Minnesota prevails in lawsuit over state biodiesel mandate

By Ron Kotrba | September 29, 2016

In a Sept. 29 ruling by the United States District Court, a judgment has been issued in the lawsuit against four Minnesota state officials regarding the implementation of the state’s biodiesel mandate. The verdict is a victory for biodiesel.

Last year various organizations, including the Minnesota Trucking Association, the Minnesota Automobile Dealers Association, the Alliance of Automobile Manufacturers, the American Petroleum Institute and the American Fuel & Petrochemical Manufacturers, sued Minnesota suggesting that the biodiesel mandate violates various federal and state laws, including the federal Clean Air Act, the Energy Policy Act of 2005, the Energy Independence and Security Act of 2007, the U.S. Constitution, and the Minnesota Administrative Procedures Act.

In Count One, the plaintiffs argued that the Minnesota biodiesel mandate conflicts with the federal renewable fuel standard (RFS) and is preempted pursuant to the supremacy clause of the U.S. Constitution.

On background, in 2005 Minnesota became the first state to implement a biodiesel standard at 2 percent. In 2009, the biodiesel requirement jumped to 5 percent. The transition to B10 was originally scheduled for 2012 but was delayed to ensure blending infrastructure was sufficient across the entire state. As of July 1, 2014, B10 was required at the pump from April through September, while B5 remains the standard the rest of the year. On May 1, 2018, the mandate is slated to jump to B20 in the summer months.

In Count Two, an alternative claim, the plaintiffs sought declaratory judgment against the four state officials that they violated the Minnesota Administrative Procedure Act by making factual findings that triggered the B10 mandate without adhering to certain administrative rulemaking requirements.

In Count Three, the plaintiffs sought a permanent injunction to prevent enforcement of B10 on the grounds that RFS preempts the state mandate and officers violated MAPA. Furthermore, the plaintiffs sought to prevent the B20 mandate on the same grounds.

For Count One, the judgement reads, “The court … is not persuaded by any of AFPM’s arguments and instead reaches a contrary conclusion—the Minnesota mandate does not conflict with the RFS, and the RFS therefore does not preempt the Minnesota mandate.”

For Counts Two and Three, the court said it need not reach the merits of these claims because the state defendants are immune from the lawsuit under the 11th Amendment, which bars federal court jurisdiction over state law claims against unconsenting states or state officials when the state is the real, substantial party in interest.

“This is a significant victory that maintains the pathway to clean energy, renewable fuel and green jobs in Minnesota and across the country,” said Donnell Regahen, the chief operating officer and interim CEO at the National Biodiesel Board. The NBB, along with the Minnesota Biodiesel Council, the Minnesota Soybean Growers Association and the Iowa Biodiesel Board, were defendant-intervenors in the case. “The court’s ruling affirms biodiesel’s valuable role to help states move to renewable energy sources, promoting the rural economy and energy independence,” Regahen said. “We are pleased the District Court agreed with our position that America’s advanced biofuel is working both as a clear success story within the RFS and for states, which comes with it numerous benefits, including environmental.” 

Calls to state officials for comment were not returned before publication.



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