Citizen Suits
Sierra Club v. Public Service Co. of Colorado, 894 F. Supp. 1455 (D. Colo. 1995)
In this citizen suit brought by the Sierra Club, a district judge ruled that violations of a
standard contained within a state implementation plan (SIP) may be established by reliance on
data from continuous emissions monitoring (CEM) even though the SIP expressly provides that
compliance is to be determined by conduct of a different monitoring method.
The case involved alleged violations of a 20% opacity standard in the Colorado SIP by a
fossil fuel-fired steam generating plant. Based on publicly available data from a CEM system at
the plant, the Sierra Club argued that the plant had violated the standard over 19,000 times
during a five-year period. However, the utility countered by pointing out that the SIP specifies a
different means by which compliance is to be determined and that therefore the CEM data could
not be relied upon to establish violations. The SIP provides that compliance is to be determined
by visual inspections conducted under specified criteria by a qualified observer. Although the
SIP requires installation of CEM devices, CEM data are to be used only for pollutant tracking
purposes and are not to be used to establish violations.
The district judge denied the utility's motion to dismiss the Sierra Club's claims. The
Court concluded that the CEM data have a "high degree of probative reliability" and therefore
should be considered evidence of opacity violations. The Court reasoned that section 114 of the
Act is intended, among other things, to ensure citizen access to information necessary to prove
violations of the Act. Because citizens will not have access to the results of visual observations
conducted pursuant to the prescribed method, the Court concluded that Congress intended for
citizens to be able to rely upon publicly available data to establish violations. In addition, the
Court cited the language and legislative history of section 113(e) as providing support for its
position. That provision states that, in determining the amount of a civil penalty, a court is to
consider, among other things, "the duration of the violation as established by any credible
evidence (including evidence other than the applicable test method)." But the legislative history
makes clear that a reference test method violation must be demonstrated before such other
evidence can be used in assessing the penalty.
One concern caused by the opinion was that, if CEM data are considered relevant in
establishing violations regardless of the test method provided by the SIP, companies will be
found to have violated standards where they did not believe compliance problems existed.
Moreover, environmental groups may gain leverage to exact large penalties from companies as a
result of this change in how compliance is determined. Finally, it is possible that the decision
might play a role in the ongoing debate concerning whether data generated under EPA's future
Compliance Assurance Monitoring ("CAM") Rule may be presented as "credible evidence" of
violations.
This case was settled the following year. The settlement obligated PSC to expend more
than $140 million and was said by EPA at the time to be the second largest Clean Air Act
settlement in history. See the May 1996 Washington Report at WR-65.
Adair v. Troy State Univ. of Montgomery, 892 F. Supp. 1401 (M.D. Ala. 1995)
In this citizen suit, the court held that parties alleging violations of section 112(i)(3)(A) of
the Clean Air Act could bring suit immediately after providing notice and could base their claim
on wholly past violations. The case involved workers at Troy State University who alleged that
they were exposed to asbestos during a renovation project at the school. The defendant moved
to dismiss on the grounds that it had not been provided sufficient notice and that there were no
ongoing violations.
Section 304(b) of the Act provides that a plaintiff must give a defendant sixty days notice
before filing a citizen suit. However, the plaintiffs argued and the court agreed that there is a
specific exception to this advance notice requirement for suits alleging violations of a NESHAP
under section 112(i)(3)(A). Here, because the suit was based on an alleged violation of the
asbestos NESHAP, the court found that the sixty-day notice requirement did not apply and that
the suit had been properly filed after notice was given.
The defendant also stated that the allegedly improper asbestos removal had ceased prior
to the filing of the suit. Therefore, the University contended, the suit was improperly based on
wholly past violations under the principles enunciated in Gwaltney of Smithfield, Ltd. v.
Chesapeake Bay Found., 484 U.S. 49, 57 (1987). That case held that citizen suits brought under
the Clean Water Act could not be based on violations that were not ongoing at the time of filing
of the citizen suit. However, the court ruled that the Gwaltney decision had been partially
overturned by the 1990 Amendments and that citizen suits which alleged wholly past violations
are now permitted under the Act. Thus, the court denied the defendant's motion to dismiss. (But
see Satterfield v. J.M. Huber Corp., 888 F. Supp. 1561 (N.D. Ga. 1994) (stating that "courts will
not allow citizens to file suits based on violations that have been corrected").)
Glazer v. American Ecology Envtl. Servs. Corp., 894 F. Supp. 1029 (E.D. Tex. 1995)
The court in this citizen suit analyzed a number of requirements under the Clean Air Act
including the bar to claims which are being diligently prosecuted by the government, the Act's
notice requirements, the validity of allegations based on wholly past violations, the enforceability
of state standards, and the statute of limitations which applied to the Act. The complaint in the
case alleged numerous violations of the Clean Air Act, including violations of the Texas SIP, an
NSPS, and a NESHAP. Defendant moved to dismiss the complaint on a number of different
grounds.
First, the court addressed the defendant's argument that plaintiff's claims were precluded
by a diligent state prosecution of "identical claims." The court held that although some of the
claims appeared to be identical to claims alleged in a state enforcement action, there were some
standards, limitations, or orders in this suit which were different from those in the state's case,
and those claims were not barred. As to the claims that were identical, the court held that there
had not been sufficient evidence presented on the issue of diligent prosecution and withheld
judgment on that issue.
The court resolved, however, a number of issues. The Court held that the sixty-day
notice requirement in the act applies to each claim and that defects in the timing of notice are not
cured by filing an amended complaint containing the same allegations. The court also held that
the Clean Air Act Amendments of 1990 permitted citizen suits for wholly past violations. (But
see Satterfield v. J.M. Huber Corp., 888 F. Supp. 1561 (N.D. Ga. 1994) (stating that "courts will
not allow citizens to file suits based on violations that have been corrected").) Further, the court
held that only those state standards which are part of a SIP are enforceable in a citizen suit.
Finally, the court held that the general five-year statute of limitations in federal law applies to
citizen suits brought under the Clean Air Act.
Fried v. Sungard Recovery Servs., Inc., 900 F. Supp. 758 (E.D. Pa. 1995)
In this citizen suit alleging violations of the asbestos NESHAP, the court held that the
notice requirements of section 304(b) were satisfied. The defendant moved to dismiss five of the
eight counts in the complaint, arguing that the plaintiffs had not complied with the notice
requirements of the Act for such suits. The court held that both the content and timing
requirements for notice had been met and denied that part of the motion to dismiss which was
based on the failure to provide adequate notice.
This suit was brought by workers at a renovation project against the renovators in
connection with alleged exposure to asbestos at the project. The defendant first contended that
the content of the notice which plaintiff provided to defendant was insufficient. Interpreting
EPA's regulations that implement the notice requirement, the court found, however, that the
content of the notice in this case was adequate. The court held that in order for there to be proper
notice, the recipient of such a notice must be able to identify: (1) the specific standard, limitation
or order alleged to have been violated; (2) the activity which is alleged to have been in violation;
(3) the persons responsible; (4) the location of the violation; (5) the general time frame of the
incident; and (6) name and address of the person giving notice. The court found that each of
these requirements was satisfied in this case.
The defendant also argued that plaintiffs had not provided notice sixty days prior to filing
the suit as required by the Act. However, the court found that this case fit into an exception to
the sixty-day requirement for cases alleging a violation of section 112(i)(3)(A), which requires
compliance with standards and regulations promulgated under section 112. Based on its analysis
of the statutory language, the court held that this exception was not limited to cases involving
imminent hazard, as contended by the defendants. Therefore, according to the court, this action
could be brought immediately after notice was served on the defendant.
Ogden Projects, Inc. v. New Morgan Landfill Co., 911 F. Supp. 863 (E.D. Pa.1996)
In the first significant judicial decision to apply the D.C. Circuit's rulings overturning
EPA's "potential to emit" (PTE) definitions, a federal district court in Pennsylvania concluded
that a landfill operator was not required to obtain a new source review (NSR) permit. The district
court's ruling rescinded its earlier decision holding that the company was required to obtain an
NSR permit. (See the November 1995 Washington Report, which discussed the earlier decision
at WR- 43-44.) The January 10, 1996 decision addresses several issues concerning how a
source's PTE should be calculated for purposes of the NSR program.
The case is a citizen suit brought under section 304(a)(3) of the Act by Ogden against a
competing municipal solid waste landfill operated by New Morgan. Ogden argued that New
Morgan should have obtained a Part D preconstruction permit because its potential to emit
volatile organic compounds (VOCs) exceeded the threshold level for major sources of VOCs in
the nonattainment area in question. In response, New Morgan maintained, among other things,
that it is not a major source because its gas management system limited VOC emissions to a
fraction of the threshold level.
The district court ruled in September 1995 that the system was a "physical limitation" on
the capacity to emit pollutants which could limit the facility's PTE only if it were "federally
enforceable" under EPA's PTE definition for the NSR program. Since New Morgan could not
establish that use of the system was federally enforceable, the court ruled that the New Morgan
facility was a major source and must obtain an NSR permit.
However, New Morgan subsequently moved for reconsideration of the court's decision
and argued that it should be rescinded. New Morgan contended that the court must reconsider
because shortly before it issued the decision, the D.C. Circuit had vacated EPA's PTE definition
for the NSR program in Chemical Manufacturers Ass'n v. EPA, 70 F.3d 637 (D.C. Cir. 1995).
In its January 10 decision, the court agreed with New Morgan, rescinded its prior opinion,
and issued a new decision holding that New Morgan had not violated the Act.
In reaching its conclusion, the court first confirmed that the effect of the CMA decision
was to void the federal enforceability requirement in EPA's NSR regulations. It then rejected
Ogden's request that it stay proceedings in the case until EPA formulates a new PTE definition.
The court also rejected Ogden's attempt to rely on the nearly identical PTE definition
contained in the Pennsylvania SIP. According to the court, because the suit was brought under
section 304(a)(3), which deals with the Act's requirement to obtain a Part D permit, Ogden could
not rely on the separate federal enforceability requirement in the state's PTE definition contained
in its SIP.
Because the CMA decision was expressly based on National Mining Ass'n v. EPA, 59 F.3d
1351 (D.C. Cir. 1995), the court looked to the NMA decision as providing the general framework
for analyzing what controls can be considered for limiting a source's PTE. The district court
explained that NMA held that, "in assessing a source's potential to emit, 'effective' controls
should
be taken into account even if they are not federally enforceable." However, the district court also
stated at another point that the D.C. Circuit had intended that controls be "unquestionably" and
"demonstrably" effective in order to be taken into account.
For the most part, the court's January 10 decision accurately describes the D.C. Circuit
decisions and contains rulings favorable to industry. However, the court's characterization of
NMA as requiring that controls be "unquestionably" or "demonstrably" effective to be taken into
account is a misreading of the NMA decision. In its opinion, the D.C. Circuit described EPA's
approach as failing "to credit controls imposed by a state or locality even if they are
unquestionably effective." The D.C. Circuit did not say that, to be considered, controls must be
"unquestionably effective," but instead characterized EPA's definition as so deficient that it
ignored certain state and local controls where effectiveness was not even an issue. Moreover, the
court's language noted above appears to be at odds with other parts of its opinion, which state
that controls need only be "effective."
Fried v. Sungard Recovery Servs., Inc., 916 F. Supp. 465 (E.D. Pa. 1996)
In this case, the federal district judge held that citizen suits alleging "wholly past
violations" were permissible under the Clean Air Act. This case involved a citizen suit brought
against contractors alleging violations of the asbestos NESHAP. The judge denied defendants'
contention that there could be no recovery for wholly past violations. The court held that the
1990 Amendments permitted citizen suits for "wholly past violations, so long as the violation
was repeated."
The court acknowledged that until the 1990 amendments, only violations continuing at
the time a citizen suit was filed were permitted. Suits for wholly past violations were barred by
the Supreme Court's holding in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., 484
U.S. 49, 57 (1987), which barred such suits under similar provisions of the Clean Water Act.
However, the district judge concluded that the 1990 Amendments overruled Gwaltney with
respect to wholly past violations. The amendments added language permitting suits against any
person "alleged to have violated (if there is evidence that the alleged violation has been repeated)
or to be in violation" of an emission standard, emission limitation, or relevant order.
Accordingly, the court found that as long as a violation was repeated, even wholly past violations
could serve as the basis for a citizen suit under the Clean Air Act. (But see Satterfield v. J.M.
Huber Corp., 888 F. Supp. 1561 (N.D. Ga. 1994) (stating that "courts will not allow citizens to
file suits based on violations that have been corrected").)
The defendant also argued that the section 304 amendment did not apply to violations
occurring prior to the effective date of the amendments, which was two years after enactment.
In response, the court held that as long as the action was filed after the effective date of the
amendments, plaintiffs could bring a citizen suit based on wholly past violations which occurred
prior to their enactment.
Sierra Club v. Tri-State Generation and Transmission Ass'n, 173 F.R.D. 275 (D. Colo. 1997)
In this case, a federal district judge in Colorado rejected arguments that a Clean Air Act
citizen suit brought by the Sierra Club should be dismissed on various grounds. Although the
judge's ruling dealt only with preliminary motions filed by the defendants and did not address the
merits of the case, the decision may signal the willingness of federal district courts to find
jurisdiction for future citizen suits under the Act against industrial sources.
The case arose when the Sierra Club filed a complaint alleging that the Craig Station
a coal-fired, electric utility plant in Colorado had violated, and continued to violate, the Act
and the Colorado state implementation plan by failing to comply with a 20% opacity standard, an
SO2 emission standard, the requirement to operate air pollution control equipment in a manner
consistent with good air pollution control practices, and the requirement to monitor emissions
continuously. These allegations are similar in many respects to the allegations made by the
Sierra Club in a previous citizen suit involving a electric utility plant in Hayden, Colorado. In
that case, a different district judge ruled that the Hayden facility was liable for violations proven
by use of continuous opacity monitoring data rather than by the approved reference test method.
Sierra Club v. Public Service Co. of Colorado, 894 F.Supp. 1455 (D. Colo. 1995). The earlier
case resulted in a settlement in which the facility agreed to expend more than $140 million on
various activities. See the September 1995 Washington Report at WR-33.
In this case, the defendants moved to dismiss the Sierra Club's claims on the following
grounds: (1) the Sierra Club lacked standing to maintain the action; (2) the Sierra Club failed to
satisfy statutory notice requirements before it brought suit; and (3) under the doctrine of "primary
jurisdiction," the federal court should not rule on the claims because a state agency was in the
process of modifying the opacity and SO2 limits involved in the case.
In his written opinion, the judge denied each request made by the defendants. First, the
judge denied the request that the case be dismissed because the Sierra Club allegedly lacked
standing to bring suit. The judge ruled as a preliminary matter that the Sierra Club, on behalf of
members living in the surrounding Yampa Valley, had sufficiently satisfied the constitutional
standing requirements of injury-in-fact, causation, and redressability.
In addressing the notice issue, the judge recognized that section 304 of the Act and EPA's
implementing regulations provide that no citizen suit to enforce the Act or a standard under the
Act can be brought until 60 days after proper notice has been given to EPA, the state involved,
and the alleged violator. Although the Sierra Club contended that it had sent a letter in 1993
satisfying the notice requirements, defendants argued that the Sierra Club had failed to attach it
to the complaint, that the notice had not been sent to EPA and the state by certified mail as
required, and that the letter had not provided sufficient specificity regarding the standards
allegedly violated and the dates involved. In addressing defendants' arguments, the court ruled
that there is no requirement that the notice be attached to the complaint, that the evidence
showed that certified mail had been sent to EPA and the state at essentially the same time as the
letter was sent to the defendants, and that neither the statute nor regulations require detailed
allegations in the notice letter so long as there is sufficient information to enable the recipients to
determine what standards are in question.
The judge further ruled, based mainly on cases arising under the Clean Water Act, that
the doctrine of primary jurisdiction does not apply to citizen suits brought under the
environmental statutes. He also stated that, in any event, the facts presented did not warrant
invocation of the doctrine because he could determine whether violations of the standards had
occurred without resolving issues within the special expertise of the state agency.
U.S. Public Interest Research Group, et al. v. Bayou Steel Corp., Civ. No. 96-0432 (E.D. La.
Sept. 16, 1997)
In this Clean Air Act citizen suit, a federal district court judge in Louisiana rejected a series
of arguments made in an attempt to have the case dismissed. The judge's opinion illustrates
some of the obstacles a company may face in seeking to persuade a court to dismiss a citizen suit
complaint in the early stages of a case. The case also provides another example of efforts by
environmental groups to recover substantial civil penalties against sources for alleged violations
of opacity standards and continuous monitoring requirements. The judge did not address the
merits of the plaintiffs' claims but did rule that the plaintiffs' allegations of harm from violations
at the company's facility were sufficient to allow the case to proceed.
The case was brought by a national citizen advocacy group (U.S. Public Interest Research
Group), a local citizen group interested in environmental justice issues, and two individual
citizens. Their complaint alleged that from April 1992 to the present time the company's facility
in LaPlace, Louisiana violated numerous emissions standards and related requirements. The
alleged violations involved requirements to comply with a three percent opacity standard, to
maintain and operate a continuous opacity monitoring system, to continuously operate
continuous emission monitors, to maintain and operate the facility in accordance with "good air
pollution control practices," and to submit excess emission reports to the state agency. The
plaintiffs sought injunctive and declaratory relief in addition to civil penalties.
In its motions to dismiss the complaint, the company argued, among other things, that
the plaintiffs lacked standing to bring the action under Article III of the Constitution. The
company maintained that, despite plaintiffs' allegations that numerous violations had occurred at
the facility, the plaintiffs had not adequately alleged that they had suffered any specific harm in
terms of disease, injury, or property damage.
In denying the motions to dismiss for lack of standing, the district judge noted that the
complaint alleges that the particulate matter being emitted by the facility is known to be harmful
to health and that the individual plaintiffs had submitted declarations stating that they are
concerned about health hazards arising from the facility's emissions and that large amounts of
"dust" had been deposited on their property. Without any elaboration, the judge ruled that these
allegations were sufficient to establish injury-in-fact as required by Article III. She further
concluded that the plaintiffs had satisfied the remaining requirements for Article III standing
that the injury be traceable to the defendant's actions and that it be redressable by a favorable
decision.
The district judge also denied the company's motion to dismiss the complaint for failing
to state claims upon which relief could be granted. The judge ruled that the company's
arguments in this regard focused on the sufficiency of the evidence that might be presented or the
plaintiffs' method of proving their claims rather than on whether the plaintiffs' allegations, if
assumed to be true for purposes of the motion, would entitle them to any relief. The judge's
opinion indicates that a number of important evidentiary issues, including the use of allegedly
"credible evidence," will likely be addressed in subsequent stages of the litigation.
"Continuing Violation"
United States v. Trident Seafoods Corp., 60 F.3d 556 (9th Cir. 1995)
In this case, the U.S. Court of Appeals for the Ninth Circuit rejected EPA's argument that
a company's failure to provide notice of asbestos removal under the asbestos NESHAP
constitutes a continuing violation and thus subjects the company to civil penalties for each day of
violation until notice is provided.
In an enforcement action in federal district court, EPA contended that a failure to provide
advance notice of asbestos removal constitutes a continuing violation of the regulatory
requirement and accordingly sought penalties from the company for every day between the day
when notice should have been given and the day when the failure was discovered by a state
official. Under this approach, potential civil liability could have reached a total of $1,100,000.
The district judge agreed that there had been a continuing violation, but reduced the civil penalty
amount to $64,750.
On appeal, the Ninth Circuit concluded that the crucial issue was whether either the
statute or the regulation stated that failure to provide such notice would constitute a continuing
violation. Because there was no such language and the Agency had an obligation and
opportunity to set forth its position in the regulations, the Court concluded that the company
could not be held liable for a continuing violation. Accordingly, the Court reversed the district
court's decision and remanded the case for imposition of a civil penalty for a violation on one
day.
The decision is likely to have important consequences for future Clean Air Act enforcement
cases in that it establishes that a violation of a notification requirement is presumed
not to be a continuing violation unless either the Act or its implementing regulations clearly
states that it should be so regarded.
United States v. Reaves, 923 F. Supp. 1530 (M.D. Fla. 1996)
In a case arising under the Clean Water Act, a federal district court held that the alleged
violation in question constituted a "continuing violation" and therefore that the government's
enforcement action was not barred by the applicable statute of limitations. The decision is
potentially significant in that EPA or citizens might seek to apply the general theory upheld by
the court to certain violations of the Clean Air Act.
The case involved allegations that, in 1981, Reaves had excavated dredged material from
a creek and used that material to fill approximately 17 acres of wetlands which were subject to
the regulatory jurisdiction of the United States. Reaves did not obtain a permit from the U.S.
Army Corps of Engineers as required by the Clean Water Act. In 1994 13 years later the
United States brought suit against Reaves, alleging that his actions violated the Clean Water Act,
as well as the Rivers and Harbors Act.
Reaves argued that the government's complaint must be dismissed because it was filed
beyond the five-year period provided in the applicable statute of limitations. In response, the
government argued that, because the dredged material had never been removed, Reaves' violation
was a continuing one and the statute of limitations had not begun to run. Alternatively, the
government maintained that the statute did not begin to run until 1989, when the Corps of
Engineers first knew, or had reason to know, that illegal activity had occurred.
In its opinion, the court agreed with the government that the violation was a "continuing
violation" and therefore that the government's suit was not barred by the statute of limitations.
In so ruling, the court relied primarily on a Fourth Circuit decision holding that a similar
violation was a continuing violation for purposes of determining whether EPA could
administratively assess penalties pursuant to a recent statutory amendment. Sasser v. EPA, 990
F.2d 127 (4th Cir. 1993).
Interestingly, the district court in Reaves did not discuss the decision in United States v.
Telluride Co., 884 F. Supp. 404 (D. Colo. 1995), where another district court rejected EPA's
"continuing violation" theory under the Clean Water Act in almost identical circumstances.
There is some concern that enforcement agencies or citizens may attempt to apply the
"continuing violation" theory to certain violations of Clean Air Act requirements. Although
Clean Air Act violations would clearly not be directly comparable to situations arising under the
Clean Water Act where illegal fill material is left in wetlands, enforcement agencies or citizens
might argue, for example, that the theory should be extended to alleged failures to meet notice or
reporting requirements in a timely fashion. Moreover, the theory might be used either to argue
that the statute of limitations has not run and/or to maintain that a violation has continued for
civil penalty assessment purposes.
In the Matter of Umetco Minerals Corp., No. CAA-(113)-VIII-92-03 (March 29, 1996)
In this administrative enforcement proceeding, an EPA Administrative Law Judge (ALJ)
ruled that the Agency can collect civil penalties from a company for not filing a required report
based on the theory that the failure to file the report gave rise to a continuing violation.
The case arose as a result of Umetco's not filing a report with EPA as required by the
National Emissions Standard for Hazardous Air Pollutants (NESHAP) for Radon Emissions from
Operating Mill Tailings. 40 C.F.R. Part 61, Subpart W. The report, which is to be filed
annually, is to set forth calculations concerning a compliance demonstration for the previous
calendar year. Umetco was unable to submit the report because it had not conducted the
necessary monitoring to collect data for the calculations.
EPA enforcement officials filed an administrative complaint seeking $80,000 in civil
penalties under the theory that the failure to file the report constituted a continuing violation of
the NESHAP until the company filed the report (or until the next annual deadline arose). They
argued that they could have sought $25,000 for each day of violation up to the statutory
maximum of $200,000 for administratively assessed penalties.
Umetco contended that the failure to file the report was a one-day violation for which a
total penalty of no more than $25,000 could be imposed. In arguing that a continuing violation
had not occurred, Umetco relied on several decisions, including United States v. Trident
Seafoods Corp., 60 F.3d 556 (9th Cir. 1995), where the court of appeals ruled that a failure to
provide notice to EPA before commencing asbestos removal did not constitute a continuing
violation of the asbestos NESHAP.
In his written opinion, the ALJ distinguished the cases relied upon by Umetco and held
that Umetco had not met its burden under section 113(e)(2) of the Act of showing that the
violation was not a continuing one. The ALJ distinguished Trident Seafoods as involving a
requirement that notice be provided at any time before the commencement of asbestos removal
even on the day before the removal as opposed to a requirement that a report be filed by a
specific deadline every year. He also stated that the question of whether a violation is continuing
for purposes of determining whether a statute of limitations has been triggered is separate from
the question of whether that violation is continuing for purpose of assessing daily penalties.
"Fair Notice" Requirement
General Electric Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995)
In a decision with potentially broad applicability, the U.S. Court of Appeals for the
District of Columbia Circuit ruled that a party cannot be liable for civil penalties where EPA has
failed to provide "fair notice" of its interpretation of the regulation allegedly violated.
The case involved GE's challenge to EPA's assessment of civil penalties against it for
violating a regulation under the Toxic Substances Control Act governing the disposal of PCBs.
GE argued that EPA's interpretation of the regulation was unreasonable and that, in any event,
it had been denied due process because it received no notice of the interpretation which EPA
followed.
After examining the language of the technically complex regulation, the Court concluded
that EPA's interpretation was "permissible" and therefore should be deferred to. However, the
Court went on to conclude that this interpretation was so difficult to ascertain from the regulation
itself that a person acting in "good faith" would not have understood it to be a likely
interpretation. The Court relied in part on the fact that different components of the Agency had
read the regulation differently. Because there was no "fair warning" of the position that EPA
would take, the Court ruled that "EPA thus may not hold GE responsible in any way either
financially or in future enforcement proceedings for the actions charged in this case."
The principle relied on by the Court that a party cannot be liable if it had no "fair notice" of an
agency's regulatory interpretation would apply to enforcement proceedings under the Clean Air
Act as well as those under other regulatory statutes. At the same time, the application of the
principle in a particular case will depend on such factors as the ambiguity and complexity of the
regulation, the extent to which the agency may have provided actual notice of its interpretation,
and the consistency with which the agency has applied the interpretation.
United States v. Hoechst Celanese Corp., 128 F.3d 216 (4th Cir. 1997)
In a decision issued on October 27, 1997, the U.S. Court of Appeals for the Fourth Circuit
ruled that EPA could not enforce a regulation against a company if the company lacked "fair
notice" that the regulation applied to it. However, the court also ruled that, after the company
received a letter from an EPA regional office setting forth that office's interpretation of the
regulation, the company no longer lacked notice and therefore became subject to the
requirements of the regulation after that date.
The Fourth Circuit's decision is important in that it confirms the existence of definite
limits on EPA's ability to enforce regulatory provisions which are ambiguous. The decision
indicates that EPA has a responsibility to write "reasonably clear" regulations and to provide
notice of significant regulatory interpretations to the regulated community.
The case involved the question of whether the benzene NESHAP was applicable to a facility in
South Carolina that continuously recycles large amounts of benzene in its operations but does not
consume significant quantities of benzene on an annual basis. The benzene NESHAP contains
an exemption provision which states that the NESHAP does not apply to equipment at plant sites
"designed to produce or use less than 1,000 megagrams of benzene per year." The principal
issue in this case concerned the precise meaning of the word "use" in the exemption provision,
i.e., whether it means "consume" as suggested at certain points in the preamble to the final rule or
whether it has a broader meaning which would include recycling of benzene in a closed loop.
Under the latter interpretation, which is the interpretation EPA adopted in this case, benzene
would be "used" every time it was recirculated past a particular point in the operation.
Because the company read the exemption as providing that only facilities that actually consume
more than 1,000 Mg/yr are covered by the NESHAP, the company assumed that the South
Carolina facility was not regulated by the NESHAP and took no steps to comply with it. The
company's position was based in part on the fact that the State of Texas had informed the
company that a similar facility the company owned in that state was exempt from the NESHAP.
The State's determination had been based on its interpretation of a memorandum from EPA
Region VI addressing the applicability of the benzene NESHAP.
This case arose when EPA brought an enforcement action in federal district court in South
Carolina and alleged that the company's facility had violated numerous provisions of the benzene
NESHAP from 1984, when the regulation become effective, until 1992, when the company took
steps to comply with the regulation. The district court ruled that, although EPA's interpretation
was entitled to deference, EPA could not enforce the NESHAP against the company because the
company had not received "fair notice" of EPA's interpretation of the exemption provision. EPA
appealed the district court's decision to the Fourth Circuit.
In its decision, the Fourth Circuit agreed with the district court that EPA's interpretation of the
regulation was a permissible reading and was entitled to deference. But the Fourth Circuit
stressed that the Due Process Clause of the Constitution requires that a party receive "fair notice"
before being deprived of property. The court stated that it must examine the facts of each case
from the perspective of the party against which governmental action is being taken to determine
whether "fair notice" has been received. After reviewing the rulemaking record and various
statements made by EPA and the states in interpreting the NESHAP, the court of appeals agreed
with the district court that the company had not received "fair notice" of EPA's interpretation of
the exemption. Accordingly, it ruled that the company was not liable for any violations of the
NESHAP until it did receive adequate notice.
However, the Fourth Circuit further ruled that the company had received adequate notice of
EPA's interpretation in June 1989, when EPA Region IV sent the company a letter discussing the
Region's interpretation of the exemption provision and requesting that the company submit
additional information regarding benzene emissions at the facility. Thus, in this respect, it
overruled the district court. The lower court had concluded that, in light of prior EPA statements
regarding the exemption, the June 1989 letter was insufficient to provide notice of the Agency's
interpretation. One of the three Fourth Circuit judges dissented and would have upheld the
district court on this point as well.
Finally, the court addressed the issue of whether the factors set forth in section 113(e)(1) of the
Act could be considered by a court in determining liability of a defendant in an enforcement
action. The court concluded that "Congress has directed that a court should address [section
113(e)(1) factors] . . . not at the liability phase of the litigation but at the penalty phase." 128
F.3d at 229. Although the opinion specifically discussed the factor concerning consideration of a
source's compliance history, its reasoning and holding are equally applicable to all the section
113(e)(1) factors. This is significant because one of those factors is "the duration of the violation
as established by any credible evidence (including evidence other than the applicable test
method)" (emphasis added). Thus, the court's opinion necessarily rejects the notion that the
"credible evidence" language in section 113(e)(1) could provide the authority for relying on such
evidence to establish the liability of a source.
The court of appeals remanded the case to the district court for a determination of penalties for
violations allegedly occurring after the company received the June 1989 letter.
Minor NSR Permits
United States v. Marine Shale Processors, 81 F.3d 1329 (5th Cir. 1996)
In this decision, the U.S. Court of Appeals for the Fifth Circuit ruled on potentially significant
issues concerning enforcement actions under the Clean Air Act. Those issues involved EPA's
ability to enforce a state preconstruction permit, the application of statutes of limitations to an
enforcement action, and the determination of civil penalty amounts.
The case arose from EPA enforcement actions in federal district court against Marine Shale
Processors (MSP), which operates a hazardous waste treatment facility in Louisiana. During the
past several years, MSP's operation of the facility has been the subject of several enforcement
actions by EPA and the State of Louisiana. Although most of the violations alleged in this case
and two related cases before the Fifth Circuit involved the Resource Conservation and Recovery
Act and the Clean Water Act, the Court did address several Clean Air Act issues that are of
general interest. We summarize those portions of the Court's decision below.
Federal Enforceability of State Preconstruction Permit
One of EPA's principal allegations before the district court was that MSP had operated a kiln
stack at the facility in violation of the terms of a state preconstruction permit issued in 1986.
EPA claimed that emissions from the kiln stack had frequently exceeded the levels specified in
the state permit.
In response, MSP contended that EPA could not bring suit to enforce the permit terms as
federally enforceable SIP requirements because the state permit had not been properly issued.
MSP based this contention on the fact that, in issuing the permit, the State of Louisiana failed to
observe the public notice and comment procedures contained in its SIP. MSP asked the court to
find that, as a result, the permit had not been issued "pursuant to" the state procedural regulations
approved by EPA under its SIP regulations and thus did not satisfy the requirements for federal
enforceability set forth in 40 C.F.R. Part 51. The district court agreed with MSP's position in this
regard and ruled that EPA could not enforce the state permit.
On appeal, the Fifth Circuit reversed the district court and ruled that the state preconstruction
permit was federally enforceable despite the procedural errors. The appellate court's decision
was based on its conclusion that EPA has broad authority to enforce state preconstruction permits
under section 113 of the Act. The Court was also concerned that MSP's argument would lead to
the result that MSP had no federally enforceable preconstruction permit, which the Court
believed would be inconsistent with the Act's dual federal/state enforcement scheme.
Accordingly, the Court remanded this portion of the case to the district court to allow EPA to
enforce the permit requirements.
Statute of Limitations
The Fifth Circuit also rejected MSP's attempted reliance on the federal statute of limitations to
defend against EPA's efforts to recover substantial civil penalties for other violations at the
facility. Apart from the kiln stack violations discussed above, EPA had alleged that MSP had
emitted pollutants from 29 separate minor sources at the facility without having obtained
necessary permits. The district court found that numerous such minor source violations had
occurred and imposed a civil penalty of $2,500,000.
On appeal, MSP contended that, because emissions from those minor sources had begun more
then five years before EPA filed its complaint, the applicable federal statute of limitations
prevented EPA from recovering civil penalties for those violations.
The Fifth Circuit rejected MSP's argument without providing much discussion. It stated that,
because EPA may seek civil penalties of $25,000 "per day for each violation," EPA was entitled
to collect penalties "for each day a minor source operates in violation of law" during the
five-year period before the complaint was filed. The Court failed to explain why the statute of
limitations should not run from the date of construction, the event that triggers the need for a
permit. It is not clear from the opinion how the issue was briefed by the parties or how the Court
would have ruled under different factual circumstances.
Civil Penalty Amounts
MSP additionally argued that the $2,500,000 penalty for the 29 minor sources was too high
because (1) the district court did not sufficiently mitigate the penalty amount in light of the
State's delay in ruling on MSP's application to amend the permit to include the sources and (2)
the district court improperly took into account the fact that MSP had not installed the pollution
control devices mentioned in its application during the time the application was pending before
the State. The Fifth Circuit rejected MSP's position. Referring to MSP's record of not applying
for a permit to cover those sources and MSP's decision to continue operating those sources
without a permit, the Court found that the district court had not abused its discretion in imposing
the $2,500,000 penalty. The Court noted that this amount was only a small fraction of the
maximum $1,560,000,000 penalty which the district court said it theoretically could have
imposed. Moreover, the Court ruled that, contrary to MSP's contentions, there had been no legal
impediment to MSP installing the pollution control equipment in question prior to the State's
action on MSP's application to amend its permit. Accordingly, the Fifth Circuit concluded that,
in assessing a civil penalty, the district court could consider the fact that MSP did not install the
equipment.
United States v. Campbell Soup Co., 1997 WL 258894 (E.D. Cal., March 11, 1997)
In a decision addressing key issues of first impression under the Clean Air Act, a federal district
judge in California ruled that an EPA enforcement action to recover civil penalties from a source
for not obtaining a state construction permit is barred by a five-year statute of limitations. Most
significantly, the court's opinion rejected EPA's claim that the failure to obtain a state
construction permit constituted a "continuing violation" and was therefore not subject to any
statute of limitations. At the same time, the court ruled that in appropriate circumstances EPA
would be able to seek injunctive relief for such a violation. With regard to certain other alleged
violations, it ruled that a source's compliance with a state-issued permit would not insulate the
source from an EPA enforcement action for alleged violations of state implementation plan (SIP)
provisions.
In its complaint, EPA alleged that the company had violated three separate provisions of the SIP:
(1) a requirement to obtain state construction permits before installing certain equipment at its
facility; (2) a requirement to apply the best available control technology (BACT) when a
modification of an existing source will cause an emissions increase in excess of a specified level;
and (3) a requirement to obtain offsets for modifications which will cause an emissions increase
in excess of another specified level. EPA sought civil penalties and injunctive relief for each of
the alleged violations. The court's opinion was issued to address the company's motion for
summary judgment.
Failure To Obtain A Construction Permit
Does Not Constitute a Continuing Violation
EPA claimed that the company should be liable for civil penalties because it did not obtain state
construction permits before installing certain equipment at its plant. The Agency, which filed its
complaint in 1995, conceded that the construction activities took place between 1980 and 1987.
The company contended that the civil penalty request was barred by the general federal statute of
limitations for actions to recover civil penalties in 28 U.S.C. 2462. That provision states that
any civil penalty action must be "commenced within five years from the date when the claim first
accrued . . . ." In turn, EPA replied that a failure to have obtained such a permit constituted a
"continuing violation," i.e., the violation would exist until the company either ceased operating
the equipment or applied for and obtained the permit. Under this "continuing violation" theory,
the five-year time period for filing suit would not yet have begun to run.
Addressing EPA's claims, the court rejected the Agency's argument that a continuing violation
exists simply because the company is continuing to operate the equipment without having
obtained construction permits. The court concluded that, under the Act, there is a clear
distinction between construction permits and operating permits and that the violation alleged
here dealt only with the construction of equipment, not its subsequent operation. Moreover, the
court concluded that "[t]he government's attempt to draw out of the statutory language a
legislative command that failures to obtain [a state construction permit] be treated as violations
of a permit to operate is baffling and unpersuasive." The court further concluded that a violation
for installing equipment without a construction permit could not otherwise reasonably be
interpreted as continuing beyond the time that construction was completed. Accordingly, the
court dismissed the civil penalty claims dealing with the failure to have obtained construction
permits. However, because the statute of limitations expressly addresses only civil penalty
actions, the court held that EPA could seek injunctive relief for the alleged violation of the
requirement to obtain construction permits. The judge noted that the lapse of time before EPA
brought suit would be relevant in determining whether to grant any relief and that it was unlikely
that any injunctive relief would be warranted here.
The court's decision is significant in that it is the first time a court has ruled directly on the issue
of whether the failure to obtain a construction permit under the Act constitutes a continuing
violation and therefore subjects the source to civil penalty liability extending beyond the
five-year period provided by the statute of limitations. The ruling that the statute of limitations
applies would prevent enforcement agencies from contending many years after the fact that a
source should have obtained a construction permit in connection with a particular activity and
therefore is liable for civil penalties. Moreover, the rationale of this decision clearly should
extend to any type of typical construction permit.
Compliance With A State-Issued Permit Does Not Necessarily Provide
A "Safe Harbor" In An EPA Action To Enforce SIP Provisions
The case also presented the separate "unsettled question" of whether a source which is operating
in compliance with a state-issued permit may nevertheless be sued by EPA and found liable for
violating the SIP because the permit fails to carry out certain SIP requirements. EPA had alleged
that, even though the company was complying with a state operating permit (which was not a
Title V permit), the company was in violation of SIP provisions requiring the use of BACT and
offsets for certain modifications. EPA argued that it may seek civil penalties for the company's
alleged violations of the SIP provisions because section 113 of the Act authorizes it to bring an
enforcement action against any person who is in violation of either a permit or the SIP itself.
The company maintained that, unless the state permit has been declared invalid, compliance with
the permit insulates a source from an EPA enforcement action to enforce relevant SIP provisions.
According to the company, EPA's statutorily-prescribed remedy in such a situation is either to
challenge the permit in question or to take over enforcement of the permit program or SIP upon
finding that violations of the permit program or SIP are sufficiently "widespread."
The court recognized that this "safe harbor" issue had not been definitively resolved in previous
Clean Air Act cases dealing with analogous enforcement situations. Although the court
acknowledged that there are sound policy reasons for agreeing with the company that compliance
with a state permit should insulate a source against EPA actions to enforce SIP provisions, the
court concluded that on balance the statutory language better supported EPA's position. The
court believed that section 113 should be read as authorizing EPA to bring an enforcement action
whenever a person has allegedly violated either a permit or the SIP. In addition, the court stated
that EPA's interpretation of the statute was not "unreasonable" and therefore was entitled to
deference.
Significantly, the opinion also stated that a court should "ameliorate" any "harshness" resulting
from this interpretation of the Act at the remedy stage of the case. In other words, the relief
granted to EPA should take account of any possible unfairness in finding a source liable when it
is complying in good faith with a duly issued state permit.
Furthermore, the opinion explicitly indicates that the court was not addressing situations
involving compliance with a Title V permit and implies that it would have reached a different
conclusion regarding a source's potential liability if a Title V permit were involved. The opinion
points out that the Act establishes a process under which EPA may object to a proposed Title V
permit and refers to the Act's permit shield provision as creating a "safe harbor from suit to a
person in compliance with the [Title V] permit." Slip op. at 14.
See Ogden Projects, Inc. v. New Morgan Landfill Co., 911 F. Supp. 863 (E.D. Pa. 1996) (Citizen
Suits).
"Potential to Emit" Definition
National Mining Ass'n v. EPA, 59 F.3d 1351 (D.C. Cir. 1995)
In this decision, the U.S. Court of Appeals for the District of Columbia Circuit struck down
EPA's definition of "potential to emit" in the section 112 General Provisions Rule. Under section
112(a)(1), a source is classified as a "major source" if it has the "potential to emit considering
controls" 10 tons per year or more of any HAP or 25 tons per year or more of any combination of
HAPs. In response to petitions for review filed by the Chemical Manufacturers Association
(CMA) and the American Petroleum Institute (API), the Court ruled that EPA's provision
limiting consideration of controls to those that are "federally enforceable" is impermissible in
determining a source's "potential to emit considering controls."
The Court also ruled on two other significant issues arising under the General Provisions Rule.
First, the Court affirmed EPA's position that it can aggregate all HAP emissions at a plant site to
determine whether a "major source" exists without considering emissions on either a source
category or standard industrial classification (SIC) code basis. Second, the Court ruled that,
under section 112, EPA can consider fugitive emissions in determining whether a source is a
"major source" without conducting special rulemaking pursuant to section 302(j) of the Act.
These rulings are discussed in more detail below.
Court Strikes Down "Federal Enforceability" Requirement
In Section 112 General Provisions Rule
Petitioners CMA and API argued that EPA's requirement that only "federally enforceable"
controls shall be considered in determining a source's "potential to emit" conflicted with statutory
language which provides, without limitation, that controls are to be considered. They also
argued, among other things, that EPA's existing scheme imposes burdensome requirements on
minor sources which were not intended by Congress.
EPA contended that it possesses broad authority to determine which controls should be
considered in determining a source's "potential to emit" and that "federal enforceability" is a
permissible means of determining which controls should be considered.
The Court held that Congress intended that controls must be "effective" in order to be
considered. The Court noted that EPA's federal enforceability requirement goes "beyond the
mere effectiveness of particular constraint[s] as a practical matter." It further noted that, under
EPA's approach, even a state program with unquestionably effective controls would be ignored
unless EPA's "federal enforceability" criteria had been met. The Court additionally concluded
that the Act's legislative history does not support EPA's approach and rejected EPA's argument
that Congress had ratified the Agency's approach in enacting the 1990 amendments. Finally, the
Court concluded that EPA had not explained why it was necessary to disregard all state and local
controls which are not federally enforceable in order to ensure that controls that are to be taken
into account are effective. Accordingly, the Court granted the petitions for review of CMA and
API.
On January 2, 1996, the D.C. Circuit issued a brief, one-paragraph order denying the motion of
CMA and API to enforce the Court's mandate. CMA and API had filed the motion because EPA
had taken the position that the decision had not vacated its PTE definition but had only remanded
it to the Agency for further consideration in light of the Court's decision. CMA and API argued
that the reasoning of the Court's opinion and the fact that the Court had explicitly granted their
petitions on this issue demonstrated that the PTE definition for section 112 had been vacated.
Furthermore, they maintained that the Court's decision in Chemical Manufacturers Ass'n v. EPA,
70 F.3d 637 (D.C. Cir. 1995), which vacated the identical PTE definition for EPA's new source
review (NSR) program based on the NMA decision, necessarily meant that the PTE definition
for section 112 had already been vacated.
In its January 2 order, the Court stated without explanation that the opinion and judgment in
NMA had not vacated the PTE definition for section 112 and therefore that the motion should be
denied. The Court did not attempt to reconcile this order with its order in the CMA case.
Morgan Lewis prepared the briefs on behalf of CMA and API on the "potential to emit"
issue and presented oral argument on behalf of those petitioners.
Court Upholds EPA's Approach to Aggregating Emissions At A Site
To Determine Whether A "Major Source" Exists
Also before the Court was the question whether, in determining whether a site constitutes a major
source under section 112, EPA may aggregate HAP emissions from all facilities on a contiguous
plant site under common control. The General Electric Company maintained that EPA can
aggregate emissions only on a "source category" basis; the National Mining Association (NMA)
and the American Forest and Paper Association maintained that emissions can be combined only
if the facilities fall within the same SIC code.
EPA interpreted the "major source" definition in section 112(a)(1) as allowing it to aggregate all
emissions at a site regardless of whether the emissions units fall within the same source category
or SIC code. Thus, under EPA's approach, a major source may consist of emission units from
multiple source categories or SIC codes.
In ruling against the challenges to EPA's approach, the Court concluded that EPA's reading of the
statute is consistent with the language of section 112(a)(1) when viewed in isolation. The Court
also found that EPA's interpretation is consistent with other provisions of section 112 and with
the approach EPA has taken in implementing Title V of the Act. Finally, the Court concluded
that the legislative history does not compel a conclusion that EPA must consider SIC codes in
defining "major source." The effect of the Court's decision is to leave intact EPA's current
approach to determining whether a site constitutes a major source.
Court Holds That EPA, In Making Major Source Determinations, May Count Fugitive Emissions
Without Conducting Special Rulemaking
NMA additionally argued that EPA may not count fugitive emissions of HAPs emissions which
are emitted other than from a stack, vent, or similar opening in making major source
determinations unless it has conducted a special rulemaking pursuant to section 302(j) of the Act.
In so arguing, NMA relied principally upon the Court's decision in Alabama Power Co. v.
Costle, 636 F.2d 323 (D.C. Cir. 1979). In that case, the Court had ruled in the context of new
source review provisions that EPA could not, without such a rulemaking, include fugitive
emissions in a facility's aggregate emissions for purposes of determining whether the facility was
a "major emitting facility" under section 169(1) of the Act.
In upholding EPA's approach to fugitive emissions under section 112, the Court ruled that
Alabama Power was not controlling with regard to section 112 and that EPA's interpretation was
permissible. The Court noted that Title V of the Act and the statute's legislative history draw a
distinction between "major sources" under section 112 and "major stationary sources" as defined
in section 302. In any event, the Court concluded that section 112(a)(1), which defines "major
source," indicates that all emissions should be counted and thus satisfies language in section
302(j) stating that special rulemaking is unnecessary if the statute "otherwise expressly
provide[s]" it need not be conducted.
Chemical Manufacturers Ass'n v. EPA, 70 F.3d 637 (D.C. Cir. 1995)
In a short order entered on September 15, 1995, the D.C. Circuit expressly vacated and remanded
the "potential to emit" definition in EPA's new source review (NSR) regulations in light
of the National Mining Ass'n decision. The "potential to emit" definition in EPA's 1989
regulations implementing its NSR program contained a "federal enforceability" requirement
similar to that in the section 112 General Provisions Rule. CMA had challenged the "federal
enforceability" requirement in the NSR regulations, but the litigation was stayed in light of the
passage of the 1990 Amendments to the Act and was not briefed until 1995. The effect of the
Court's decision was to nullify the PTE definitions set forth in the NSR regulations.
On January 22, 1996, EPA issued interim guidance addressing the impact of the NMA and CMA
PTE decisions on the regulatory programs involved. Among other things, the guidance stated
that, for purposes of the PTE definitions in the NSR program, the term "federally enforceable"
should be read to mean "federally enforceable or legally and practicably enforceable by a state or
local air pollution control agency." Clean Air Implementation Project v. EPA, 1996 WL 393118 (D.C. Cir. June 28, 1996)
On June 28, 1996, the D.C. Circuit issued a one-page summary order expressly vacating the
definition of "potential to emit" in EPA's Part 70 regulations implementing the Title V permit
program. The Court's order was issued in response to a motion for summary vacatur filed by the
Chemical Manufacturers Association and the Clean Air Implementation Project in December
1995. The Court based its ruling on its prior decisions invalidating EPA's PTE definitions
established for the section 112 and new source review (NSR) programs. National Mining Ass'n
v. EPA, 59 F.3d 1351 (D.C. Cir. 1995); Chemical Manufacturers Ass'n v. EPA, 70 F.3d 637
(D.C. Cir. 1995).
In light of the D.C. Circuit's vacating of the Part 70 PTE definition, Title V permitting authorities
are now in a position to take into account all "effective" state and local controls whether or not
they are federally enforceable. Previously, only those controls deemed federally enforceable by
EPA could be considered in making major source determinations. However, because state Title
V programs already approved by EPA contain the federal enforceability requirement, further
state action may be necessary before sources may unqualifiedly rely on state or local controls
which are not federally enforceable. The question of whether, and to what extent, further state
action is necessary will depend on the specific provisions of each state's law and how that state
chooses to proceed.
On August 27, 1996, EPA issued an additional guidance memorandum which addressed, among
other things, the Clean Air Implementation Project decision. The guidance explained that,
because the Part 70 PTE definition had been vacated, the term "federally enforceable" should be
read to mean "federally enforceable or legally and practicably enforceable by a state or local air
pollution control agency." The memorandum also indicated that EPA would be undertaking
rulemaking in the future to address the PTE definition for the section 112, NSR, and Title V
programs in response to the D.C. Circuit's decisions.
Morgan Lewis prepared the motion for summary vacatur for the Chemical Manufacturers
Association and the Clean Air Implementation Project.
See Ogden Projects, Inc. v. New Morgan Landfill Co., 911 F. Supp. 863 (E.D. Pa.1996) (Citizen
Suits).
PSD Requirements
In re: Commonwealth Chesapeake Corp., PSD Appeal Nos. 96-2 et seq. (EAB, Feb. 19, 1997)
This case involved a ruling by EPA's Environmental Appeals Board (EAB) upholding a
prevention of significant deterioration (PSD) permit for an electric utility plant against several
challenges by nearby residents. The EAB's decision addressed a number of substantive areas
concerning PSD permits, including a party's standing to challenge PSD permits, analysis of
visibility impacts, determination of best available control technology (BACT), and consideration
of non-air quality related impacts.
The permit appeals arose from the proposed construction of a new gas turbine-fired plant in
Virginia designed to provide electricity during peak periods. The PSD permit was issued by the
Virginia Department of Environmental Quality (VDEQ) pursuant to EPA's delegation of
authority to administer the federal PSD program. Four individuals living near the facility
subsequently filed appeals with the EAB seeking to overturn VDEQ's issuance of the permit on a
variety of grounds.
As an initial matter, the EAB dismissed one appeal because the petitioner lacked standing to
challenge the permit. Because the petitioner had neither commented on the draft permit nor
participated in the public hearing and his challenge did not involve changes from the draft to
final permit, the EAB ruled that he lacked standing under the regulatory scheme to pursue an
appeal.
The EAB noted that, although the remaining petitioners had raised numerous claims dealing with
public health impacts that would allegedly result from construction and operation of the plant, it
found no basis in these claims for denying the permit. The EAB determined that there was no
allegation that the permit would cause a violation of either a national ambient air quality standard
(NAAQS) or a PSD increment or that any other statutory or regulatory requirement regarding
consideration of health impacts had been violated. Accordingly, the EAB ruled that the VDEQ's
decision must be upheld in this regard.
The EAB likewise concluded that the VDEQ's determination of what control technology
constituted BACT for the facility should be affirmed. The petitioners alleged that high
temperature selective catalytic reduction (SCR) technology should be required as BACT and that
the permit should contain lower NOx limits to reduce visibility impacts on two nearby federal
Class II areas. However, the EAB concluded that the VDEQ had properly determined that water
injection was the appropriate control technology and that SCR was not a cost-effective control
option for the plant. In particular, the EAB found that the record showed that the incremental
cost of installing SCR technology would be more than $8,500 per additional ton of NOx
removed, whereas the only other comparable plant required to utilize SCR did so at an
incremental cost of only $2,200 per ton. The EAB also stated that there was no requirement that
a formal visibility impact analysis be conducted for Class II areas.
In re EcoElectrica, L.P., PSD Appeal Nos. 96-8 and 96-13 (EAB, April 27, 1997)
In these consolidated appeals, the EAB denied two petitions challenging Region II's issuance of a
PSD permit to EcoElectrica, L.P., to install and operate a cogeneration facility in Puerto Rico and
to construct a liquefied natural gas terminal to receive fuel deliveries for the facility. The
petitioners were an individual who advocated energy conservation measures and a citizen group
which opposed construction of the project. The Board's principal holdings were the following:
The Region did not abuse its discretion in exempting the company from
preconstruction ambient air quality monitoring requirements, because the
facility's own projected air quality impacts were less than de minimis levels for all relevant
pollutants. The regulations provide for an exemption from the monitoring requirements in such
instances.
The Region acted properly by not requiring EcoElectrica to perform multi-source
monitoring, i.e., analyzing the combined impacts from the existing facilities near the proposed
project. EPA's Draft NSR Workshop Manual calls for such modeling only when an applicant's
modeled air quality impacts exceed the "significant ambient threshold levels" set forth in the
Manual.
The Region adequately considered the environmental justice impacts of the permit. It
conducted an analysis of the area where most of the emission impacts would result and
concluded that the median income levels in that area were actually higher than those elsewhere in
the vicinity.
The Region did not err in deferring to the judgment of Puerto Rican officials regarding
whether there is a need for the project.
In re Kawaihae Cogeneration Project, PSD Appeal Nos. 96-9 et al. (EAB, April 28, 1997)
In this administrative appeal, the EAB denied review of a PSD permit issued by the Hawaii
Department of Health (DOH) to Kawaihae Cogeneration Partners (KCP) to construct a
cogeneration facility. The permit was challenged both by the Hawaii Electric Light Company
(HELCO) and by four individual petitioners. We summarize the most significant rulings of the
Board below:
The EAB rejected HELCO's arguments that the DOH, in determining that selective catalytic
reduction (SCR) constituted BACT for controlling NO2 emissions, had failed to consider that the
SCR's ammonia system is supposedly susceptible to catastrophic toxic vapor releases. The EAB
concluded that there was no evidence that any facility utilizing the SCR technology had ever had
such an event occur and that DOH had appropriately evaluated the risks from use of the
technology. In addition, the EAB rejected the individual petitioners' assertions that SCR is an
unproven technology that was not adequately studied during the permit proceeding.
Although HELCO contended that the permit's emission limits for SOx, PM, CO, and NOx
were erroneously based on an improper modeling technique (merged plume dispersion
modeling), the EAB ruled that HELCO had not raised this argument during the public comment
period and therefore could not raise it on appeal.
The EAB upheld DOH's handling of emissions baseline studies and meteorological studies
against claims that the studies had been inadequately reviewed.
In response to petitioners' contentions that an Environmental Impact Statement (EIS) should
have been prepared under the National Environmental Policy Act, the EAB noted that actions
under the Clean Air Act (including the issuance of PSD permits) are exempt from any
requirement to prepare an EIS.
The EAB found that petitioners had failed to support their allegations that the permit would
cause the generation of "excessive" amounts of sulfur, ammonia, lead, and "other dangerous
chemicals" and that it would violate international agreements on global warming.
The EAB ruled that it lacked jurisdiction to review a permit condition which required the
permittee to submit a risk management plan for handling ammonia. Petitioners maintained that
the risk management plan would constitute a permit modification that should be subject to public
review and comment. However, the EAB determined that the permit condition addressed Title V
operating permit requirements, not PSD permit requirements. Because the condition was a state
Title V permit condition, the EAB ruled that it could not be reviewed in a PSD permit review
proceeding.
Title V Permit Program
Western States Petroleum Ass'n v. EPA, 87 F.3d 280 (9th Cir. 1996)
In this case, the Ninth Circuit Court of Appeals overturned EPA's determination that the State of
Washington could not exempt insignificant emissions units (IEUs) from Part 70 permit
compliance requirements. The Court ruled that EPA's action was "arbitrary and capricious"
because it was inconsistent with EPA's actions on other state Title V programs.
When Washington submitted its proposed Title V program to EPA for approval, it sought to
exempt IEUs both from the permit application requirements in 40 C.F.R. 70.5 and from the
permit compliance requirements in 40 C.F.R. 70.6. The latter section includes monitoring,
performance testing, reporting, recordkeeping, and compliance certification requirements.
Although EPA Region X agreed that IEUs need not be subject to permit application
requirements, it concluded that IEUs could not be exempted from the permit compliance
requirements in section 70.6. Accordingly, EPA granted interim approval of the State's program
and conditioned final approval on repeal of the existing IEU exemption. A group of industry
petitioners challenged EPA's action in the court of appeals, and the State intervened to defend its
proposed program.
In its decision, the Ninth Circuit concluded that EPA's action disapproving the exemption was
"arbitrary and capricious" because the Agency had approved essentially identical exemptions in
at least eight other state programs. The Court ruled that an agency must justify such a clear
departure from its prior interpretations and rulings and that EPA had provided no justification at
all for its inconsistent action in this case. As a result, the Court reversed EPA's action on
Washington's proposed program and remanded the matter to EPA.
The Court's ruling is significant in two principal ways. First, on a broad level, the decision
reaffirms the important principle that an agency may not reach inconsistent results on an issue
unless it can affirmatively justify its change in position. This principle is not limited to Title V
approvals, but instead applies to any action that EPA or another federal agency may take. One
corollary of the decision is that two EPA regions may not interpret the law differently from one
another merely because the regions have different policy preferences or have failed to
communicate with one another.
Second, the ruling is likely to affect EPA's decisions on other proposed state programs containing
similar IEU exemptions. Although the Court's decision is a binding legal precedent only for the
states within the Ninth Circuit and does not foreclose EPA from attempting to justify a contrary
position in future cases, parties can be expected to rely on the decision if EPA rejects a similar
state IEU exemption in the future without providing adequate justification
.
See Clean Air Implementation Project v. EPA, 1996 WL 393118 (D.C. Cir. June 28, 1996)
("Potential to Emit" Definition).
See United States v. Campbell Soup Co., 1997 WL 258894 (E.D. Cal., March 11, 1997)
(Preconstruction Permits).
See Color Communications, Inc. v. The Illinois Pollution Control Board, 680 N.E. 2d 516 (Ill.
1997) ("Major Source" Definition).
Clean Air Act
Litigation Developments
Index of Cases
Adair v. Troy State University of Montgomery, 892 F. Supp. 1401 (M.D. Ala. 1995)
Chemical Manufacturers Association v. EPA, 70 F.3d 637 (D.C. Cir. 1995)
Clean Air Implementation Project v. EPA, 1996 WL 393118 (D.C. Cir. June 28, 1996)
Color Communications, Inc. v. The Illinois Pollution Control Board, 680 N.E.2d 516 (Ill.
1997)
Fried v. Sungard Recovery Services, Inc., 900 F. Supp. 758 (E.D. Pa. 1995)
Fried v. Sungard Recovery Services, Inc., 916 F. Supp. 465 (E.D. Pa. 1996)
General Electric Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995)
Glazer v. American Ecology Environmental Services Corp., 894 F. Supp. 1029 (E.D. Tex.
1995)
In re Commonwealth Chesapeake Corp., PSD Appeal Nos. 96-2 et seq (EAB, Feb. 19, 1997).
In re EcoElectrica, L.P., PSD Appeal Nos. 96-8 and 96-13 (EAB, April 27, 1997)
In re Kawaihae Cogeneration Project, PSD Appeal Nos. 96-9 (EAB, April 28, 1997)
In the Matter of Commercial Cartage Co., No. CAA-93-H-002 (EPA) (Aug. 19, 1997)
In the Matter of Umetco Minerals Corp., No. CAA-(113)-VIII-92-03 (EPA) (March 29, 1996)
Louisiana Environmental Action Network v. Browner, 87 F.3d 1379 (D.C. Cir. 1996)
National Mining Association v. EPA, 59 F.3d 1351 (D.C. Cir. 1995)
Ogden Projects, Inc. v. New Morgan Landfill Co., 911 F. Supp. 863 (E.D. Pa.1996)
Sierra Club v. Public Service Co. of Colorado, 894 F. Supp. 1455 (D. Colo. 1995)
Sierra Club v. Tri-State Generation and Transmission Association, 173 F.R.D. 275 (D. Colo.
1997)
United States v. Campbell Soup Co., 1997 WL 258894 (E.D. Cal., March 11, 1997)
United States v. Hoechst Celanese Corp., 128 F.3d 216 (4th Cir. 1997)
United States v. Marine Shale Processors, 81 F.3d 1329 (5th Cir. 1996)
United States v. Reaves, 923 F. Supp. 1530 (M.D. Fla. 1996)
United States v. Trident Seafoods Corp., 60 F.3d 556 (9th Cir. 1995)
U.S. Public Interest Research Group, et al. v. Bayou Steel Corp., Civ. No. 96-0432 (E.D. La.
Sept. 16, 1997)
Western States Petroleum Association v. EPA, 87 F.3d 280 (9th Cir. 1996)
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