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Sierra Club v. United States Department of Energy

November 18, 2011

SIERRA CLUB,
PLAINTIFF,
v.
UNITED STATES DEPARTMENT OF ENERGY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Defendant-intervenor Mississippi Power Company is currently constructing a coal power plant in Kemper County, Mississippi. Defendant United States Department of Energy is providing funding assistance for the construction and operation of the plant. Before granting the funding, the Department issued an Environmental Impact Statement ("EIS") evaluating the funding's environmental effects, as required by the National Environmental Policy Act ("NEPA"). Plaintiff Sierra Club is challenging the funding on the ground that the EIS was legally insufficient. The Sierra Club asserts claims against DOE, the Secretary of Energy, DOE's Director of NEPA Policy and Compliance, and DOE's NEPA Document Manager.

Now before the Court is the Sierra Club's motion for a preliminary injunction. Also before the Court is the federal defendants' motion to dismiss some of the Sierra Club's claims. For the reasons set out below, the Court will deny the Sierra Club's motion for a preliminary injunction and grant the federal defendants' motion to dismiss. The case shall proceed only on the Sierra Club's remaining claims.

I. Background

The Energy Policy Act of 2005 created the Clean Coal Power Initiative ("CCPI"). See 42 U.S.C. §§ 15961-65. Under the CCPI program, the Secretary of Energy is authorized to provide financial assistance to projects that meet certain criteria. Id. § 15962(d). To receive such assistance, projects must generally advance efficiency, environmental performance, and cost competitiveness well beyond the level of technologies that are in commercial service or have been demonstrated on a scale of viable commercial service. Id. § 15962(a). Furthermore, the Energy Policy Act of 2005 also created a loan guarantee program to provide incentives for innovative technologies. See id. §§ 16511-16. The Secretary of Energy is authorized to make loan guarantees for projects that avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases and employ new or significantly improved technologies as compared to commercial technologies currently in service. Id. § 16513(a). DOE may issue a loan guarantee for a maximum of 80% of project costs. Id. § 16512(c).

NEPA requires federal agencies to prepare a detailed statement of environmental impact for "major Federal actions significantly affecting the quality of the human environment." Id. § 4332(C); see Found. on Econ. Trends v. Heckler, 756 F.2d 143, 146-47 (D.C. Cir. 1985). Therefore, the Department must prepare an EIS before providing CCPI financial assistance or a loan guarantee if doing so constitutes "major Federal action."

The Kemper project will be a coal power plant located on approximately 1,650 acres of land in Kemper County, Mississippi. Record of Decision and Floodplain Statement of Findings, 75 Fed. Reg. 51,248, 51,250 (Aug. 19, 2010). At full capacity, the plant will convert an average of 13,800 tons of coal into gas per day. Id. Mississippi Power has also acquired, optioned, or identified for acquisition approximately 1,400 acres of "buffer areas" immediately adjacent to the project site. Id. In addition to this area, the project will affect additional acreage by requiring the construction and operation of a cooling water supply pipe, a natural gas pipeline, associated transmission lines and substations, carbon dioxide pipelines, and a lignite mine. Id.

The Kemper project is projected to cost a total of more than $2 billion. See Notice of Intent and Notice of Proposed Floodplain and Wetlands Involvement, 73 Fed. Reg. 54,569, 54,570 (Sept. 22, 2008). In September 2008, DOE announced that the Kemper project was under consideration for $294 million in CCPI financial assistance as well as a loan guarantee and that the Department of Energy was preparing an EIS assessing the potential environmental impact associated with the construction and operation of the project. Id. at 54,569-70. Prior to the completion of the NEPA process, DOE disbursed approximately $24 million of the $294 million total for "preliminary design and project definition." Id. at 54,570. In May 2010, DOE issued the final EIS. 75 Fed. Reg. at 51,249.

Construction on the Kemper project began in June 2010. Def.-intervenor's Resp. in Opp'n to Pl.'s Mot. for a Prelim. Inj. [Docket Entry 20] ("Def.-int.'s Resp.") at 10. On August 19, 2010, DOE issued a Record of Decision awarding Mississippi Power the remaining $270 million in CCPI financial assistance. 75 Fed. Reg. at 51,249. Although the May 2010 EIS addressed both the CCPI financial assistance and a loan guarantee, the Record of Decision issued in August 2010 governed only CCPI financial assistance; DOE stated that "[a] separate decision would be made regarding the loan guarantee" to be announced "in a subsequent Record of Decision." Id.

The Sierra Club's complaint presents five causes of action. First, the Sierra Club alleges that DOE violated NEPA by selecting the Kemper project for CCPI funding without giving detailed consideration to alternatives other than building the plant proposed by Mississippi Power. Compl. ¶¶ 46-49. Second, the Sierra Club alleges that DOE violated NEPA by selecting the Kemper project for a loan guarantee without giving detailed consideration to alternatives. Compl. ¶¶ 50-53. Third, the Sierra Club alleges that DOE violated NEPA by preparing the EIS with a specified "purpose and need" that was too narrow. Compl. ¶¶ 54-58. Fourth, the Sierra Club alleges that DOE violated NEPA by neglecting to consider the cumulative impact of emissions from the Kemper project in combination with emissions from other coal plants. Compl. ¶¶ 59-62. Fifth, the Sierra Club alleges that DOE violated NEPA by failing to disclose all the environmental impacts of the Kemper project and failing to identify mitigation measures. Compl. ¶¶ 63-64.

The Sierra Club asserts that it has standing to sue on behalf of members of its organization that live in the immediate vicinity of the Kemper plant. It has submitted declarations from those members and maintains that ongoing construction activities have overtaken and will continue to disrupt a "once quiet and peaceful community." See Pl.'s Mem. of Law in Supp. of its Mot. for a Prelim. Inj. [Docket Entry 11-1] ("Pl.'s PI Mem.") at 32-33. Furthermore, the Sierra Club maintains that the completed plant will emit thousands of tons of air pollution and greenhouse gases. Id. at 33. It contends that, as a result of the plant's construction and operation, land will be permanently damaged, members' property will be devalued, and members will suffer increased risks of adverse health effects. Id.

II. Sierra Club's Motion for a Preliminary Injunction

The Sierra Club's motion for a preliminary injunction argues that, absent an injunction, construction of the Kemper project will go forward without meaningful environmental analysis and the plant may be nearly complete before the Court issues a final ruling. Id. at 2. The Sierra Club therefore moves for a preliminary injunction prohibiting DOE from disbursing any further federal funds in connection with the Kemper project and prohibiting DOE from issuing any loan guarantee for the project, pending a decision on the merits. Id.

a. Preliminary Injunction Standard

To prevail on a motion for a temporary restraining order or preliminary injunction, the moving party must demonstrate: (1) a substantial likelihood of success on the merits; (2) that the moving party would suffer irreparable injury if the relief were not granted; (3) that the relief would not substantially injure other interested parties; and (4) that the public interest would be furthered by the relief. See Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006) (citing Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998)); see also Winter v. NRDC, Inc., 555 U.S. 7, 20 (2008).

The parties disagree as to whether the Court should use a "sliding scale" to evaluate these four factors or whether, instead, each factor is a prerequisite to be considered independently. See Pl.'s PI Mem. at 19; Def.'s Resp. in Opp'n to Pl.'s Mot. for a Prelim. Inj. [Docket Entry 19] ("Def.'s Resp.") at 8-9; Def.-int.'s Resp. at 16. The four factors have "typically" been evaluated on a "sliding scale," whereby "[i]f the movant makes an unusually strong showing on one of the factors, then it does not necessarily have to make as strong a showing on another factor." Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1292 (D.C. Cir. 2009). But recent Supreme Court precedent has called this model into question. See Sherley v. Sebelius, 644 F.3d 388, 392-93 (D.C. Cir. 2011). With respect to irreparable harm, it is now clear that a showing of irreparable injury is an independent prerequisite for a preliminary injunction. See Chaplaincy, 454 F.3d at 297 ("A movant's failure to show any irreparable harm is therefore grounds for refusing to issue a preliminary injunction, even if the other three factors entering the calculus merit such relief."); see also Winter, 555 U.S. at 22. However, it is somewhat less clear that likelihood of success on the merits is similarly an independent prerequisite for a preliminary injunction. In a concurrence, two judges of the DC Circuit have stated that this is so. See Davis, 571 F.3d at 1296 (Kavanaugh, J., concurring) ("[A] likelihood of success is an independent, free-standing requirement for a preliminary injunction."). Nonetheless, the DC Circuit has not resolved the question in its most recent treatment of the issue. See Sherley, 644 F.3d at 393.

This case law is relevant here because the Sierra Club, as explained below, has failed to make a clear showing of a substantial likelihood of success on the merits. This finding may well make consideration of irreparable harm unnecessary. In an abundance of caution, however, and following Sherley, the Court will also consider irreparable harm. Ultimately, the Court finds that regardless of whether the need to show a likelihood of success on the merits is treated as an independent prerequisite or is considered ...


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