COA Challenges DOE’s Proposed Settlement in Energy Efficiency Standards Case

FOR IMMEDIATE RELEASE                                                                                                 CONTACT:        Mary Beth Hutchins, 202-400-2721

FEBRUARY 1, 2013

Jamie Morris, 202-499-2425

Cause of Action Challenges DOE’s Proposed Settlement in Energy Efficiency Standards Case

HARDI moves to substitute in the case that would affect numerous American businesses

WASHINGTON – Cause of Action (CoA), a government accountability organization, recently  filed a Motion to Substitute as Petitioner on behalf of the Heating, Air-conditioning, and Refrigeration Distributors International (HARDI), following the Department of Energy’s proposed settlement with the American Public Gas Association (APGA)  of a court challenge to the agency’s rogue move to impose unreasonable energy efficiency standards on distributors, installers, and users of residential heating and cooling products in the United States.

On May 29, 2012, CoA filed a brief on behalf of HARDI in a lawsuit against the DOE following the agency’s unprecedented move to issue new energy efficiency standards without heeding input from industry members and others in the public. Agency practice typically dictates that even if one adverse public comment is received, the agency will withdraw a proposed direct final rule and use the notice-and-comment process. The DOE ignored more than 30 adverse comments concerning the direct final rule at issue here.

“The proposed settlement between the APGA and the DOE leaves two-thirds of the energy-conservation standards at issue in the lawsuit intact,” said Dan Epstein, executive director of Cause of Action. “If HARDI is not granted permission to substitute as a Petitioner in this case HARDI and other small business members will be denied the opportunity to fight DOE’s abuse of its limited direct final rulemaking authority.”

“HARDI does not believe that the APGA/DOE settlement addresses all of our concerns, therefore we are asking the Court to allow us to substitute in for APGA and continue our concerns as they relate to abuses of the Direct Final Rule Process and central air conditioners,” Jon Melchi, Director of Government Affairs at HARDI, said in a press release from the organization.

The proposed settlement is limited to standards for non-weatherized gas furnaces and fails to address or resolve HARDI’s remaining claims.

Continued Epstein, “Only judicial review can effectively curb DOE’s abuse of the direct final rulemaking process.”

About HARDI:

Heating, Air-conditioning and Refrigeration Distributors International (HARDI) represents more than 460 wholesale companies and 300 manufacturing associates as well as nearly 125 manufacturer representatives. HARDI members represent an estimated 85 percent of the dollar value of the HVACR products sold through distribution.


About Cause of Action:

Cause of Action a nonprofit, nonpartisan government accountability organization that investigates, exposes, and fights job-killing federal government regulations, waste, fraud, and cronyism.  Cause of Action, uses investigative, legal, and communications tools to educate the public on how transparency and accountability protects taxpayer interests and economic opportunity. For more information, visit


For more information or to speak with Dan Epstein, Executive Director of Cause of Action, contactMary Beth Hutchins, or Jamie Morris,, 202-499-4232


COA Responds to Energy Sec. Chu’s Resignation

Cause of Action, a government accountability group currently engaged in two lawsuits against the Department of Energy, issued the following response to Secretary Chu’s resignation announcement today:

Executive Director Dan Epstein:

“Secretary Chu is leaving behind a Department of Energy that has violated the rulemaking process, stolen technology from small businesses and given it to government-backed corporations, and shown political favoritism in awarding loans and loan guarantees. Instead of a reputation of accountability and transparency, Secretary Chu’s reputation has been tarnished by the corruption and cronyism of this Administration.”

For more information on Cause of Action’s work related to the Department of Energy, click here

For further comment, please feel free to contact  202-400-2721.

Daily Caller: Green companies sue Energy Dept. for ‘cronyism,’ leaking confidential business information

Read the full story here. Daily Caller

“The government watchdog group Cause of Action filed two lawsuits against the Department of Energy last week on behalf of two green businesses arguing that the department relied on political connections instead of merit-based reviews to award loan guarantees, and leaked the confidential business information to government-backed competitors.

“This case is about fighting government cronyism,” Dan Epstein, executive director of Cause of Action. “It is a rather fluid story of when you have a start-up company, that’s a small business … looking to get a piece of the American dream. And because the government is involved in the business of picking winners and losers, they fundamentally not only shut down that dream, but destroyed the company.”

Cause of Action is representing the companies XP Vehicles, which applied for a DOE loan to mass produce an SUV-style electronic vehicle that would start at less than $20,000, and Limnia, an advanced technology energy systems company that made critical technology for XPV….”

Dan Epstein on WDEL: “This case is about Cronyism plain and simple”

Executive Director Dan Epstein describing our clients XP Vehicles and Limnia, and their case against the crony Department of Energy.


Dan Epstein on XP/Limnia Case (Recorded on WDEL 1/15/2013) Electric car designers suing DOE over loan denials, intellectual property disclosure

Read the full story here. Fox News

“XP Vehicles and Limnia attempted to file a similar lawsuit in Federal Court of Claims in November, but it was rejected because they did not have legal representation at the time. Now, the companies have teamed up with Cause of Action, a self-proclaimed nonpartisan government watchdog group often linked to conservative issues.

Cause of Action Executive Director Dan Epstein said his organization became involved in an effort to expose what his clients allege is rampant cronyism in the loan approval process for the Energy Department’s $25 billion Advanced Technology Vehicle Manufacturing (ATVM) program, which was created to support the development of fuel efficient automobiles.
To this end, the would-be automakers designed a radical, lightweight, energy-efficient vehicle that uses bodywork constructed from a foam-filled, flexible material instead of metal, and runs on electricity provided by a system of exchangeable battery cartridges or hydrogen fuel cells…

“While the Department does not comment on pending or potential litigation, multiple investigations spanning almost two years and involving millions of pages of documents show that decisions made on the Department’s loan program were made solely on the merits after careful review by the Departments technical experts,” said Energy Department Spokesperson Damien LaVera in a statement to

Epstein says his goal is not just getting compensation for his client, but also laws on the books to put a check on the governments “unbridled authority in picking of winners and losers.” Along with the issues surrounding the rejected loans, the lawsuits also claim that the Energy Department, through its Sandia National Laboratories, shared Limnia’s secret designs for a hydrogen-fueled power system with both Ford and General Motors, then encouraged the company to seek a partnership with GM so that there would “there was no acrimony…”



Bloomberg: Car Companies XP Vehicles, Limnia Sue U.S. Over Loans

Car Companies XP Vehicles, Limnia Sue U.S. Over Loans


By Tom Schoenberg on January 10, 2013
President Barack Obama’s administration played favorites on clean-energy loans while improperly blocking a carmaker and a related technology company from receiving millions in aid, according to two lawsuits.

XP Vehicles Inc. and Limnia Inc. filed complaints against the U.S. and the Energy Department today in two federal courts in Washington, seeking damages for what they say were abuses of the $25 billion Advanced Technology Vehicle Manufacturing loan program. XP Vehicles, which has dissolved, and Limnia are asking for $450 million in a case filed in the U.S. Court of Federal Claims and at least $225 million in U.S. District Court.

“Defendants used the ATVM loan program as nothing more than a veil to steer hundreds of millions of taxpayer dollars to government cronies,” according to the district court complaint.

Today’s lawsuits are the latest challenge to clean-energy loan programs administered by the Energy Department, which has come under scrutiny over a $535 million loan guarantee to now- bankrupt solar-panel maker Solyndra LLC.

“While the department does not comment on pending or potential litigation, multiple investigations spanning almost two years and involving millions of pages of documents show that decisions made on the department’s loan program were made solely on the merits after careful review by the department’s technical experts,” Damien Lavera, an Energy Department spokesman, said in an e-mail.

Koch Foundation
The companies are being represented by Daniel Epstein, executive director for a Washington-based nonprofit advocacy group. He previously worked for a foundation started by Koch Industries Inc. Chief Executive Officer Charles Koch, a billionaire contributor to Republican-leaning causes. He was also counsel for Republican U.S. Representative Darrell Issa’s House Oversight and Government Reform Committee, which is leading a probe of the department’s loan programs.

XP Vehicles, or XPV, said it applied in 2008 for a $40 million loan in an effort to mass produce an SUV-style electronic vehicle with doors and other parts made from foam. The starting price for the vehicle was to be less than $20,000.

The carmaker said it believed the review of its application would take “a matter of weeks.” After meeting with the agency in May 2009, XPV said it discovered that two of its competitors — Tesla Motors Inc. (TSLA) and Fisker Automotive Inc. — were receiving special assistance from agency staff with the loan application process.

Obama Contributor
One member of Tesla’s board at the time was Steven Westly, a campaign contributions bundler for Obama, while Fisker’s investors included Obama donors, according to the complaint.

Tesla received a $465 million loan in June 2009 with an interest rate of 1.6 percent, according to the complaint. XPV called one of Tesla’s products “an expensive electric car targeted at rich actors, journalists and businessmen, not average Americans.”

Fisker received a $528.7 million loan. The department in May 2011 blocked Fisker from receiving the bulk of the loan, after the company didn’t meet milestones for producing its first model.

Jeff Evanson, a spokesman for Palo Alto, California-based Tesla, and Roger Ormisher, a spokesman for Anaheim, California- based Fisker, didn’t immediately respond to e-mail messages seeking comment on the lawsuits.

XPV’s application was denied in August 2009. The reasons given by the agency involved vehicle specifications as well as manufacturing and sales plans, according to the complaint.

Limnia is also challenging applications for loans it sought that were denied.

The Energy Department has made five loans under the advanced-vehicles program — none since the 2011 bankruptcy of Solyndra — and $16 billion remains undistributed.

The court of federal claims case is XP Vehicles Inc. v. U.S. Department of Energy, 12-cv-00774, U.S. Court of Federal Claims (Washington). The district court case is XP Vehicles Inc. v. U.S. Department of Energy, 13-cv-00037, U.S. District Court, District of Columbia (Washington).

XP Technology Retains Cause of Action in DOE Cronyism Suit

FOR IMMEDIATE RELEASE                                                                                                CONTACT:

NOVEMBER 23, 2012                                                                        Mary Beth Hutchins or Briton Bennett





WASHINGTON – Cause of Action, a government accountability organization, now represents San Francisco-based XP Technology in its November 14, 2012 lawsuit against the federal government concerning the U.S. Department of Energy’s denial of XP Technology’s loan guarantee application under the Advanced Technology Vehicles Manufacturing (AVTM) loan program.


XP Technology’s complaint, filed in the U.S. Court of Federal Claims, alleges that “corruption and negligence” pervaded DOE’s decision to award loan guarantees to Ford, Nissan, Tesla Motors, and Fisker Automotive for the development of electric vehicle technology.
“The Department of Energy has acted in an arbitrary and capricious manner at the expense of American small businesses that have sought to reduce our country’s dependence on foreign oil,” asserted Scott Douglas Redmond, XP’s lead investor.


About XP Technology:
In development for nearly a dozen years, with millions of dollars in resources already invested, XP Technology., is on a mission is to develop the safest, most affordable vehicle with the lowest total cost of operation (TCO) and the best power-to-weight ratio powered by alternative energy. The battery pack is capable of dramatically exceeding the range of any shipping electric vehicle with four passengers. However, it could reach 300 miles with the continuous and hot-swappable charge of an optional XP Auxiliary Power Unit.  For more information on XP Vehicles, please visit


About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit


All legal inquiries should be directed to Cause of Action’s Executive Director, Dan Epstein, at 202-400-2720. Media inquiries should be brought to the attention of Mary Beth Hutchins, or Briton Bennett,