Petro-Diamond Inc. v. SCB & Associates, LLC

MEMORANDUM OF DECISION

I

In an effort to reduce carbon monoxide and greenhouse gas emissions, as well as the nation’s reliance on foreign petroleum-based fuels, Congress enacted legislation in 2005 mandating the increased use of renewable fuels in the transportation sector. Rather than requiring obligated parties to directly generate their requisite quota of renewable fuel, Congress further devised a credit program whereby parties could buy, sell, and trade “credits” representing a specified batch of renewable fuel on a secondary market. The idea behind the program was to provide flexibility: to obligated parties-and to allow the Environmental Protection Agency (“EPA”), which was tasked with promulgating the implementing rules and regulations, to easily track the country’s collective volume of renewable fuel Despite Congress’s good intentions, the resulting credit-based renewable fuels market proved to be volatile and highly speculative. It is against this backdrop that the present case arose. Petro-Diamond Incorporated (“Petro-Dia-mond”) brings this action against its former commodities broker, SCB & Associates, LLC (“SCB”), after SCB brokered several of Petro-Diamond’s trade…