Chesapeake Climate Action Network v. Export-Import Bank of the United States

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CHESAPEAKE CLIMATE ACTIION :
NETWORK, et al., :
:
Plaintiffs, : Civil Action No.: 13-1820 (RC)
:
v. : Re Document Nos.: 56, 57, 58, 63, 69
:
EXPORT-IMPORT BANK OF THE UNITED :
STATES, et al., :
:
Defendants. :
MEMORANDUM OPINION
DENYING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT; GRANTING DEFENDANTS’ CROSS-
MOTION FOR SUMMARY JUDGMENT; DENYING AS MOOT PLAINTIFFS’ MOTION FOR
ADMISSION OF EXTRA-RECORD EVIDENCE; GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION TO STRIKE; AND GRANTING IN PART AND DENYING IN PART
PLAINTIFFS’ MOTION TO STRIKE
I. INTRODUCTION
Chesapeake Climate Action Network, Friends of the Earth, Sierra Club, West Virginia
Highlands Conservancy, Center for International Environmental Law, and Pacific Environment
(collectively, “Plaintiffs”) initiated the present action to challenge the Export-Import Bank of the
United States’ (“the Bank”) approval of a $90 million loan guarantee. The guarantee supports a
three-year, $100 million loan from PNC Bank (“PNC”) to Xcoal Energy & Resources, LLC
(“Xcoal”). According to Plaintiffs, the Bank’s guarantee allows Xcoal to export $1 billion in
U.S. coal, which in turn results in significant adverse effects on human health and the
environment. Plaintiffs contend that the Bank’s failure to consider such environmental impacts
prior to approving the loan guarantee violated the National Environmental Policy Act, 42 U.S.C.
§§ 4321 et seq. (“NEPA”), and the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq.
(“APA”). As a consequence, Plaintiffs seek a declaration that the Bank’s authorization of the
loan guarantee violated NEPA, and an injunction ordering the Bank to rescind the guarantee and
to comply with NEPA before providing any additional financing to Xcoal. In response, the Bank
and its Chairman, Fred Hochberg (collectively, “Defendants”), argue first that Plaintiffs lack
standing to assert their claims, and second, that the Bank was not required to consider the
potential environmental impact of a loan guarantee under NEPA.
Now before the Court are the parties’ cross-motions for summary judgment, as well as
competing motions to admit and exclude extra-record evidence offered by both Plaintiffs and
Defendants. After considering the parties’ motions, their memoranda in support thereof and
opposition thereto, and the administrative record, the Court hereby allows the introduction of
extra-record declarations proffered by both parties for the limited purpose of assessing standing,
excludes those portions of the parties’ declarations that are inadmissible, finds that Plaintiffs lack
standing, and grants summary judgment in favor of Defendants.
II. FACTUAL BACKGROUND
A. Statutory background
NEPA was enacted in 1970 “to promote efforts which will prevent or eliminate damage
to the environment and biosphere . . . .” 42 U.S.C. § 4321. Specifically, NEPA instructs any
agency contemplating a “major Federal action[] significantly affecting the quality of the human
environment,” to first prepare and solicit public comment on an environmental impact study
(“EIS”). 1 See 42 U.S.C. § 4332(C). The goals of the Act are two-fold: first, “it places upon an
1
By statute, an EIS must address:
(i) the environmental impact of the proposed action, (ii) any adverse
environmental effects which cannot be avoided should the proposal be
implemented, (iii) alternatives to the proposed action, (iv) the relationship
2
agency the obligation to consider every significant aspect of the environmental impact of a
proposed action,” and second, “it ensures that the agency will inform the public that it has indeed
considered environmental concerns in its decisionmaking process.” WildEarth Guardians v.
Jewell, 738 F.3d 298, 302 (D.C. Cir. 2013) (quoting Balt. Gas & Elec. Co. v. Natural Res. Def.
Council, Inc., 462 U.S. 87, 97 (1983). Thus, although NEPA does not require federal agencies to
act on the basis of environmental concerns or to make the best decision for the environment, it
does require that all agencies take a “‘hard look’ at the environmental consequences before
taking a major action.” Balt. Gas & Elec., 462 U.S. at 97.
NEPA’s implementing regulations further explain that the term “[m]ajor Federal action
includes actions with effects that may be major and which are potentially subject to Federal
control and responsibility.” 40 C.F.R. § 1508.18. Covered actions include “new and continuing
activities, including projects and programs entirely or partly financed, assisted . . . or approved
by federal agencies . . . .” Id. To determine whether a given action significantly affects the
environment, an agency must take into account the action’s cumulative impact on the
environment. 40 C.F.R. § 1508.27. However, where a category of agency actions “do not
individually or cumulatively have a significant effect on the human environment,” environmental
analysis is not required, and the agency can establish procedures for categorically excluding
those actions so long as it allows for exceptions in “extraordinary circumstances in which a
normally excluded action may have a significant environmental effect.” 40 C.F.R. § 1508.4.
between local short-term uses of man’s environment and the maintenance and
enhancement of long-term productivity, and (v) any irreversible and irretrievable
commitments of resources which would be involved in the proposed action should
it be implemented.
42 U.S.C. § 4332(C).
3
Plaintiffs who believe that they have been harmed by an agency’s failure to comply with
NEPA may bring suit under the APA, which provides a cause of action to “[a] person suffering
legal wrong because of agency action, or adversely affected or aggrieved by agency action,” 5
U.S.C. § 702, if the agency action is final and “there is no other adequate remedy in a court,” 5
U.S.C. § 704.
B. The Export-Import Bank of the United States
Established as an independent federal agency in 1954, the Bank’s purpose is “to facilitate
exports of goods and services . . . and in so doing to contribute to the employment of United
States workers.” See 12 U.S.C. § 635(a)(1). It does so by providing “loans, guarantees,
insurance, and credits” to support U.S. exports. Id. Since 1982, Congress has specifically
directed the Bank to:
establish a program to provide guarantees for loans extended by financial
institutions . . . [to] exporters, when such loans are secured by export accounts
receivable, [or] inventories of exportable goods . . . , and when in the judgment of
the Board of Directors -- (1) the private credit market is not providing adequate
financing to enable otherwise creditworthy export trading companies or exporters
to consummate export transactions; and (2) such guarantees would facilitate
expansion of exports which would not otherwise occur.
12 U.S.C. § 635a-4. In accordance with these instructions, the Bank established the working
capital guarantee program (“WCGP”), which allows the Bank to enter into Master Guarantee
Agreements (“MGAs”) with lenders on behalf of an exporter-borrower. See generally Export-
Import Bank of the United States, Working Capital Guarantee Program Manual (effective Dec.
21, 2005), available at http://www.exim.gov/tools/applicationsandforms/working-capital-
applications-and-forms.cfm.
The Bank has promulgated a number of regulations to fulfill its obligations under NEPA.
Although the Bank determined that “[h]istorically, virtually all financing provided by Eximbank
has been in aid of U.S. exports which involve no effects on the quality of the environment within
4
the United States,” 12 C.F.R. 408.3, it adopted procedures to govern “the relatively rare cases
where Eximbank financing of U.S. exports may affect environmental quality in the United States
. . . .” Id. More specifically, the Bank determined that “[a]pplications for Eximbank financing in
the form of insurance or guarantees” normally do not require environmental assessments and are
categorically excluded from NEPA’s EIS requirement unless “the presence of extraordinary
circumstances indicates that some other level of environmental review may be appropriate.” 12
C.F.R. § 408.6.
C. The Bank’s Approval of the Loan Guarantee
Xcoal is one of the largest coal exporters in the United States, sending millions of tons of
metallurgical coal overseas each year since its founding in 2004. AR 32A, 34A, 133. The
company takes possession of coal at mines in Pennsylvania and West Virginia, and it transports
the coal by rail to port terminals in Maryland and Virginia. AR 34A, 35A. From there, Xcoal
sends the coal to its export destination, usually China, South Korea, or Japan. AR 29A, 39A. To
finance its export business, Xcoal has obtained lines of credit from PNC in the United States, as
well as from several European banks. AR 35A–37A.
In December 2011, Xcoal’s Vice President of Finance Craig McLane and a Senior Vice
President at PNC completed a joint application for an export working capital guarantee from the
Bank. AR 21. Xcoal had previously obtained a $25 million line of credit from PNC with the
Bank’s support, and it sought to replace the preexisting guaranteed loan with a guaranteed loan
of $100 million. AR 19, 273. At the time, Xcoal’s export sales were increasing and the
company had $530 million in uncommitted lines of credit provided by nine European banks in
addition to the $25 million from PNC. AR 32A, 36A. However, due to the European sovereign
debt crisis, Xcoal was “concerned that its European banks may not be in a position to fund the
5
Company in the future, and [it sought] to replace those financing arrangements with an increase
in the Ex-Im Bank Loan Facility.” AR 32A. For that reason, and because PNC “traditionally
does not (without Ex-Im Bank support) provide financing against accounts receivable due from
foreign buyers,” Xcoal and PNC applied for a loan guarantee from the Bank. AR 32A.
According to the joint application, the $100 million loan from PNC would support $1 billion in
export sales of metallurgical coals, AR 20, and would primarily be used for working capital
advances and to support the issuance of standby letters of credit as performance bonds, AR 20,
33A.
Bank staff subsequently reviewed the application and prepared a written report
recommending approval of the loan guarantee. See AR 31A–52A. In a section titled
“Justification for Ex-Im Bank Support,” the Bank observed that Xcoal did “not have the ability
to internally generate the necessary working capital,” that “[d]omestic financial institutions are
not willing to provide enough financing to XCoal without the Ex-Im Bank guarantee,” and that
with the Bank’s support, the company “will be able to ensure liquidity and access to capital
should XCoal’s European banks hesitate in providing the necessary working capital financing.”
AR 37A. At no point during its consideration of the application did the Bank ever request or
receive an EIS or an environmental analysis.
On May 24, 2012, the Bank approved a $100 million transaction-specific revolving
working capital guarantee loan from PNC to Xcoal with a term of 36 months. AR 1, 30A, 273.
The loan is supported by the Bank’s $90 million loan guarantee, AR 30A, and is subject to the
Bank’s Master Guarantee Agreement, AR 53–99. The Bank’s WCGP procedures dictate that
“all transactions . . . require approval by Ex-Im Bank staff prior to being included under the . . .
6
Loan Facility.” AR 33A. Since the Bank approved the loan guarantee, Xcoal has sought and
received the Bank’s approval for more than a dozen transactions. See AR 135–205.
On July 31, 2013, Plaintiffs initiated this suit to challenge the Bank’s authorization of the
$90 million loan guarantee by filing a complaint in U.S. District Court for the Northern District
of California. The case was transferred to this Court on November 20, 2013, and it is presently
before the Court on the parties’ cross-motions for summary judgment.
III. ANALYSIS
A. Standing
Federal courts are courts of limited jurisdiction, possessing “only that power authorized
by Constitution and statute, which is not to be expanded by judicial decree.” Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). “It is to be
presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the
contrary rests upon the party asserting jurisdiction.” Id. (citations omitted). The judicially
created doctrine of standing derives from Article III of the U.S. Constitution, which confines the
federal courts to adjudicating actual “Cases” and “Controversies, U.S. Const. art. III, § 2, cl. 1,
and from “the separation-of-powers principles underlying that limitation.” Lexmark Int'l, Inc. v.
Static Control Components, Inc., 134 S. Ct. 1377, 1386 (2014). Thus, a showing of standing “is
an essential and unchanging” predicate to any exercise of this Court's jurisdiction. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992). The Court must therefore determine first if it
has jurisdiction over a given action before ruling on the merits. Al–Zahrani v. Rodriguez, 669
F.3d 315, 318 (D.C. Cir. 2012).
Ordinarily, a party has established standing if it shows that, at the time the complaint was
filed: (1) “the party has suffered an ‘injury in fact,’” (2) “the injury is ‘fairly traceable’ to the
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challenged action of the defendant,” and (3) “it is ‘likely, as opposed to merely speculative, that
the injury will be redressed by a favorable decision.’” Grocery Mfrs. Ass'n v. EPA, 693 F.3d
169, 174 (D.C. Cir. 2012) (citing Defenders of Wildlife, 504 U.S. at 560–61); La Botz v. Fed.
Election Comm'n, No. 13-cv-997, 2014 WL 3686764, at *4-5 (D.D.C. July 25, 2014)
(“[S]tanding in the present action is ascertained from the facts as they existed when [the plaintiff]
first filed his complaint in this Court in 2013.”).
The standing inquiry is modified, however, in cases where a plaintiff alleges a violation
of his or her procedural rights. In such cases – as when a plaintiff sues over the failure to
conduct an EIS under NEPA – the plaintiff must “show that the interest asserted is more than a
mere general interest in the alleged procedural violation common to all members of the public,
the plaintiff must show that the government act performed without the procedure in question will
cause a distinct risk to a particularized interest of the plaintiff.” Fla. Audubon Soc. v. Bentsen,
94 F.3d 658, 664 (D.C. Cir. 1996) (internal quotation marks and citation omitted). Although
procedural rights plaintiffs need not show that, but for the procedural defect, the agency would
have reached a different decision, they must establish “a causal relationship between the final
agency action and the alleged injuries.” Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d 1152,
1160 (D.C. Cir. 2005). The causation prong of the standing inquiry looks to the “causal nexus
between the agency action and the asserted injury, while redressability centers on the causal
connection between the asserted injury and judicial relief.” Id. at 1160 n.2 (quoting Freedom
Republicans v. FEC, 13 F.3d 412, 418 (D.C. Cir. 1994)).
Furthermore, in those cases where the plaintiff was not the subject of government action
or inaction, and where the harm to the plaintiff comes instead from the agency’s regulation of an
independent third party not before the court, standing is ordinarily “substantially more difficult to
8
establish.” See Defenders of Wildlife, 504 U.S. at 562 (internal quotation marks omitted). In
such instances, the elements of causation and redressability “hinge on the independent choices of
the regulated third party,” and “it becomes the burden of the plaintiff to adduce facts showing
that those choices have been or will be made in such manner as to produce causation and permit
redressability of injury.” Ctr. for Law & Educ., 396 F.3d at 1161 (quoting Nat’l Wrestling
Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930, 938 (D.C. Cir. 2004)).
The Plaintiffs, as the parties invoking this Court’s jurisdiction, bear the burden of
establishing all three elements of standing. WildEarth Guardians, 738 F.3d at 305. At the
summary judgment stage, Plaintiffs bear the burden of showing that, taking their facts as true and
drawing all reasonable inferences in their favor, a reasonable juror could find that they have
standing. Dominguez v. UAL Corp., 666 F.3d 1359, 1362 (D.C. Cir. 2012). To meet this burden,
Plaintiffs must put forth specific facts – not mere allegations – that show a “substantial
probability” that Plaintiffs were injured, that the Defendants caused the injury, and that a
favorable decision of this Court could redress that injury. Sierra Club v. EPA, 292 F.3d 895,
898–99 (D.C. Cir. 2002).
Where a plaintiff is an organization suing on behalf of its members – as is the case here
for Plaintiffs Chesapeake Climate Action Network (“CCAN”), Friends of the Earth, Sierra Club,
and West Virginia Highlands Conservancy (“WVHC”) 2 – the organization has “representative”
or “associational” standing if: “(1) at least one of its members would have standing to sue in his
own right; (2) the interests the association seeks to protect are germane to its purpose, and (3)
neither the claim asserted nor the relief requested requires that an individual member of the
2
See Pls.’ Mot. Summ. J. at 12–13 (stating that these four plaintiffs are suing on their
members’ behalf while the Center for International Environmental Law and Pacific Environment
are suing on their own behalf).
9
association participate in the lawsuit.” Id. at 898. Because the Center for International
Environmental Law (“CIEL”) and Pacific Environment are organizations suing on their own
behalf, however, they “must make the same showing required of individuals: an actual or
threatened injury in fact that is fairly traceable to the defendant's allegedly unlawful conduct and
likely to be redressed by a favorable court decision.” ASPCA v. Feld Entm't, Inc., 659 F.3d 13,
24 (D.C. Cir. 2011).
Ultimately, the Court need only find that one plaintiff has established standing to allow a
case to proceed to the merits. See Comcast Corp. v. FCC, 579 F.3d 1, 6 (D.C. Cir. 2009) (“[I]f
one party has standing in an action, a court need not reach the issue of the standing of other
parties when it makes no difference to the merits of the case.”).
B. Admissibility of Extra-Record Evidence
Although judicial review of agency action is typically confined to the administrative
record, where there is not sufficient evidence of standing in the record because the question was
not before the agency, plaintiffs may submit extra-record evidence to establish standing. Sierra
Club, 292 F.3d at 899. Indeed, if standing is not self-evident, a plaintiff “must supplement the
record to the extent necessary to explain and substantiate its entitlement to judicial review.” Id.
at 900 (emphasis added). In this case, both parties have submitted declarations to support or
oppose a finding of standing. 3 Additionally, both parties argue that a declaration offered by their
3
Plaintiffs, in addition to providing extra-record declarations to show standing, have
asked the Court to consider four of their declarations when analyzing the merits of Plaintiffs’
claims. See Pls.’ Mot. Admis. of Extra-R. Evidence at 2, ECF No. 57. Because the Court
ultimately finds that Plaintiffs lack standing, and thus does not reach the merits of their claims,
Plaintiffs’ motion to admit extra-record declarations is denied as moot. Relatedly, to the extent
that Defendants’ motion to strike Plaintiffs’ extra-record declarations argues that the Court
should not consider the declarations in its merits analysis, see Defs.’ Mot. Strike, ECF No. 58,
the motion is denied as moot. The Court will, however, address Defendants’ motion to strike to
10
opponents is inadmissible and cannot be considered even for the limited purpose of determining
standing. See Ass'n of Flight Attendants-CWA, AFL-CIO v. U.S. Dep't of Transp., 564 F.3d 462,
465 (D.C. Cir. 2009) (holding that affidavits and other evidence offered to establish standing at
the summary judgment stage are subject to the provisions of Federal Rule of Civil Procedure 56);
see also Fed. R. Civ. P. 56(c)(4) (requiring that an “affidavit or declaration used to support or
oppose a motion must be made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to testify on the matters stated.”).
As a consequence, before the Court can conduct its standing analysis, it must first resolve the
question of which declarations can be considered for standing purposes. See Fed. R. Evid.
104(a) (“The court must decide any preliminary question about whether a witness is qualified, a
privilege exists, or evidence is admissible.”).
Collectively, Plaintiffs have provided the Court with a total of thirteen declarations to
establish standing. Seven of those declarations are from individual members of CCAN, Sierra
Club, WVHC, and Friends of the Earth, who live, work, or recreate in Maryland, Virginia, or
West Virginia. 4 Two of the declarations are from representatives of CIEL and Pacific
Environment. 5 In addition, Plaintiffs have provided three declarations from experts to describe
the environmental impact of coal exports. 6 Defendants do not object to the Court’s consideration
of any of these twelve declarations for the limited purpose of assessing standing. See Defs.’
the extent that it argues that one of Plaintiffs’ declarations cannot be considered even for
standing purposes because it is inadmissible. See Defs.’ Mot. Strike at 2.
4
See Bullard Decl. Ex. 5, ECF No. 56-5; Cook Decl. Ex. 6, ECF No. 56-6; Fox Decl. Ex.
7, ECF No. 56-7; Ortega Decl. Ex. 10, ECF No. 56-10; Rank Decl. Ex. 11, ECF No. 56-11; Reed
Decl. Ex. 12, ECF No. 56-12; Ware Decl. Ex. 13, ECF No. 56-13.
5
See Johl Decl. Ex. 8, ECF No. 56-8; Norlen Decl. Ex. 9, ECF No. 56-9.
6
See Hansen Decl. Ex. 1, ECF No. 56-1; Johannesson Decl. Ex. 2, ECF No. 56-2; Sahu
Decl. Ex. 3, ECF No. 56-3.
11
Mot. Strike at 1, ECF No. 58; Defs.’ Mem. Support Mot. Strike at 1 n.2, ECF No. 59.
Defendants do, however, object to Plaintiffs’ introduction of the declaration of Tom Sanzillo, a
purported expert in finance, to explain the financial importance of the Bank’s loan guarantee to
Xcoal. See Sanzillo Decl. Ex. 4, ECF No. 56-4. Defendants argue that the Sanzillo declaration
cannot be considered even for standing purposes because Mr. Sanzillo’s findings are unreliable,
irrelevant, and unsupported such that they are inadmissible under the Federal Rules of Evidence.
Defs.’ Mem. Support Mot. Strike at 8–9.
Plaintiffs, on the other hand, argue that the declaration of Xcoal’s Vice President of
Finance Craig McLane, offered by Defendants to show that Xcoal’s coal export activities do not
depend upon the loan guarantee, is inadmissible. 7 Plaintiffs argue first that the McLane
declaration should not be considered because the Court should accept as true the facts averred by
Plaintiffs with respect to standing, Pls.’ Mot. Strike McLane Decl. at 2 n.1, ECF No. 69, and
second, that portions of the declaration constitute inadmissible speculation, Pls.’ Reply Mot.
Strike McLane Decl. at 5–6, ECF No. 74.
The Court addresses the admissibility of the Sanzillo declaration and the McLane
declaration in turn.
1. The Sanzillo Declaration
Plaintiffs have asked the Court to consider the extra-record declaration of Tom Sanzillo, a
purported financial expert 8 and co-founder of the Institute for Energy Economics and Financial
7
Like Plaintiffs, Defendants have offered a declaration for consideration in the Court’s
standing analysis and its merits analysis, but as stated in n.3, supra, the merits issue is moot in
light of the Court’s finding that Plaintiffs lack standing. The Court will, however, consider those
portions of Plaintiffs’ motion to strike the McLane declaration that argue that it ought not be
considered even for the limited purposes of assessing standing.
8
Defendants challenge Mr. Sanzillo’s qualification as an expert in lending practices,
pointing out that his formal education was in politics and that he lacks sufficient experience in
12
Analysis, an “organization dedicated to finding alternatives to fossil fuels, particularly coal.”
Sanzillo Decl. App’x A at 1. Mr. Sanzillo reviewed the administrative record, nine online
sources and one additional document in this case in order to reach three conclusions regarding
Xcoal’s financial need for the Bank’s guarantee. 9 See Sanzillo Decl. ¶ 7. Defendants challenge
the admissibility of Mr. Sanzillo’s declaration generally and his conclusions specifically, 10
arguing that they cannot be considered even for standing purposes because they are not
sufficiently supported, relevant, or reliable to satisfy the Federal Rules of Evidence. Defs.’
Mem. Support Mot. Strike at 11. After careful consideration, the Court agrees with Defendants.
Rule 702, which governs the use of expert testimony, provides that a qualified expert may
testify to assist the trier of fact “if the testimony is based on sufficient facts or data,” “the
testimony is the product of reliable principles and methods,” and “the expert has reliably applied
the principles and methods to the facts of the case.” Fed. R. Evid. 702. The Rule requires trial
courts to assume a “gatekeeping role,” ensuring that the methodology underlying an expert’s
testimony is valid and the expert’s conclusions are based on “good grounds.” Daubert v. Merrell
Dow Pharm., Inc., 509 U.S. 579, 590–97 (1993); see also Meister v. Med. Eng'g Corp., 267 F.3d
private lending. Because the resolution of that issue does not affect the Court’s analysis, the
Court will assume without deciding that Mr. Sanzillo is, as Plaintiffs proffer, an expert in
finance.
9
Mr. Sanzillo’s “List of Documents Referenced” includes: one internet link to Xcoal’s
website, two links to financial disclosures by a different coal exporter, one link to the financial
information of an Xcoal customer, three links to Bank guidelines and manuals, one link to a U.S.
Energy report on coal production, one link to an article on coal prices, and a citation to a text on
file with Mr. Sanzillo describing the Chinese coal market. Sanzillo Decl. App’x B.
10
Mr. Sanzillo makes – and Defendants challenge – three conclusions in his declaration.
Because only the first conclusion has any potential to affect the Court’s standing analysis, the
Court need not address the admissibility of Mr. Sanzillo’s second conclusion – that volatility in
the coal trade has made investment capital harder to come by – or his third conclusion – that
because of the importance of the Bank’s loan guarantee, Xcoal likely would have agreed to
environmental conditions had the Bank imposed them.
13
1123, 1127 (D.C. Cir. 2001). Testimony based on “subjective belief or unsupported speculation”
is not admissible as expert testimony. Daubert, 509 U.S. at 590. “A court may refuse to admit
expert testimony if it concludes that ‘there is simply too great an analytical gap between the data
and the opinion proffered.’” Groobert v. President & Directors of Georgetown Coll., 219 F.
Supp. 2d 1, 6 (D.D.C. 2002) (quoting Gen. Electric Co. v. Joiner, 522 U.S. 136, 146 (1997)); see
also Fla. Audubon Soc., 94 F.3d at 667–68 (holding that Plaintiffs failed to produce competent
evidence of injury where they relied on expert’s speculative testimony that a tax credit would
encourage farmers to increase corn or sugar production in a manner that would increase
agricultural pollution and damage wildlife areas).
As an initial matter, this Court is presented with substantial difficulty in assessing the
reliability of the principles or methodology used by Mr. Sanzillo as required by Rule 702
because Mr. Sanzillo has not identified any such principles or methodology. Mr. Sanzillo notes
only that he reviewed certain documents and reached a series of conclusions. See Sanzillo Decl.
¶ 7 (“Based on my review of these documents I conclude as follows . . . .”). Precisely how Mr.
Sanzillo’s review of the materials led him to reach his conclusions is nowhere described. For
example, he offers no explanation as to how the administrative record’s discussion of Xcoal’s
growth and limited access to alternative lines of credit caused him to determine that the removal
of a specified percentage of Xcoal’s available financing would cause a reduction in or cessation
of business. Put another way, the Court is unable to determine from Mr. Sanzillo’s declaration
how he journeyed from the Bank’s finding that third-party banking is necessary for Xcoal to his
conclusion that the loss of a particular $100 million line of credit in Xcoal’s $630 million credit
14
portfolio would cause the company to limit or end its business. 11 And despite the fact that
Defendants have raised a number of challenges to Mr. Sanzillo’s qualifications and the reliability
and admissibility of his conclusions, Plaintiffs have not suggested that additional information
about Mr. Sanzillo’s methodology is forthcoming or could be expected at trial. See Fed. R. Civ.
P. 56(c)(2) advisory committee notes (2010 Amendments) (explaining that at the summary
judgment stage, “[t]he burden is on the proponent to show that the material is admissible as
presented or to explain the admissible form that is anticipated”).
However, the failure of Mr. Sanzillo to identify the methodology or principles he applied
is only the first of several problems presented by his declaration. The Court is also concerned
about Mr. Sanzillo’s silence regarding whether financial experts are typically able to analyze a
business’s dependence on a particular source of financing from the type and quantity of evidence
that Mr. Sanzillo considered. Also troubling is Mr. Sanzillo’s failure to state how successful he
has been in the past at predicting whether a business would be able to continue to operate if a
certain percentage of its funding was rescinded. Cf. Estate of Gaither ex rel. Gaither v. District
of Columbia, 831 F. Supp. 2d 56, 70 (D.D.C. 2011) (holding that plaintiffs failed to show that
their expert’s opinion was the product of reliable principles and methods where there was no
record evidence indicating how often the expert’s predictions turn out to be correct). These
omissions are particularly concerning in light of the fact that Mr. Sanzillo reached his conclusion
regarding Xcoal’s financial dependence on the Bank’s guarantee without ever actually reviewing
Xcoal’s financials, which were redacted from the administrative record. While Mr. Sanzillo
could hardly be blamed for failing to analyze documents not available to him, the Court does
11
Mr. Sanzillo observes that Bank guarantees are generally intended to provide
borrowers with the liquidity and confidence to grow their business, and that Xcoal’s business did
grow in 2013, id. at 5–6, but he does not suggest that Xcoal’s other pre-established lines of credit
provided insufficient liquidity or were otherwise unable to support Xcoal’s business in 2013.
15
have serious reservations about his failure to acknowledge this limitation in his analysis or to
explain how he was able to determine Xcoal’s response to the rescission of the Bank’s guarantee
without access to facts or data regarding the company’s operating costs or credit utilization rate.
Cf. Parsi v. Daioleslam, 852 F. Supp. 2d 82, 89 (D.D.C. 2012) (explaining that the court was
unable to understand how plaintiff’s expert could “opine on whether defendant's writings were
properly substantiated,” without first “investigating defendant's source materials in any
systematic way,” and finding that “the ‘facts and data’ [the expert] relied on were patently
insufficient for the task he was given”); id. at 95 (“[I]t is hard to see how ‘doing the math’ could
be of any help to the factfinder when the math is so untethered from the reality of [the
company’s] finances.”).
Perhaps most significant, however, is the fact that Mr. Sanzillo’s declaration fails to
reconcile the limited facts he did consider with the ultimate conclusion that he reached. Mr.
Sanzillo found that Xcoal had already assembled a pre-existing line of credit totaling $530
million spread across multiple European banks “to support the company’s activities” before it
obtained the Bank’s $90 million loan guarantee. Sanzillo Decl. ¶ 10. Although he notes that in
December 2011, Xcoal was concerned about the future availability of its European lines of credit
in light of the then-existing European debt crisis, id. ¶ 11, he suggests neither that a $530 million
credit portfolio is insufficient to support Xcoal’s export business nor that the availability of that
line of credit was in jeopardy at the point in time relevant to determining Plaintiffs’ standing: the
date the complaint was filed, July 31, 2013. See Defenders of Wildlife, 504 U.S. at 569 n.4 (“The
existence of federal jurisdiction ordinarily depends on the facts as they exist when the complaint
is filed.” (internal quotation marks omitted)). In fact, Mr. Sanzillo offers no means of connecting
or reconciling the existence of sizeable alternative lines of credit with his conclusion regarding
16
what Xcoal would do if it lost the Bank’s support. There is thus a significant analytical gap
between Mr. Sanzillo’s conclusion and the data on which he relies, and without any information
regarding the methodology Mr. Sanzillo used, the Court is unable to bridge the gap. See Federal
Rule of Evidence 702 (allowing an expert witness to testify “if . . . the testimony is based on
sufficient facts or data” and “the expert has reliably applied the principles and methods to the
facts of the case”); Kumho Tire Co. v. Carmichael, 526 U.S. 137, 157 (1999) (“[N]othing in
either Daubert or the Federal Rules of Evidence requires a district court to admit opinion
evidence that is connected to existing data only by the ipse dixit of the expert.” (quoting Gen.
Elec. Co., 522 U.S. at 146). 12
Accordingly, the Court finds that Mr. Sanzillo’s opinion as to what Xcoal would do
without the loan guarantee is inadmissible and will not be considered because Plaintiffs have
failed to establish that it is a product of a reliable methodology properly applied to sufficient
facts and data such that it “rests on a reliable foundation.” See Daubert, 509 U.S. at 597(1993). 13
12
Although Mr. Sanzillo offers no explanation for the analytical gap, to the extent that
his declaration could be read to suggest that his experience fills the void, such an explanation,
standing alone, would clearly be inadequate. See Fed. R. Evid. 702 advisory committee's note
(2000 amends.) (explaining that when an expert relies “primarily on experience, then the witness
must explain how that experience leads to the conclusion reached, why that experience is a
sufficient basis for the opinion, and how that experience is reliably applied to the facts”).
13
Alternatively, the Court holds that even if Mr. Sanzillo’s opinion is admissible, it
would not alter the Court’s standing analysis, largely for the same reasons described above.
Although the Bank’s May 2012 explanation of Xcoal’s need for the loan guarantee may have
supported “the view that Xcoal would have to limit or end its business without the Ex-Im
revolving loan guarantee,” Sanzillo Decl. at 3, it does not suggest that the continuation of
Xcoal’s business was dependent upon the guarantee after the easing of the European bank crisis
and at the time that the operative complaint was filed, more than a year after the Bank authorized
the guarantee.
17
2. The McLane Declaration
Defendants have submitted to the Court the declaration of Craig McLane, Xcoal’s Vice
President of Finance. The McLane declaration details Xcoal’s financial position both at the time
that it sought the loan guarantee in 2011 and presently, disputes the ability of Xcoal to impose
environmental conditions on its service providers, and asserts that continuation of Xcoal’s
business operations did not in the past and does not at present depend on the Bank’s guarantee.
McLane Decl. at 1–2. In response, Plaintiffs first argue that because this case is currently at the
summary judgment stage, the Court should accept Plaintiffs’ standing-related assertions as true
and not consider contradictory assertions contained in the McLane declaration. Second, they
argue that portions of the McLane declaration are too speculative to be admissible. Neither
argument passes muster.
Beginning with Plaintiffs’ first argument, they are correct to the extent that they argue
that at summary judgment, this Court must take as true all “specific facts” set forth in Plaintiffs’
affidavits or other evidence, including those facts related to standing. See Defenders of Wildlife,
504 U.S. at 561; see also Earle v. District of Columbia., 707 F.3d 299, 304 (D.C. Cir. 2012)
(“[T]he court must view the evidence in the light most favorable to the nonmoving party, draw
all reasonable inferences in her favor, and eschew making credibility determinations or weighing
the evidence.” (internal quotation marks omitted)). At the same time, however, a non-movant
“may not rest upon mere allegation or denials of his pleading but must present affirmative
evidence showing a genuine issue for trial.” Laningham v. U.S. Navy, 813 F.2d 1236, 1241
(D.C. Cir. 1987) (internal quotation marks and citation omitted) (emphasis added); Defenders of
Wildlife, 504 U.S. at 561 (“In response to a summary judgment motion, however, the plaintiff
can no longer rest on such mere allegations, but must set forth by affidavit or other evidence
18
specific facts . . . .” (internal quotation marks and citation omitted)). Additionally, there is a
difference between accepting as true a plaintiff’s specific facts offered to show standing and
accepting as true the plaintiff’s conclusion that he or she has standing. See Nat’l Treasury Emps.
Union v. United States, 101 F.3d 1423, 1430 (D.C. Cir. 1996) (explaining that even at the motion
to dismiss stage, “[t]here is a difference between accepting a plaintiff’s allegations of fact as true
and accepting as correct the conclusions plaintiff would draw from such facts”). Thus, while the
Court will not credit any statements in the McLane declaration that are contradicted by Plaintiffs’
specific facts, Plaintiffs go too far in asking the Court to disregard the entirety of the McLane
declaration simply because Plaintiffs allege they have standing.
Next, Plaintiffs argue that portions of the McLane declaration on which Defendants
depend to contest Plaintiffs’ assertions of standing are inadmissible because they are too
speculative. Plaintiffs rely on Federal Rule of Evidence 602, which provides that the testimony
of a lay witness is admissible only if based on the witness’s personal knowledge. Fed. R. Evid.
602 (“A witness may testify to a matter only if evidence is introduced sufficient to support a
finding that the witness has personal knowledge of the matter.”). Specifically, Plaintiffs take aim
at Mr. McLane’s assertions that “[h]ad the PNC Bank export facility not been extended to Xcoal
in July of 2012, or had it subsequently been cancelled, Xcoal still would have been able to
finance its export business to international coal markets through its European trade banks.”
McLane Decl. ¶ 10. Plaintiffs argue that this statement constitutes impermissible speculation
because Mr. McLane could not possibly know how such events would have unfolded, and that
Plaintiffs are not required to negate such speculation to establish standing. Pls.’ Reply Support
Mot. Strike McLane Decl. at 5–6 (citing Duke Power Co. v. Carolina Evtl. Study Grp., Inc., 438
U.S. 59, 78 (1978)). Plaintiffs also note that Mr. McLane’s assertion is contrary to the implicit
19
findings of the Bank that Xcoal lacked sufficient financing and that the guarantee would support
exports that would not otherwise occur. See 12 U.S.C. § 635a-4 (directing the Bank to “establish
a program to provide guarantees . . . when in the judgment of the Board of Directors -- (1) the
private credit market is not providing adequate financing . . . ; and (2) such guarantees would
facilitate expansion of exports which would not otherwise occur”).
Defendants dispute Plaintiffs’ interpretation of the Bank’s authorizing statute, which they
argue requires consideration of factors like the availability of financing and the facilitation of
exports at the programmatic level, and does not require every individual guarantee to meet those
requirements. In addition, Defendants argue that Mr. McLane’s statement is based on first-hand
knowledge. According to the declaration, Mr. McLane has been Xcoal’s director of finance
since 2008, his duties include negotiating and administering “all of the credit facilities required,
or deemed prudent, for Xcoal’s exporting business,” and his statement is supported by the fact
that Xcoal “was only drawing down approximately 70% of [its] total available credit” when it
applied for the loan guarantee. McLane Decl. ¶¶ 1, 4, 7. Nevertheless, the Court is not
persuaded that Mr. McLane’s assertion is of any relevance in determining Plaintiffs’ standing.
The assertion that Xcoal “would have been able to finance its export business,” even if true, is of
little value standing alone because it makes no representation that Xcoal would have been able to
finance the same volume of coal exports in the absence of the Bank’s guarantee. On this basis,
and in light of the record evidence suggesting that the Bank did, in fact, consider Xcoal’s need
for the Bank’s financing prior to authorizing the guarantee, see AR 263, the Court will disregard
the McLane declaration’s statement regarding what Xcoal would have done had it not received
the financing in question in July 2012.
20
C. Associational Standing: CCAN, Friends of the Earth, Sierra Club, and WVHC
Having disposed of the preliminary questions of admissibility, the Court now considers
whether the four Plaintiffs bringing suit on behalf of their members – CCAN, Friends of the
Earth, Sierra Club, and WVHC – have established associational standing to bring the instant
action. 14 To establish standing to sue in a representative capacity, at least one of the plaintiffs
must show that “(1) at least one of its members would have standing to sue in his own right, (2)
the interests the association seeks to protect are germane to its purpose, and (3) neither the claim
asserted nor the relief requested requires that an individual member of the association participate
in the lawsuit.” Sierra Club, 292 F.3d at 898. At issue in this case is the first prong of the
associational standing test: whether Plaintiffs have established that their members would have
standing to sue in their own right. Defendants do not dispute Plaintiffs’ assertions that their
members are injured by pollution produced from the process of exporting coal, but they do
contend that Plaintiffs have failed to establish the second and third elements of standing:
causation and redressability. See Defs.’ Mem. Support Mot. Summ. J. at 11–25, ECF No. 64.
More specifically, Defendants argue that Plaintiffs have failed to show that the Bank’s decision
14
The Court notes that the nature of these Plaintiffs’ standing claims is not always clear.
Their complaint suggests that these four plaintiffs brought suit on behalf of themselves and their
members, see Compl. ¶¶ 11(b), 12(b), 13(b), 14(b), ECF No.1, but their motion for summary
judgment first states that they are bringing claims solely on behalf of their members, see Pls.’
Mem. Support Mot. Summ. J. at 12–13, before reverting to the posture that the claims are
brought both on behalf of the organizations and their members, see id. at 13–20. However, when
Plaintiffs describe the injuries giving rise to standing for these organizations, they only identify
injuries to their members and do not describe any injuries suffered by any of their organizations.
See id. Accordingly, to the extent that Plaintiffs intended to claim organizational standing to sue
on their own behalf in addition to associational standing to sue on behalf of their members, the
Court finds that they have failed to identify any organizational injuries and thus have failed to
establish standing to sue on their own behalf. See ASPCA v. Feld Entm't, Inc., 659 F.3d 13, 24–
25 (D.C. Cir. 2011) (holding that an organization suing on its own behalf must show that the
defendant’s action caused “a ‘concrete and demonstrable injury to the organization’s activities’
that is ‘more than simply a setback to the organization’s abstract societal interests’” (quoting
Havens Realty Corp. v. Coleman, 455 U.S. 363, 379 (1982)).
21
to authorize the guarantee to PNC on behalf of Xcoal caused an increase in the volume of coal
exported, or that an order of this Court rescinding the guarantee would cause Xcoal to reduce the
volume of coal it exports, thereby reducing the pollution injuring Plaintiffs’ members. Because
Plaintiffs have failed to establish any likelihood that third party Xcoal’s choices “will be made in
such manner as to . . . permit redressability of injury,” this Court agrees with Defendants that
Plaintiffs have failed to establish redressability and thus lack associational standing to pursue
their claims. See Ctr. for Law & Educ., 396 F. 3d at 1161.
The causation or traceability element of standing requires that “there must be a causal
connection between the injury and the conduct complained of—the injury has to be fairly
traceable to the challenged action of the defendant, and not the result of the independent action
of some third party not before the court.” Defenders of Wildlife, 504 U.S. at 560 (internal
quotation marks and alterations omitted). To establish the redressability element of standing, “it
must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable
decision.” Id. at 561 (internal quotation marks omitted); see also Vill. of Bensenville v. FAA, 457
F.3d 52, 69 (D.C. Cir. 2006) (“[F]or purpose of determining the petitioners’ standing, the court
must decide whether the practical consequence of [vacating the agency’s decision] would
amount to a significant increase in the likelihood that [plaintiffs’] would obtain relief that
directly redresses the injury suffered.” (internal quotation marks omitted)).
In a case like this concerning the alleged violation of procedural rights, the standards for
redressability and immediacy are relaxed to a certain extent, meaning that the Plaintiffs need not
establish with any certainty that the Bank would reach a different decision regarding the loan
guarantee if it first considered possible environmental consequences. See Defenders of Wildlife,
504 U.S. at 572 n.7 (noting that if a federal agency issues a license to authorize construction of a
22
dam without first preparing an EIS, individuals living adjacent to the dam have standing without
needing to show that the agency would have withheld the license had it prepared an EIS). 15 But
the agency’s decision is only one piece of the redressability puzzle in a case where a plaintiff
alleges that government funding to an independent third party 16 has caused the third party to
injure the plaintiff. In such cases, plaintiffs must satisfy normal redressability standards as to the
third party whose actions are directly causing the plaintiff’s injuries. St. John’s United Church
of Christ v. FAA, 520 F.3d 460, 463 (D.C. Cir. 2008) (holding that where plaintiffs alleged that
agency funding to a third party was authorized in violation of the plaintiff’s procedural rights,
redressability standards were relaxed only as to the agency and not the third party); see also Nat'l
Parks Conservation Ass'n v. Manson, 414 F.3d 1, 5 (D.C. Cir. 2005) (“The relaxation of
procedural standing requirements would excuse [Plaintiffs] from having to prove the causal
relationship regarding the [agency] action, but its burden regarding the action of the [third party]
would not change.”).
As a consequence, although Plaintiffs need not show that the Bank’s consideration of
environmental impacts would cause it to modify its decision, they must provide some basis for
15
The hypothetical scenario discussed by the Supreme Court in footnote 7 of Defenders
of Wildlife appears to fit within a category of cases identified by the D.C. Circuit as giving rise to
standing despite the fact that a plaintiff challenges government action on the basis of third-party
conduct: those cases where an agency’s action “permits or authorizes third-party conduct that
would otherwise be illegal in the absence of the Government’s action.” See Nat'l Wrestling
Coaches Ass'n, 366 F.3d at 940–41 (explaining that redressability is satisfied in such cases
“because the intervening choices of third parties are not truly independent of government
policy”).
16
See Bennett v. Donovan, 703 F.3d 582, 587–88 (D.C. Cir. 2013) (defining an
independent third party as a party who is “independent of government policy with respect to the
action at issue in a particular case,” and who can continue to act in the manner harming
plaintiffs regardless of whether the agency action at issue is declared unlawful by a court).
23
finding that the “nonagency activity” that affects them – namely, Xcoal’s exporting of coal –
“will be altered or affected by the agency activity they seek to overturn.” St. John’s United
Church of Christ, 520 F.3d at 463 (quoting Defenders of Wildlife, 504 U.S. at 571); see also
Newdow v. Roberts, 603 F.3d 1002, 1012 (D.C. Cir. 2010) (applying Defenders of Wildlife’s
“third party” analysis to the redressability prong of the standing test); Renal Physicians Ass'n v.
U.S. Dep't of Health & Human Servs., 489 F.3d 1267, 1275 (D.C. Cir. 2007) (“[T]o establish
redressability . . . we required that the facts alleged be sufficient to demonstrate a substantial
likelihood that the third party directly injuring the plaintiff would cease doing so as a result of
the relief the plaintiff sought.”).
Plaintiffs contend that they have been injured by export-related pollution produced by
coal mining and transportation, that the Bank’s loan guarantee to PNC allowed Xcoal to export
more coal than would have been possible without the Bank’s assistance, 17 and that rescinding the
Bank’s financing for the remainder of the loan term will reduce the additional coal that Xcoal
can export until the Bank conducts an EIS in compliance with NEPA. Pls.’ Reply Support Mot.
Summ. J. at 1–2, ECF No. 70. Plaintiffs’ assertion of redressability thus hinges on the
proposition that if this Court orders the Bank to rescind its guarantee and comply with NEPA: (1)
regulated third party PNC will, in turn, rescind, reduce, or otherwise modify its loan to third
party Xcoal, (2) Xcoal will respond to this change in available credit by reducing the amount of
coal that it exports, and (3) the reduction in Xcoal’s exports will decrease the coal-related
17
Notably, although Plaintiffs argue that the loan guarantee enabled Xcoal to export more
coal than otherwise would have been possible, they do not – and indeed, could not – argue that
the Bank’s decision to authorize the loan guarantee “permits or authorizes third-party conduct
that would otherwise be illegal in the absence of the Government’s action.” Nat'l Wrestling
Coaches Ass'n, 366 F.3d at 940 (identifying instances where an agency authorizes otherwise
illegal conduct as one of the two categories of cases where standing has been found despite the
fact that the plaintiff challenged government action on the basis of harm from a third-party’s
conduct).
24
pollution harming Plaintiffs’ members. Unfortunately for Plaintiffs, however, a review of the
administrative record and the parties’ declarations shows that Plaintiffs have failed to establish
that any alteration in the Bank’s decision to authorize the loan guarantee could or would affect
the amount of coal that Xcoal exports.
The declarations of Plaintiffs members all describe the negative effects of coal pollution,
concern that the loan guarantee will increase pollution, and the belief that the members’ interests
would be better protected by the Bank’s compliance with NEPA. 18 As Defendants point out,
however, the members’ hopes or beliefs that an order rescinding the guarantee would redress
their injuries, however genuine, do not constitute “specific facts” showing redressability. See
Wilkerson v. Wackenhut Protective Servs., Inc., 813 F. Supp. 2d 61, 67 (D.D.C. 2011)
(explaining that personal belief, speculation, and hearsay are insufficient to defeat a motion for
summary judgment). Plaintiffs also assert in their reply brief that a favorable decision by this
court ordering the Bank to rescind the guarantee “would reduce the volume of coal exported and
directly redress Plaintiffs’ substantive harms,” Reply Support of Pls.’ Mot. for Summ. J. at 10,
but they cite nothing in the record to support this assertion. See Defenders of Wildlife, 504 U.S.
at 561 (“In response to a summary judgment motion, . . . the plaintiff can no longer rest on such
mere allegations, but must set forth by affidavit or other evidence specific facts . . . .” (internal
quotation marks and citation omitted)).
The McLane declaration, in contrast, contains specific facts supporting Defendants’
assertion that because Xcoal has accumulated enough alternative sources of credit, even if
Plaintiffs obtain the relief they seek, the company’s coal exports will continue unchecked and
Plaintiffs’ injury will not be redressed. Cf. Vill. of Bensenville, 457 F.3d at 70 (holding that
18
See Bullard Decl. at 2–4; Cook Decl. at 2–4; Fox Decl. at 2–4; Ortega Decl. at 2–5;
Rank Decl. at 2–4; Reed Decl. at 2–4; Ware Decl. at 2–4.
25
petitioners’ injury was not redressable by a decision vacating $337 million in agency funding for
a project because the project could continue on the basis of other sources of financing).
Specifically, Mr. McLane testified that because the “European banking crisis has eased
substantially” since Xcoal completed its application for the loan guarantee in December 2011,
“even in the absence of the PNC Bank export facility, Xcoal would readily be able to support its
current volume of business through its unused and available financing.” McLane Decl. ¶ 10. As
support, Mr. McLane explains that “Xcoal has available approximately $535 million in
commodity trade facilities, including the $100 million facility from PNC, spread among eight (8)
lending institutions . . . .” Id. ¶ 8. The Bank’s loan guarantee thus supports 18.7% of Xcoal’s
total credit. Although 18.7 is not an insignificant percentage, the McLane declaration further
reveals that Xcoal’s credit utilization rate is only 30%, meaning that the company has
“approximately $374 million in unused credit available.” Id.
In response to Mr. McLane’s declaration, Plaintiffs have not come forward with any
specific facts that rebut or cast doubt on Mr. McLane’s testimony. They do not dispute his
assertion that the European banking crisis has eased substantially or that Xcoal is only using 30%
of its available lines of credit. They do not suggest that Xcoal’s existing alternative lines of
credit are unstable or insufficient, or that Mr. McLane has in any way misrepresented Xcoal’s
available financing. Although the Sanzillo declaration posits that it would be difficult for Xcoal
to obtain additional sources of funding at this time given the present state of the coal industry,
see Sanzillo Decl. at 6–9, that fact does nothing to dispute the Defendants’ assertion that the
financing Xcoal has already obtained is sufficient to support its export business. Similarly, even
if Mr. Sanzillo is correct that Xcoal “would have agreed” to environmental conditions imposed
by the Bank because its financing “was imperiled” by the European debt crisis when it sought the
26
Bank’s assistance in 2011, see id. ¶ 22, he does not suggest that Xcoal’s pre-existing financing
was perceived to be at risk by the time that Plaintiffs filed their complaint in 2013. 19 See
Freedom Republicans, Inc. v. FEC, 13 F.3d 412, 418 (D.C. Cir. 1994) (observing that while
“[c]ausation remains inherently historical[,] . . . redressability [is] quintessentially predictive”).
On facts like these, the D.C. Circuit Court’s redressability analysis in St. John’s United
Church of Christ v. FAA, 520 F.3d 460 (D.C. Cir. 2008), is particularly instructive. In that case,
plaintiffs sought to challenge the Federal Aviation Administration’s (“FAA”) $29.3 million
airport improvement grant to the City of Chicago. Id. at 462. The grant was one of several from
the agency designed to reimburse Chicago for up to $337 million spent on airport improvement
projects that plaintiffs claimed would cause them a variety of injuries. Id. at 461. The plaintiffs
argued that the FAA’s decision to award the grant violated their procedural rights and caused
their injuries, and that their injury was redressable because Chicago could not complete the
projects in question without the FAA’s assistance. Id. at 462. The Circuit Court disagreed,
however, and found that Chicago provided most of its own funding “and [was] prepared to
obtain funding from other sources if federal money is unavailable.” Id. at 463. Because Chicago
was committed to completing the project with or without FAA funding, which was replaceable,
the court held that the plaintiffs had failed to establish redressability because they did not show a
“substantial probability” that the city “would scrap the . . . project if the court vacated the $29.3
19
As previously discussed, Mr. Sanzillo’s conclusion that the “Bank’s explanation of
Xcoal’s need for the loan guarantee supports the view that Xcoal would have to limit or end its
business without the Ex-Im Bank revolving loan guarantee” is inadmissible, and because
Plaintiffs have not provided any basis for this Court to conclude that it is capable of being
converted into admissible evidence, it will not be considered by the Court. See Part III.B.1,
supra; see also Gleklen v. Democratic Cong. Campaign Comm., Inc., 199 F.3d 1365, 1369 (D.C.
Cir. 2000) (explaining that where a plaintiff would not be permitted to testify about inadmissible
evidence at trial, that inadmissible evidence “counts for nothing” at the summary judgment
stage).
27
million grant.” Id. (explaining that the plaintiffs’ “redressability obstacle” was “uncertainty over
what Chicago would do—not the FAA,” so petitioners had to satisfy normal redressability
standards despite their claim of procedural injury). The court concluded that on the facts before
it, it was “entirely conjectural whether the nonagency activity that affects petitioners will be
altered or affected by the agency activity they seek to overturn.” Id. (internal quotation marks
omitted).
Plaintiffs here run into the same “redressability obstacle” as the petitioners in St. John’s.
The proposition that Xcoal would export less coal if the Court orders the Bank to rescind its
guarantee is, at best, entirely conjectural in light of the availability of alternative funds and
Xcoal’s stated commitment to exporting the same volume of coal regardless of whether the loan
guarantee is rescinded. Such record evidence “that the third parties whose conduct injured the
plaintiffs would have had reason to continue their injurious conduct unaltered in the absence of
the challenged government action” is significant, and distinguishes the case at hand from those
cases “where the record presented substantial evidence of a causal relationship between the
government policy and the third-party conduct, leaving little doubt as to causation and the
likelihood of redress.” Nat'l Wrestling Coaches Ass'n, 366 F.3d at 941–43.
Accordingly, even if the Court accepts Plaintiffs’ position that the guarantee authorized
in May 2012 was intended to support an increase in exports, and even if the Court assumes
traceability, in light of the uncontested specific facts of the McLane declaration, Plaintiffs are
still no closer to establishing that their injury was redressable at the time they filed their
complaint. See Renal Physicians Ass'n v. U.S. Dep't of Health & Human Servs., 489 F.3d 1267,
1278 (D.C. Cir. 2007) (“[C]ausation does not inevitably imply redressability.”); see also Bennett
v. Donovan, 703 F.3d 582, 587 (D.C. Cir. 2013) (summarizing cases in which no redressability
28
was established despite the fact that “third parties . . . took actions because of allegedly unlawful
agency decisions” where the third parties “would have no compelling reason to reverse those
actions were the [agency] decisions held unlawful by a court”). As the D.C. Circuit Court
explained in Renal Physicians, there are cases where “governmental action is a substantial
contributing factor in bringing about a specific harm, but the undoing of the governmental action
will not undo the harm, because the new status quo is held in place by other forces.” 489 F.3d at
1278.
In sum, Plaintiffs have failed to show that a favorable decision from this Court is likely to
cause Xcoal to reduce the volume of its exports. See Defenders of Wildlife, 504 U.S. at 561 (“[I]t
must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable
decision” of the Court. (internal quotation marks omitted)); see also Nat'l Wrestling Coaches
Ass'n, 366 F.3d at 938 (“[T]he Supreme Court has made clear that a plaintiff's standing fails
where it is purely speculative that a requested change in government policy will alter the
behavior of regulated third parties that are the direct cause of the plaintiff's injuries.”).
Defendants have presented specific facts establishing that the European banking crisis has eased
substantially since December 2011, that Xcoal has $535 million in credit, that the company’s
credit utilization rate is only 30%, and that Xcoal “would readily be able to support its current
volume of business” with its existing lines of credit even if the Bank rescinded its loan
guarantee. See McLane Decl. ¶¶ 7, 10. Plaintiffs have not come forward with any evidence that
casts doubt on these facts. See also Brady Campaign to Prevent Gun Violence United with the
Million Mom March v. Ashcroft, 339 F. Supp. 2d 68, 78 (D.D.C. 2004) (“[A]bsent such factual
allegations to demonstrate how the relevant third parties are likely to conduct themselves if the
requested judicial relief were to be granted, the [Plaintiff] fails to satisfy the heavy burden
29
imposed by the . . . redressability prong of the standing inquiry where third party action is a
cause of injury.”).
Accordingly, the Court concludes that Plaintiffs have failed to establish that a favorable
decision by this Court could redress their injuries. Cf. Defenders of Wildlife, 504 U.S. at 571(holding that the fact that agencies supplied only a fraction of the funding for a disputed project
was an “impediment to redressability” where “Respondents have produced nothing to indicate
that the projects they have named will either be suspended, or do less harm to listed species, if
that fraction is eliminated.”). Plaintiffs CCAN, Friends of the Earth, Sierra Club, and WVHC
have thus failed to establish an essential element of Article III standing.
D. Organizational Standing: CIEL and Pacific Environment
Plaintiffs CIEL and Pacific Environment both allege that they have been harmed by the
Bank’s decision to authorize a $90 million loan guarantee on behalf of a coal exporter without
first considering the potential environmental consequences. Unlike CCAN, Friends of the Earth,
Sierra Club, and WVHC, however, Plaintiffs CIEL and Pacific Environment do not claim to
have standing to sue on behalf of their members who are harmed by coal-export related
pollution. Instead, both CIEL and Pacific Environment claim standing in their own right,
arguing that they have each suffered injuries to their organizations’ missions, activities, and
resources sufficient to convey organizational standing under Havens Realty Corp. v. Coleman,
455 U.S. 363 (1982). See Pls.’ Reply Support Mot. for Summ. J. at 13. Defendants dispute this
claim, arguing that the organizations have failed to establish standing because they have failed to
show injury-in-fact. Defendants point out that mere interest in a topic or tension between agency
action and an organization’s policy agenda is insufficient to convey standing under the test
established by the Supreme Court in Havens. See Mem. Support Defs.’ Mot. Summ. J. at 25–26.
30
Based on the record established by the parties, the Court agrees with Defendants that neither
CIEL nor Pacific Environment has established the injury in fact necessary to convey
organizational standing.
“To show injury-in-fact, an organization must allege more than a mere ‘setback to [its]
abstract social interests.’” Competitive Enter. Inst. v. Nat'l Highway Traffic Safety Admin., 901
F.2d 107, 122 (D.C. Cir. 1990) (quoting Havens Realty Corp., 455 U.S. at 378–79).
Accordingly, mere organizational interest in the environment, “no matter how longstanding the
interest and no matter how qualified the organization is in evaluating the problem, is not
sufficient by itself to render [an] organization adversely affected or aggrieved within the
meaning of the APA.” Sierra Club v. Morton, 405 U.S. 727, 739 (1972) (internal quotation
marks omitted) (holding that the Sierra Club’s well-established interest in protecting the
environment was not enough to give the organization standing to challenge governmental action
that was harmful to the environment). As the Supreme Court explained in Havens, an
organization suing on its own behalf can establish standing by showing that a defendant’s actions
have “perceptibly impaired” the organization’s ability to provide services, such that there has
been a “concrete and demonstrable injury to the organization’s activities – with [a] consequent
drain on resources.” 455 U.S. at 379; see also Competitive Enter. Inst., 901 F.2d at 122(requiring organization claiming injury to allege “that discrete programmatic concerns are being
directly and adversely affected by the challenged actions” (internal quotation marks omitted)).
Building on the Supreme Court’s analysis in Havens, the D.C. Circuit has established two other
requirements that must be met in an organizational injury case. First, the government’s conduct
must “directly conflict with the organization’s mission,” Nat'l Treasury Emps. Union v. United
States, 101 F.3d 1423, 1430 (D.C. Cir. 1996) (“[I]n those cases where an organization alleges
31
that a defendant’s conduct has made the organization’s activities more difficult, the presence of a
direct conflict between the defendant’s conduct and the organization’s mission is necessary –
though not alone sufficient – to establish standing.”). And second, the organization must show
that it has expended resources to counteract the injury to its ability to achieve its mission and not
simply as a product of “unnecessary alarmism constituting a self-inflicted injury.” Id.
1. Pacific Environment
The Court begins by considering Plaintiff Pacific Environment’s assertion of
organizational injury. To support its claim of injury in fact, Pacific Environment has provided
the Court with the declaration of the organization’s policy director, Douglas Norlen. See Norlen
Decl., ECF No. 56-9. Citing the Norlen declaration, Plaintiffs argue that Pacific Environment
has established Havens standing in this case by showing that the Bank’s decision to authorize the
loan guarantee: (1) conflicts with the organization’s mission, and (2) “will require Pacific
Environment to devote additional resources to its work promoting environmentally responsible
financing.” Pls. Mot. Summ. J. at 23–24. A careful review of the Norlen declaration, however,
reveals that it falls short of establishing standing under Havens.
As the Norlen declaration explains, Pacific Environment is an organization incorporated
and headquartered in California. Norlen Decl. ¶ 3. The organization’s mission “is to strengthen
democracy, support grassroots activism, empower local communities, and redefine international
policies in order to protect the living environment of the Pacific Rim.” Id. ¶¶ 3–4 (emphasis
added). Although the organization has pursued its mission with a range of activities, including
efforts to reform the Bank’s regulations and to require the Bank to adequately assess the
environmental impacts of fossil fuel projects, the declaration does not suggest that the specific
agency action challenged in this case has any potential whatsoever to affect “the living
32
environment of the Pacific Rim.” Cf. Nat’l Treasury Emps. Union, 101 F.3d at 1430 (granting
motion to dismiss for lack of standing where organization failed to establish a direct conflict
between its mission of improving worker conditions and the legislation it sought to challenge).
In the absence of any evidence suggesting that the particular loan guarantee at issue in this case
has even the potential to affect the environment of the Pacific Rim, the Court is unable to discern
any direct conflict between the challenged agency action and the mission of Pacific
Environment.
The Norlen declaration does assert that the Bank has harmed Pacific Environment by
“impeding its objectives of requiring financial institutions to increase their accountability and
improve their environmental policies.” Norlen Decl. ¶ 12. But it is well-established in this
Circuit that “[f]rustration of an organization’s objectives is the type of abstract concern that does
not impart standing.” Nat’l Treasury Emps. Union, 101 F.3d at 1429 (internal quotation marks
omitted). Rather, it is the kind of “setback to the organization’s abstract social interests,” that
does not constitute a “concrete and demonstrable injury to the organization’s activities.” Id. at
1428. Compare Havens, 455 U.S. at 379 (holding that organization could sue on its own behalf
where challenged agency action “perceptibly impaired [the organization’s] ability to provide
counseling and referral services”) with Dellums v. U.S. Nuclear Regulatory Comm’n, 863 F.2d
968, 972 (D.C. Cir. 1988) (“Even assuming the [agency’s] orders would adversely affect the
[organization’s] general interest [in opposing nuclear proliferation and ensuring proper
safeguards for nuclear energy], this court has consistently held that harm to an interest in ‘seeing’
the law obeyed or a social goal furthered does not constitute injury in fact.” (internal quotation
marks omitted)). At the summary judgment stage, Plaintiffs’ failure to establish that the agency
33
action in question directly contradicts the organization’s mission is fatal. 20 ASPCA, 659 F.3d at
25 (explaining that “[i]f the challenged conduct affects an organization’s activities, but is neutral
with respect to its substantive mission,” the D.C. Circuit has “found it entirely speculative
whether the challenged practice will actually impair the organization’s activities” (internal
quotation marks omitted)).
Even if Pacific Environment had established a direct conflict between its mission and the
Bank’s authorization of the loan guarantee, however, the group still would fall short of
establishing injury in fact under Havens. Plaintiffs argue that Pacific Environment has
established concrete and particularized organizational injury by claiming that the Bank’s
interference with its mission will cause the organization “to increase its resources for its
advocacy to strengthen environmental requirements in Ex-Im Bank’s policies.” Norlen Decl. ¶
12. But apart from stating the Bank has generally frustrated the organization’s objectives, the
Norlen declaration does not identify a single organizational activity or service that the Bank’s
decision has impeded. Neither does the declaration explain how or why an increase in advocacy
resources is necessary to counteract the unidentified impediment to the organization’s activities
caused by the Bank’s decision. See Nat’l Treasury Emps. Union, 101 F.3d at 1430 (explaining
the even accepting the truth of the factual allegation that the plaintiff expended additional
lobbying funds, the court would not credit the plaintiff’s unsupported conclusion that the
20
Typically, if an organization fails to establish a conflict between the defendant’s action
and the organization’s mission, the Court need not proceed to the next step of the Havens
standing inquiry. See ASPCA v. Feld, 659 F.3d 13, 25 (D.C. Cir. 2011) (“[W]e begin our inquiry
into Havens standing by asking whether the defendant’s allegedly unlawful activities injured the
plaintiff’s interest in promoting its mission. If the answer is yes, we then ask whether the plaintiff
used its resources to counteract that injury.”). As the D.C. Circuit explained in National
Treasury, “[a]bsent a direct conflict” between the organization’s mission and the challenged
legislation, it is difficult to determine whether an organization’s “additional expenditure of
[lobbying] funds is truly necessary” to achieve the group’s mission “or rather is unnecessary
alarmism constituting a self-inflicted injury. 101 F.3d at 1430.
34
expenditures were “a necessary link in achieving the organization’s ultimate purpose”). In the
absence of such facts, Pacific Environment’s assertion that it will dedicate additional resources to
advocacy at some unspecified date in the future resembles a self-inflicted harm and not injury in
fact that is fairly traceable to the Bank’s actions. See id. (characterizing an organization’s
expenditures on lobbying as “unnecessary alarmism constituting a self-inflicted injury” where
the plaintiff had failed to provide facts showing that the expenditures were a necessary link to
achieve the organization’s ultimate purpose); Fair Emp’t Council of Greater Wash., Inc. v. BMC
Mktg. Corp., 28 F.3d 1268, 1277 (D.C. Cir. 1994) (holding that although “[t]he diversion of
resources . . . might well harm the [plaintiff’s] other programs, for money spent on testing is
money that is not spent on other things,” such self-inflicted harm was a budgetary choice and
“not really a harm at all” where “the [plaintiff] and its programs would have been totally
unaffected [by the defendant’s act] if it had simply refrained from making the re-allocation”).
Similarly, a plaintiff “cannot convert its ordinary program costs into an injury in fact,”
unless the government’s actions have required the organization to expend resources to pursue its
mission. See Nat’l Taxpayers Union, 68 F.3d at 1434 (holding that where organization was
dedicated to promoting fair and legal revenue-raising by the U.S. government, the group’s
decision to challenge the legality of a tax provision did not constitute injury in fact, it was
simply an ordinary program cost); see also Humane Society of the U.S. v. Vilsack, 19 F. Supp. 3d
24, 46 (D.D.C. 2013) (holding that where spending funds to counteract unfavorable legislation
was a normal party of the Humane Society’s mission and operations, “being prompted to do it
can hardly qualify as an injury that confers constitutional standing”); id. (“[T]he fact that they
have decided to redirect some of their resources from one legislative agenda to another is
insufficient to give them standing.”).
35
As the Norlen declaration explains, Pacific Environment has been advocating to reform
and strengthen the Bank’s environmental regulations since 1997. Norlen Decl. ¶¶ 6, 7. It thus
appears that advocating for stronger environmental requirements for the Bank is an “ordinary
program cost” for Pacific Environment and not a response to or consequence of the Bank’s
authorization of the loan guarantee in question. See Nat'l Ass'n of Home Builders v. EPA, 667
F.3d 6, 12 (D.C. Cir. 2011) (“As for the other expenditures claimed, [plaintiff] has not shown
they were for ‘operational costs beyond those normally expended’ to carry out its advocacy
mission.”); Conservative Baptist Ass'n of Am., Inc. v. Shinseki, No. 13-cv-1762, 2014 WL
2001045, at *5 (D.D.C. May 16, 2014) (“Any resources that [plaintiff] expended . . . were in the
normal course of [the organization’s] operations, and it cannot convert its ordinary activities and
expenditures . . . into an injury-in-fact.”); Elec. Privacy Info. Ctr. v. U.S. Dep't of Educ., No. 12-
cv-0327, 2014 WL 449031, at *16 (D.D.C. Feb. 5, 2014) (“[Plaintiff] cannot convert an ordinary
program cost—advocating for and educating about its interests—into an injury in fact.”).
Also missing from the Norlen declaration is any mention of when such an allocation of
organizational resources might take place, let alone a suggestion that the organization has in fact
had to reallocate resources. These omissions are particularly concerning in light of the fact that
the Norlen declaration was filed nearly two years after the Bank approved the loan guarantee in
question, which has a three year term due to expire in a matter of months. See Equal Rights Ctr.
v. Post Properties, Inc., 633 F.3d 1136, 1141-42 (D.C. Cir. 2011) (finding declaration and
“frustration of mission damages” calculations by plaintiff inadequate to support claim of
organizational injury at the summary judgment stage because “[d]espite the substantial passage
of time from the filing of its lawsuit, the [organization did] not spell out when it engaged in the
specified activities”); see also Nat'l Taxpayers Union, 68 F.3d at 1434 (holding that
36
organization’s “self-serving observation that it has expended resources to educate its members
and others regarding [challenged statutory provision] does not present an injury in fact”).
As a final matter, the Court acknowledges that Pacific Environment is concerned that the
Bank “will continue to fund major fossil fuel and mining projects throughout the world,” and that
if it does so, “[t]his will require Pacific Environment to devote additional resources to its work to
promote environmentally responsible financing, including through monitoring Ex-Im Bank’s
financing policy and practice.” Norlen Decl. ¶ 13.
While these concerns regarding potential future actions of the Bank may be genuine, they
are beyond the scope of this case, which is concerned only with the Bank’s authorization of a
single loan guarantee in May 2012 on behalf of Xcoal. Plaintiffs have not presented any broader
challenges to the Bank’s policies or regulations, and they have not identified any other
applications for Bank financing that could be implicated by the Court’s decision. In short,
Pacific Environment’s concerns about potential future harm caused by future actions of the Bank
not challenged by Plaintiffs in the instant action, and its speculation about the expenditures the
organization may need to take to counter such actions should they occur, is precisely the type of
“conjectural” or “hypothetical” injury that is insufficient to establish injury in fact for standing
purposes. See Clapper v. Amnesty Int'l USA, ––– U.S. ––––, 133 S.Ct. 1138, 1151 (2013)
(holding that plaintiffs “cannot manufacture standing merely by inflicting harm on themselves
based on their fears of hypothetical future harm that is not certainly impending”).
In sum, Pacific Environment has shown neither a conflict between the Bank’s action and
the organization’s ultimate mission, nor a perceptible impediment to the group’s activities that is
traceable to the Bank’s decision, nor a “consequent” drain on the organization’s resources caused
37
by the group’s efforts to counteract that harm. Pacific Environment has failed to establish
organizational standing under Havens.
2. CIEL
As to CIEL, Plaintiffs argue that the Bank’s authorization of the loan guarantee
“demonstrably harms” the international environmental organization and its mission in two ways:
by undermining the group’s energy policy work and by interfering with its public education
efforts. Citing the declaration of Alyssa Johl, a senior attorney with CIEL, Plaintiffs first argue
that the approval of the loan guarantee “undermines CIEL’s work” to promote sustainable energy
policies, requiring CIEL “to put extra time and resources into monitoring Ex-Im Bank’s
policies.” Pls.’ Mem. Support Mot. Summ. J. at 22. Second, Plaintiffs argue that the Bank’s
violation of CIEL’s procedural rights “has caused CIEL to expend additional effort to inform the
public about coal financing and its potential effects.” Id. Defendants, on the other hand, argue
that Plaintiffs have done no more than to establish an interest in a problem coupled with
unfavorable action, and they point out that a conflict with the organization’s policy agenda alone
is insufficient to establish injury in fact. Defs.’ Mem. Support Mot. Summ. J. at 26. The Court
considers each of CIEL’s claims of injury in turn. 21
CIEL’s first claim of injury is that the Bank’s approval of the $90 million loan guarantee
has undermined the group’s energy policy work. Applying the Havens standing inquiry to the
facts of this case, the Court asks first whether the Bank’s allegedly unlawful authorization of the
21
Although the Johl declaration also notes CIEL’s concerns about possible Bank
financing of other coal exports in the future and the possibility that CIEL would have to devote
additional resources to counteract such decisions if that should occur, see Johl Decl. ¶ 11,
Plaintiffs have wisely elected not to argue organizational injury on the basis of such hypothetical
scenarios that are beyond the scope of the instant action. See Clapper, 133 S.Ct. at 1151(holding that plaintiffs “cannot manufacture standing merely by inflicting harm on themselves
based on their fears of hypothetical future harm that is not certainly impending”).
38
$90 million loan guarantee directly conflicts with CIEL’s mission and impedes the
organization’s activities, Nat’l Treasury Emps. Union, 101 F.3d at 1430, and if so, whether CIEL
“undertook . . . expenditures in response to, and to counteract, the effects of” the Bank’s
authorization of the loan guarantee, Equal Rights Ctr., 633 F.3d at 1140. According to the Johl
declaration, CIEL’s mission is “to use the power of law to protect the environment, promote
human rights, and ensure a just and sustainable society.” Johl Decl. ¶ 4. Plaintiffs have provided
evidence that coal mining and transportation has harmful consequences for the environment, see
generally Hansen Decl.; Johannesson Decl.; Sahu Decl., which suggests that the Bank’s
provision of financial support to a coal exporter like Xcoal may well be in conflict with CIEL’s
overall environmental mission.
As the Supreme Court explained in Defenders of Wildlife and Sierra Club, however, a
plaintiff must establish not only that it possesses a special interest in protecting the environment
and that the agency action in question is likely to harm some part of the environment, but also
that the plaintiff is “directly affected apart from their special interest in the subject” by the
government’s allegedly unlawful actions. See Defenders of Wildlife, 504 U.S. at 563; id. at 567(“It goes beyond the limit . . ., and into pure speculation and fantasy, to say that anyone who
observes or works with an endangered species, anywhere in the world, is appreciably harmed by
a single project affecting some portion of that species with which he has no more specific
connection.”); Sierra Club, 405 U.S. at 739 (“[I]f a ‘special interest’ in [protecting the
environment] were enough to entitle the Sierra Club to commence this litigation, there would
appear to be no objective basis upon which to disallow a suit by any other bona fide ‘special
interest’ organization however small or short-lived.”). Accordingly, the Court must next ask
whether the Bank’s authorization of the loan guarantee caused a “concrete and demonstrable
39
injury” to CIEL’s activities, and whether CIEL undertook “expenditures in response to, and to
counteract, the effects of” the Bank’s action. Equal Rights Ctr., 633 F.3d at 1138–40 (internal
quotation marks omitted).
The Johl declaration, on which Plaintiffs rely to demonstrate standing, first asserts
generally that the Bank’s authorization “frustrates CIEL’s efforts” to achieve its mission. But as
discussed previously, mere “[f]rustration of an organization’s objectives is the type of abstract
concern that does not impart standing.” Nat’l Treasury Emps. Union, 101 F.3d at 1429 (internal
quotation marks omitted). Ms. Johl next asserts that the Bank’s decision to authorize the $90
million loan guarantee “frustrates CIEL’s work to promote environmentally sustainable energy
policies and has required CIEL to put extra time and resources into monitoring Ex-Im Bank’s
policies.” Johl Decl. ¶ 9. At the motion to dismiss stage, such assertions may have been
sufficient to establish standing. See Abigail Alliance for Better Access to Developmental Drugs
v. Eschenbach, 469 F.3d 129, 132 (D.C. Cir. 2006) (“At the motion to dismiss stage, general
factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion
to dismiss we presume that general allegations embrace those specific facts that are necessary to
support the claim.” (internal quotation marks omitted)). But at the summary judgment stage, and
in light of Defendants’ challenge to plaintiffs’ claims of organizational injury, Plaintiffs were
obligated to provide “specific facts” to show concrete ways in which CIEL’s programmatic
activities were harmed by the Bank’s authorization of the $90 million loan guarantee. See Fla.
Audubon Soc., 94 F.3d at 666 (“As we are reviewing a motion for summary judgment, we
require specific facts, not ‘mere allegations,’ to substantiate each leap necessary for standing.”).
The Johl declaration, however, does not contain such specific facts. For example, Ms.
Johl suggests neither that approval of the loan guarantee has “perceptibly impaired” CIEL’s
40
ability to advocate for energy policy reform in the United States or elsewhere, nor that it has
resulted in the spread of harmful information that was damaging to CIEL’s policy work.
Compare Spann v. Colonial Vill., Inc., 899 F.2d 24, 28 (D.C. Cir. 1990) (finding injury where
defendant’s advertisements allegedly encouraged discriminatory attitudes and steered black
home buyers and renters away from the advertised complexes) with ASCPA, 659 F.3d 27–28
(finding no standing where organization claimed that its animal advocacy efforts were impaired
by defendant’s public poor treatment of animals but failed to show that defendants’ actions
actually fostered a public impression that the poor treatment of animals was acceptable).
Although the Johl declaration makes clear that CIEL disapproves of the Bank’s decision to
finance coal exports, more is required to connect the particular decision at issue with the alleged
harm to CIEL’s sustainable energy policy work. See Fla. Audubon Soc’y, 94 F.3d at 668
(holding that plaintiff must connect the agency’s “substantive decision to the plaintiff’s
particularized injury”); see also Havens, 455 U.S. at 379 (distinguishing organizational injury
giving rise to Article III standing from what is merely “a setback to the organization’s abstract
social interest”).
However, even if the Court assumes that the loan guarantee has perceptibly impaired
CIEL’s policymaking efforts, two additional obstacles to a finding of injury in fact remain. First,
case law in this circuit has cast significant doubt on the viability of a claim of organizational
injury premised solely on injury to an organization’s advocacy efforts. See Ctr. for Law & Educ.
v. Dept. of Educ., 396 F.3d 1152, 1161–62 (D.C. Cir. 2005) (holding that organizational
plaintiffs failed to demonstrate standing where “the only ‘service’ impaired is pure issue-
advocacy – the very type of activity distinguished by Havens”); Humane Society of U.S., 19 F.
Supp. 3d at 45–47 (explaining that the D.C. Circuit has not found standing when the only
41
organizational service impaired was pure advocacy, and finding inadequate the plaintiff’s
allegation of injury on the basis of needing to dedicate additional resources to lobbying); Scenic
Am., Inc. v. U.S. Dep't of Transp., 983 F. Supp. 2d 170, 177 (D.D.C. 2013) (observing that “the
law is also quite skeptical of alleged organizational injuries related to lobbying and issue
advocacy”). As the D.C. Circuit Court has explained, a claim of organizational injury based
solely on the impairment of issue advocacy efforts comes perilously close to conferring standing
on the impermissible basis of mere frustration of an organization’s objectives. Ctr. for Law &
Educ., 396 F.3d at 1161. But see ASPCA, 659 F.3d at 27 (declining to decide whether injury to
an organization’s advocacy efforts was sufficient injury for Havens standing when plaintiff failed
to establish causation).
Second, CIEL has failed to provide sufficient facts that would allow the Court to find that
the organization’s expenditures on monitoring Bank policy are a consequence of the Bank’s
decision and not an ordinary program cost or self-inflicted harm. In National Treasury
Employees Union, the D.C. Circuit explained that although a court must accept as true an
allegation that an organization has expended resources, “there is a difference between accepting
a plaintiff’s allegations of fact as true and accepting as correct the conclusions plaintiffs would
draw from such facts.” 101 F.3d at 1430. For that reason, the court held that while it would
accept the organization’s assertion that it spent additional funds on lobbying in response to the
defendant’s action, it would not accept the plaintiff’s “speculative conclusion that such
expenditures are a necessary link in achieving the organization’s ultimate purpose.” Id. (granting
defendant’s motion to dismiss organization’s suit due to lack of Article III standing); see also
Nat'l Taxpayers Union, 68 F.3d at 1434 (holding that organization’s “self-serving observation
42
that it has expended resources to educate its members and others regarding [challenged statutory
provision] does not present an injury in fact”).
In this case, the Johl declaration asserts that the Bank’s decision “has required CIEL to
put extra time and resources into monitoring Ex-Im Bank’s policies.” Johl Decl. ¶ 9. But she
does not so much as allege that CIEL’s increased monitoring of the Bank’s policies is necessary
to achieve the organization’s ultimate purpose. Cf. Nat’l Treasury Emps. Union, 101 F.3d at
1430. Additionally, like Pacific Environment, CIEL makes no mention of when the asserted
dedication of time and resources occurred despite the fact that roughly two and a half years have
passed since the loan guarantee was approved. Cf. Equal Rights Ctr., 633 F.3d at 1141–42
(holding that at the summary judgment stage, organization’s allegation that it had to divert
resources to counteract the defendant’s action was insufficient when not supported by specific
facts, such as when the organization’s responsive activities took place). Also omitted from the
Johl declaration is any explanation as to how the expenditure of resources on monitoring Bank
policies could be distinguished from the organization’s ordinary program costs in light of her
assertions that CIEL has been a “watchdog[ ]of public financial institutions” for twenty years and
that U.S. energy policies and related decisions “are highly relevant to CIEL’s work.” Johl Decl.
¶¶ 4, 6; see also Conservative Baptist Ass'n of Am., Inc. v. Shinseki, No. 13-cv-1762, 2014 WL
2001045, at *5 (D.D.C. May 16, 2014) (“Any resources that [organization] expended . . . were in
the normal course of [the organization’s] operations, and it cannot convert its ordinary activities
and expenditures . . . into an injury-in-fact.”); Elec. Privacy Info. Ctr. v. U.S. Dep't of Educ., No.
12-cv-0327, 2014 WL 449031, at *16 (D.D.C. Feb. 5, 2014) (“[Plaintiff] cannot convert an
ordinary program cost—advocating for and educating about its interests—into an injury in
fact.”). And finally, although the declaration asserts that the organization had to increase its
43
Bank-monitoring resources “as a result” of the Bank’s alleged injury to the organization’s
objectives, it does not explain how the increased monitoring of Bank policies is intended to or
could “counteract” the Bank’s authorization of the loan guarantee to PNC on behalf of Xcoal.
And in the absence of such facts, CIEL’s decision to increase its monitoring of Bank policies
looks more like a “self-inflicted injury” than an injury attributable to the Bank. See Equal Rights
Ctr., 633 F.3d at 1142 (holding that organization’s expenditures on researching, investigating,
and testing the defendant constituted a self-inflicted injury and not one attributable to the
defendant); Fair Emp’t Council of Greater Wash., Inc. v. BMC Mktg. Corp., 28 F.3d 1268, 1276
(D.C. Cir. 1994) (“[W]e explicitly reject the [plaintiff’s] suggestion that the mere expense of
testing [defendant] constitutes ‘injury in fact’ fairly traceable to [defendant’s] conduct.”); see
also ASPCA, 659 F.3d at 27–28 (finding that organization lacked standing where it provided
extensive information about its advocacy expenditures but failed to show that the defendant’s
actions actually caused the public misimpression that motivated the expenditures in the first
place). In sum, CIEL has failed to show that its assertion of injury to the group’s policy work is
sufficient to pass Havens muster and convey Article III standing.
Turning to Plaintiffs’ second asserted injury, the Court considers the argument that the
Bank’s actions have injured CIEL’s public education efforts. Specifically, Plaintiffs contend that
the Bank’s decision to authorize the $90 million loan guarantee without first preparing an EIS
violated CIEL’s procedural rights 22 and deprived the organization “of opportunities for public
22
Plaintiffs’ motion for summary judgment states that approval of the loan guarantee
without an EIS violated CIEL’s right to information about the environmental impact of the
Bank’s decision and violated its right to participate in the Bank’s decision making process. Pls.’
Mem. Support Mot. Summ. J. at 22. A fair reading of Plaintiffs’ briefs, however, reveals that
Plaintiffs have not argued that the violation of their procedural rights supports a claim of
standing based on informational injury to CIEL. The two citations that Plaintiff provide in
support of CIEL’s asserted injuries both discuss standing based on organizational injury under
44
input and engagement in the decision-making process,” thereby causing “CIEL to expend
additional effort to inform the public about coal financing and its potential effects on the
environment and public health.” Johl Decl. ¶ 10.
A similar claim of organizational injury premised on a procedural violation was recently
rejected by this court in Scenic America, Inc. v. U.S. Dep't of Transp., 983 F. Supp. 2d 170(D.D.C. 2013). In that case, the plaintiff organization’s first claim of injury was premised on the
agency’s failure to follow notice-and-comment procedures, thereby “depriving [plaintiff] of an
opportunity to influence public policy.” Id. at 176. In rejecting plaintiff’s argument, the court
explained that a plaintiff cannot establish organizational standing based solely on “the
deprivation of the right to participate in notice-and-comment rulemaking.” Id. at 177; see also
Int’l Bhd. of Teamsters v. TSA, 429 F.3d 1130, 1135 (D.C. Cir. 2005) (rejecting a claim of
organizational injury premised on an agency’s failure to provide public notice of the agency
Havens and not standing based on informational injury. The failure to cite legal support for a
claim of informational injury is particularly significant here given that the viability of an
informational injury claim in a NEPA case is somewhat uncertain in this Circuit. Compare
Found. on Econ. Trends v. Lying, 943 F.3d 79, 84 (D.C. Cir. 1991) (“[W]e have never sustained
an organization’s standing in a NEPA case solely on the basis of ‘informational injury,’ that is,
damage to the organization’s interest in disseminating the environmental data an impact
statement could be expected to contain.”), with Animal Legal Def. Fund, Inc. v. Espy, 23 F.3d
496, 502 (D.C. Cir. 1994) (“[I]nformational injury is justiciable where the information sought is
‘essential to the injured organization's activities . . . [and] lack of the information will render
those activities infeasible.” (internal quotation marks omitted)). In light of the sophisticated
nature of the parties in this case and the fact that they were ably represented by counsel, the
Court declines to manufacture and analyze an informational injury argument that Plaintiffs chose
not to present or develop. See Armenian Assembly of Am., Inc. v. Cafesjian, 758 F.3d 265, 285
(D.C. Cir. 2014) (holding that “generic and cursory references” in trial court briefs “are a far cry
from properly pressing [the party’s] . . . arguments at the trial-court level” in a manner sufficient
to avoid waiver). Alternatively, to the extent that Plaintiffs wished to assert standing on the basis
of informational injury to CIEL, the Court finds that Plaintiffs have failed to allege specific facts
that would support such a claim. Plaintiffs have not suggested that the information they were
denied is “essential” to CIEL’s activities, that the lack of information will render its activities
infeasible, that the organization regularly uses the type of information in question, or that the
CIEL will be forced to obtain the missing information from other sources. Cf. Friends of
Animals, 626 F. Supp. 2d at 111–12.
45
action in dispute, “thereby depriving [the organization] of the opportunity to comment thereon,”
because the “mere inability to comment effectively or fully, in and of itself, does not establish an
actual injury” (internal quotation marks omitted)). In other words, plaintiffs cannot transform an
agency’s violation of the general public’s right to comment into injury in fact simply by stating
that they, like the rest of the public, were denied the opportunity to comment. See Fla. Audubon,
94 F.3d at 664 (“The mere violation of a procedural requirement . . . does not permit any and all
persons to sue to enforce the requirement.”); Summers v. Earth Island Inst., 555 U.S. 488, 496
(2009) (“[D]eprivation of a procedural right without some concrete interest that is affected by the
deprivation—a procedural right in vacuo —is insufficient to create Article III standing.”).
The only apparent distinction between the claim of injury advanced by CIEL and those
previously rejected in this circuit is the assertion that because CIEL was denied the opportunity
to comment publicly on the loan guarantee, the organization had to “expend additional effort to
inform the public” about the environmental impact of coal financing. Johl Decl. ¶ 10. However,
Ms. Johl makes no mention of when such efforts occurred, whether or not it resulted in a drain
on the organization’s resources, or how its efforts to educate the public about the impacts of coal
financing in an unspecified manner on an unspecified date can be distinguished from the group’s
ordinary programmatic work, which includes “efforts to inform and engage the public in policy-
making processes that may have environmental and public health impacts.” See Johhl Decl. ¶ 5;
see also id. ¶ 7 (explaining that CIEL developed and published information to inform the public
about the environmental costs of coal-related projects in 2011 and 2012). Indeed, the Johl
declaration does not even suggest that whatever efforts CIEL used to educate the public about
the impacts of coal financing can be distinguished in any way – be it costliness or effectiveness –
from the public education efforts that CIEL would ordinarily have expended had the Bank
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solicited public comment on the loan guarantee. As far as the Court is able to ascertain, the
organization’s public education efforts may have been affected by Xcoal’s decision to apply for
the loan guarantee, but Plaintiffs have failed to show that the Bank’s decision played any role in
“perceptibly impairing” CIEL’s public education efforts.
In sum, CIEL has failed to establish organizational injury in fact that was caused by the
Bank’s decision to authorize the $90 million loan guarantee. Without such a showing, CIEL
does not have standing to pursue the instant action.
IV. CONCLUSION
For the foregoing reasons, the Court finds that Plaintiffs lack standing. Accordingly, the
Court denies Plaintiffs’ motion for summary judgment and grants Defendants’ cross-motion for
summary judgment. Additionally, the Court denies as moot Plaintiffs’ motion for the admission
of extra-record evidence, and grants in part and denies in part the parties’ respective motions to
strike as discussed in Part III.B, supra. An order consistent with this Memorandum Opinion is
separately and contemporaneously issued.
Dated: January 21, 2015 RUDOLPH CONTRERAS
United States District Judge
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