Plant Oil Powered Diesel Fuel Systems, Inc. v. ExxonMobil Corp.

778 F. Supp. 2d 1180, 41 Envtl. L. Rep. (Envtl. Law Inst.) 20155, 2011 U.S. Dist. LEXIS 44014, 2011 WL 1516620
CourtDistrict Court, D. New Mexico
DecidedApril 18, 2011
DocketCIV 11-0103 JB/WPL
StatusPublished
Cited by1 cases

This text of 778 F. Supp. 2d 1180 (Plant Oil Powered Diesel Fuel Systems, Inc. v. ExxonMobil Corp.) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Plant Oil Powered Diesel Fuel Systems, Inc. v. ExxonMobil Corp., 778 F. Supp. 2d 1180, 41 Envtl. L. Rep. (Envtl. Law Inst.) 20155, 2011 U.S. Dist. LEXIS 44014, 2011 WL 1516620 (D.N.M. 2011).

Opinion

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Plaintiffs Motion and Application for Temporary Restraining Order and Order to Show Cause, filed February 1, 2011 (Doc. 5)(“Motion”). The Court held a hearing on March 1, 2011. The primary *1182 issue is whether the Court should preliminarily enjoin the Defendants from taking any further action during the pendency of this action, in the absence of prior approval from this Court, with regard to (a) draft Standard Specification for Triglyceride Burner Fuel for use of triglyceride diesel fuel in larger-sized commercial and industrial burners, number WK 21463; (b) ASTM International f/k/a American Society for Testing and Materials (“ASTM”) Work Item 30622; (c) ASTM Work Item 3008; and (d) ASTM Work Item WK27610. Because Plaintiff Plant Oil Powered Diesel Fuel Systems, Inc. (“POP Diesel”) has not shown imminent harm would result if the Court does not issue a preliminary injunction, the Court denies its Motion without prejudice to POP Diesel renewing the Motion if the case is not proceeding at an adequate pace to allow the Court to decide the merits before ASTM adopts the Draft ASTM Triglyceride Standard.

FACTUAL BACKGROUND

POP Diesel develops, manufactures, and sells triglyceride diesel fuel — fuel consisting of vegetable oil and animal fat — -and related equipment that permits and manages the use of triglyceride diesel fuel in residential, commercial, and industrial burners and in diesel engines. See Verified Complaint ¶ 4, at 3, filed February 1, 2011 (Doc. l)(“Complaint”). POP Diesel also owns and operates a state-licensed triglyceride diesel fuel processing and filling station in New Mexico, which it opened as the first such station in the United States in 2006. See Complaint ¶ 4, at 3. The cities of Albuquerque, Las Cruces, and Santa Fe and the town of Taos have all pledged to assist POP Diesel in establishing the first state-wide network of triglyceride fuel filling stations in the country. See Complaint ¶ 5, at 3. POP Diesel’s feedstock for making triglyceride diesel fuel at this time consists primarily of waste vegetable oils and greases obtained from restaurants and industrial and agricultural operations, of which there is a virtually unlimited supply. See Complaint ¶ 6, at 3. Defendants ExxonMobil Corporation (“ExxonMobil”); Royal Dutch Shell, PLC (“Shell”); BP, PLC (“BP”); Chevron Corporation (“Chevron”); and ConocoPhillips Company (“ConocoPhillips”) (collectively “the Defendant Oil Companies”), are the world’s largest producers and sellers of petroleum-based diesel fuel, which competes with triglyceride diesel fuel, but which POP Diesel alleges is inferior to triglyceride diesel fuel for use in burners and diesel engines, for reasons of cost, performance, product safety, and environmental impact. Complaint ¶¶ 7-17, at 3-5.

Each of the Defendant Oil Companies is a member of ASTM, one of the largest standard-setting organizations in the world. See Complaint ¶¶ 7-17, at 3-5. ASTM promulgates quality standards for many products, including fuel oils, which have been adopted by reference in federal and state statutes throughout the United States, including New Mexico. See Complaint ¶¶ 19-21, at 5-6. ASTM’s “membership is composed of three categories: producers, consumers, and general interest (academic, etc.) ... [and] [i]ts specifications are written by technically qualified committees composed of members from the three categories.” Application of Am. Soc’y for Testing & Materials, 231 F.Supp. 686, 688 (E.D.Pa.1964).

This case involves ASTM’s promulgation, with the Defendant Oil Companies’ alleged involvement, of a proposed new standard and guidelines for biofuels that would limit, if not bar, the use of triglyceride diesel fuel and related products, including those of POP Diesel. Plaintiffs Memorandum of Law in Support of Motion for Temporary Restraining Order/Preliminary Injunction, filed February 1, 2011 (Doc. 6)(“Memorandum”).

*1183 1. The Relevant Markets.

The relevant product and geographic markets for purposes of this action are: (i) the diesel fuel market for residential, commercial, and industrial burners in the United States, and (ii) the diesel fuel market for diesel engines in the United States (“the Relevant Markets”). Complaint ¶ 22, at 6. POP Diesel competes in the Relevant Markets against the Defendant Oil Companies, as well as against other producers and sellers of diesel fuel. See Complaint ¶ 25, at 7.

2. The Draft ASTM Triglyceride Standard.

ASTM’s largest committee, titled D02, Petroleum Products and Lubricants (“Committee D02”), of which the Defendant Oil Companies are members, promulgates standards, specifications, classifications, test methods, and guidelines for liquid fuels in the diesel fuel industry. Complaint ¶ 21, at 6. To date, Committee D02 has approved for mixing with petroleum-based diesel fuel a non-petroleum blend stock, commonly known as “biodiesel,” that meets ASTM Standard Specifications D396 and D975. Complaint ¶34, at 8-9. ASTM Standard Specifications D396, D975, and D6751 approve up to five percent biodiesel blended with petroleum-based diesel fuel for use in burners and diesel engines. See Complaint ¶ 34, at 8-9.

POP Diesel alleges that, because of the five-percent cap, biodiesel represents only an incremental step in reducing net greenhouse gas emissions as compared with the near one-hundred percent use of triglyceride diesel fuel POP Diesel’s equipment permits. See Complaint ¶ 36, at 9. The Defendant Oil Companies do not oppose biodiesel, which poses no threat to petroleum-based diesel fuel because of the five-percent cap. See Complaint ¶ 36, at 9. POP Diesel contends that supporting the five-percent cap on biodiesel in ASTM Standard Specifications D396 and D975 allows the Defendant Oil Companies to portray themselves as favoring renewable energy. See Complaint ¶ 36, at 9. Without federal tax incentives, which expired at the end of 2009, the manufacture of biodiesel is largely not cost-effective or economically or commercially feasible, and many biodiesel facilities today are sitting idle. See Complaint ¶ 37, at 9.

Several years ago, burner manufacturers seeking insurance coverage for the use of triglyceride diesel fuel asked ASTM Committee D02 to develop a standard for triglyceride diesel fuel to be used in burners. See Complaint ¶ 38, at 10. Underwriters Laboratories, an insurance actuarial firm, would not rate burners using triglyceride diesel fuel, and some insurers therefore would not offer coverage, unless and until ASTM first adopted a standard specification for triglyceride diesel fuel for burners. See Complaint ¶ 38, at 10. Various subcommittees of Committee D02, which POP Diesel contends the petroleum-based diesel fuel interests dominate, refused to adopt a specification for triglyceride diesel fuel burners. See Complaint ¶ 39, at 10. The request was referred to Committee D02’s Subcommittee P, Recycled Petroleum Products (the “Subcommittee”). Complaint ¶ 40, at 10.

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778 F. Supp. 2d 1180, 41 Envtl. L. Rep. (Envtl. Law Inst.) 20155, 2011 U.S. Dist. LEXIS 44014, 2011 WL 1516620, Counsel Stack Legal Research, https://law.counselstack.com/opinion/plant-oil-powered-diesel-fuel-systems-inc-v-exxonmobil-corp-nmd-2011.