The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge
MEMORANDUM OPINION GRANTING THE PLAINTIFFS'MOTION TO FILE A SECOND AMENDED COMPLAINT; DENYING AS MOOT THE PLAINTIFFS'MOTION FOR RELIEF UPON RECONSIDERATION
This matter comes before the court on the plaintiffs' motion for relief upon reconsideration and their motion to file a second amended complaint. The plaintiffs, nonprofit organizations devoted to the environmental preservation of the Appalachian Mountains region, brought suit against the defendants, the Department of Treasury ("DOT") and the Department of Energy ("DOE"), alleging that the defendants erroneously failed to consider the environmental consequences of a program that provides tax credits to companies that use "clean coal" technology. The plaintiffs filed their first amended complaint on August 12, 2008.
On November 10, 2008, the court dismissed the first amended complaint for lack of standing. The plaintiffs now move for relief upon reconsideration of that order. In the alternative, the plaintiffs seek leave to file a second amended complaint to remedy the deficiencies that prompted the dismissal of the first amended complaint. The defendants oppose both motions. Because the plaintiffs' proposed second amended complaint remedies the deficiencies in the first amended complaint, the court determines that granting the plaintiffs leave to file a second amended complaint is in the interest of justice. As a result, the court denies as moot the plaintiffs' motion for relief upon reconsideration of the order dismissing the first amended complaint.
The Energy Policy Act of 2005 provides for the allocation of up to $1.65 billion in tax credits for investment in "clean coal" facilities. Pub. L. No. 109-58 at § 1307, 119 Stat. 594 at 999-1006 (2005); see also 26 U.S.C. §§ 48A(d)(1), 48B(d)(1). The Internal Revenue Service ("IRS") will allocate the tax credits only if DOE, after reviewing project applications, "provides a certification of feasibility and consistency with energy policy goals ('DOE certification') for the project." IRS Not. 2006-24 at 4.01 (Mar. 13, 2006). Recipients of tax credits under 26 U.S.C. §§ 48A and 48B have five years and seven years, respectively, to place their project into service. 26 U.S.C. § 48A(d)(2)(E); IRS Not. 2006-25 at § 4.02(10) (Mar. 13, 2006). If a recipient fails to meet the conditions required to place its project into service within that time period -- for example, if it fails to receive all required federal and state environmental approvals -- it forfeits the tax credit. IRS Not. 2006-24 at App. A; IRS Not. 2006-25 at App. A.
In the 2006 round of tax credits, IRS allocated $1 billion in credits to nine clean coal projects: the Duke Energy Cliffside Modernization Project ("the Cliffside project"), located in North Carolina, and eight other projects in various locations around the country. 1st Am. Compl. ¶¶ 42-45. On January 29, 2008, Duke Energy obtained a construction permit to begin building the new Cliffside plant. Id. ¶ 69.
On March 3, 2008, the plaintiffs filed their complaint and moved for a preliminary injunction, claiming that the defendants had violated the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321 et seq., and the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 551 et seq., by failing to conduct an Environmental Impact Study ("EIS") evaluating the environmental impacts of the tax credit program. See generally Compl.; Pls.' Mot. for Prelim. Inj. The plaintiffs then filed an amended complaint adding a claim under the Endangered Species Act ("ESA"), 16 U.S.C. §§ 1531 et seq., alleging that the defendants erroneously failed to consult with the U.S. Fish and Wildlife Service and the U.S. National Marine Fisheries Service before allocating the tax credits. 1st Am. Compl. ¶ 2. The defendants opposed the preliminary injunction motion and moved to dismiss the first amended complaint, maintaining that the plaintiffs lacked standing to bring suit. Defs.' Opp'n to Pls.' Mot. for Prelim. Inj. at 11-21; Defs.' Mot. to Dismiss 1st Am. Compl. at 8-20.
On November 10, 2008, the court granted the defendants' motion to dismiss. See generally Mem. Op. (Nov. 10, 2008). It held first that the plaintiffs had failed to adequately allege injury-in-fact with respect to the eight projects other than Cliffside because they had asserted no particularized connection to or interest in those sites. Id. at 6-9. The court also concluded that the plaintiffs had failed to assert a fairly traceable causal connection between the tax credits and the decision to go forward with the Cliffside project. Id. at 9-14. The plaintiffs now move for relief upon reconsideration of the court's November 10, 2008 order. See generally Pls.' Mot. for Relief Upon Recons. In the alternative, the plaintiffs seek leave to file an amended complaint, which they maintain satisfies the traceability requirement at this stage of the proceedings. See generally Pls.' Mot. to Amend. The defendants oppose both motions. See generally Defs.' Opp'n to Pls.' Mot. for Relief Upon Recons.; Defs.' Opp'n to Pls.' Mot. to Amend.
A. Legal Standard for a Motion for Leave to Amend ...