Greens Can’t Sue ExIm Bank for Coal Loan

(CN) - The U.S. Export-Import Bank need not face claims that a $90 million loan guarantee to a coal company will damage the environment and threaten public health, a federal judge ruled Wednesday.

Chesapeake Climate Action Network, the Center for International Environmental Law and four other environmental groups sued in July 2013 , claiming that the bank and its Chairman Fred P. Hochbert authorized a 3-year, $100 million loan to Xcoal Energy & Resources from PNC Bank without conducting environmental analysis required under the National Environmental Policy Act.

The loan enabled Xcoal to mine $1 billion worth of coal from mines in Appalachia, transport it by rail to ports in Baltimore and Hampton Roads, Va., and sell it to overseas customers.

The plaintiffs claimed that the loan deal would pollute the air and water with toxic coal dust, aggravating respiratory conditions such as bronchitis and asthma, and that toxic metals in coal dust from the mines would increase people's risk of cancer and kidney damage.

They also claimed that small dust particles contribute to haze, alter the nutrient balance in water bodies, and diminish ecological diversity.

In response, ExIm Bank claimed the plaintiffs lacked standing and that it was not necessary to conduct a NEPA-compliant environmental study for a loan guarantee.

On Wednesday, District of Columbia Federal Judge Rudolph Contreras agreed with the ExIm Bank, and found that the plaintiffs lacked standing to challenge the loan guarantee.

To establish standing in cases alleging violation of procedural rights, such as NEPA lawsuits, the plaintiff must demonstrate a specific rather than general interest in the matter, show that the government's failure to conform to the procedure at issue will harm the plaintiff's interests, that the government's failure to act is the cause of the plaintiff's alleged injuries, and that the court can provide actual rather than speculative relief, the ruling states.

The defendants acknowledged that members of the four environmental groups suing on behalf of their members would likely be harmed by pollution from coal exportation, but argued that the groups lacked standing because they did not prove that the loan would cause Xcoal to export more coal or that vacating the guarantee would force Xcoal to export less coal.

In rebuttal, the groups asserted that ExIm's loan enabled Xcoal to export more coal than it could without the guarantee, and that canceling the guarantee until the bank completes NEPA analysis would force Xcoal to decrease coal exports and thus reduce pollution.

Contreras was not persuaded. He found that the administrative record and declarations from the parties demonstrate no link between ExIm Bank's authorization of the loan guarantee and the amount of Xcoal's coal exports.

Though the groups' members believed NEPA compliance could better protect them from the effects of coal pollution, their "hopes or beliefs than an order rescinding the guarantee would redress their injuries, however genuine, do not constitute 'specific facts' showing redressability," Contreras wrote.

In contrast, the defendants supported their position with specific facts, such as Xcoal's using other lines of credit to boost its coal exports, to prove that rescinding the guarantee will accomplish little to protect the plaintiffs' members from pollution, the ruling states.

"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," Contreras wrote.

Since the four groups cannot refute the defendants' assertions that the European banking crises is easing up and that Xcoal is using only 30 percent of its available $535 million in credit, they lack standing for failure to establish redressabillity, Contreras added.

The Center for International Environmental Law's and Pacific Environment's claims for organizational standing based on suffering "injuries to their organizations' missions, activities, and resources" due to ExIm's guarantee also failed to impress the court because neither could not show that they suffered actual harm.

Both groups contended that the guarantee interferes with their express missions to protect the environment, and forced them to expend resources on environmental advocacy and public education, but neither could back up those claims with specific facts or explain how allocating additional funds for advocacy differed from their typical program activities and costs, according to the ruling.

An action that merely frustrates an organization's goals is not enough to prove actual injury, and without proof of such injury, the plaintiffs thus lack standing, Contreras wrote.

The court granted the defendants' motion for summary judgment and denied as moot the plaintiffs' motion to include extra-record evidence.

The plaintiffs were Chesapeake Climate Action Network, the Center for International Environmental Law, Friends of the Earth, the Sierra Club, the West Virginia Highlands Conservancy, and Pacific Environment.

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