion for leave to file statement of amicus curiae by the Petroleum Marketers Association of America ("PMAA"), a national organization to which intervenordefendant belongs. September 29, 2009, the court received the parties' clarification of the effect of the stipulation, request in order entered September 21, 2009.

STATEMENT OF THE UNDISPUTED FACTS

The parties stipulate to certain facts deemed binding on plaintiffs for purposes of the court's consideration of plaintiffs' motion for summary judgment, including that the Ethanol Blending Statute has not (1) prevented plaintiffs' members from complying with various federal obligations; (2) resulted in consumer confusion or lowered the quality of trademarked gasoline; (3) caused excessive burden on interstate commerce in relation to local benefits provided by the law; or (4) precluded any of plaintiffs' members from selling gasoline in North Carolina. The court is to take the stipulations into account when deciding plaintiffs' motion, but to disregard them for purposes of considering any opposing motion for summary judgment. The parties have agreed that "these stipulations will enable the Court to determine which, if any, of the substantive issues contained in the Complaint require further factual development before they can be resolved," but that, "in the event the Court denies both parties' Motions for Summary Judgment on a particular claim (or claims), the. . . stipulations . . . will not apply to any further litigation on said claim(s)." (J. Stipulations 1; Am. J. Stipulations 1.)

The stipulations clarify that certain claims are not being raised for the purpose of summary judgment, because the parties agree that further discovery will be necessary on related issues.⁴

Finally, the parties agree that for the purpose of summary judgment, plaintiffs' claims are to be deemed to constitute a facial challenge to the Ethanol Blending Statute. Plaintiffs imply that the complaint also raises as-applied challenges. Defendants, on the other hand, contend that the complaint mounts only a facial attack against the statute and that any asapplied challenge would not yet be ripe. The court addresses only those facial challenges specifically at issue in the motions for summary judgment. Because the court as herein set forth denies plaintiffs' motion for summary judgment, remaining facial and as-applied challenges are subject to further litigation.⁵

DISCUSSION

A. Standing

The court first addresses whether plaintiffs have standing to bring this action.⁶ In its answer to the complaint, defendant suggests that "some or all of plaintiffs' claims are barred by the doctrine of standing." (Answer 10.) Neither defendant or intervenor-defendant, however, presses the issue of standing in any motion for summary judgment. Regardless of whether they wish now to pursue this, the court is "obliged to examine the standing of plaintiffs, as a matter of the case-or-controversy requirement. . . ." Juidice v. Vail, 430 U.S. 327, 331, 97 S.Ct. 1211, 51 L.Ed.2d 376 (1977); see Dan River, Inc. v. Unitex Ltd., 624 F.2d 1216, 1221 (4th Cir.1980) ("Whether raised or not, jurisdictional standing is an issue to be considered sua sponte by the court. . . .").

Plaintiffs claim associational standing to bring suit on behalf of their members. Associational standing requires a showing that (1) at least one individual member has standing to sue in its own right; (2) the interests the organization seeks to protect are germane to its purposes; and (3) neither the claim asserted nor the relief requested requires participation of individual members. Retail Indus. Leaders Ass'n v. Fielder, 475 F.3d 180, 186 (4th Cir.2007) (citations omitted). An individual member has standing to sue in its own right if it is able to allege an "(1) injury in fact (2) that is fairly traceable to the defendant's conduct and (3) that is likely to be redressed by a favorable decision." Id. at 186 n. 1 (citations omitted).

Each of the three prongs for individual standing is met here. Plaintiff alleges that there is "a realistic danger its members will sustain a direct injury as a result of the statute's operation or enforcement." See Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298, 99 S.Ct. 2301, 60 L.Ed.2d 895 (1979). The impending injuries have been described as (1) the sanctions which may be imposed by state and federal authorities for failure to comply with conflicting legal regimes; (2) the interference with their members' federal trademark rights; and (3) the increased burden on out-of-state members. See Retail Indus., 475 F.3d at 186 ("The alleged injury must, for standing purposes, be concrete and particularized . . . but. . . if the injury is certainly impending, that is enough.") (internal quotations and citations omitted). As Attorney General, defendant is charged with investigating violations of and enforcing the Ethanol Blending Statute. N.C. Gen.Stat. § 75-85 (2008). An injunction from this court would provide redress to plaintiffs' members.

Therefore, at least one of plaintiffs' members has standing to sue in its own right. Furthermore, the interests raised by this litigation are germane to plaintiffs' purposes as trade associations, and the participation of individual members is not required for successful adjudication. Plaintiffs have satisfied the requirements for associational standing.

B. Cross-Motions for Summary Judgment

1. Standard

Summary judgment is appropriate when there exists 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); Anderson v. Liberty Lobby, 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party seeking summary judgment bears the initial burden of coming forward and demonstrating the absence of a genuine issue of material fact. Celotex Corp. v....