TERRENCE F. McVERRY, District Judge.
Pending before the Court are the following motions to dismiss: EME HOMER CITY GENERATION L.P.'S MOTION TO DISMISS (Doc. No. 85); DEFENDANTS HOMER CITY OWNER-LESSORS' MOTION TO DISMISS (Doc. No. 87); NEW YORK STATE ELECTRIC & GAS CORPORATION'S MOTION TO DISMISS (Doc. No. 88); and PENNSYLVANIA ELECTRIC COMPANY'S MOTION TO DISMISS (Doc. No. 91), each with a brief in support. Plaintiff United States of America and three intervenor Plaintiffs, Commonwealth of Pennsylvania Department of Environmental Protection ("PADEP"), State of New York and State of New Jersey (collectively the "Intervenors"), filed briefs in opposition. All Defendants filed reply briefs. The issues have been fully briefed and are ripe for disposition.
This case involves alleged violations of the federal Clean Air Act, 42 U.S.C. § 7470 et seq., at the Homer City coal-fired power plant in Indiana County, Pennsylvania (the "Plant"). Although the legal issues raised in this case are complex, the facts pled in the three separate Complaints filed by the United States and the Intervenor state Plaintiffs are relatively straight-forward.
Defendant New York State Electric and Gas Corporation ("NYSEC") was an owner of the Plant from January 1968 until June 1998. Defendant Pennsylvania Electric Company ("PENELEC") was an owner of the Plant from January 1968 until March 1999 and also operated the Plant during this same timeframe.
The Plant has three coal-fired generating units. Units 1 and 2 began operating in 1969, prior to the enactment of the provisions of the Clean Air Act at issue, and neither unit has been retrofitted with
In August 1991, the Former Owners commenced a multi-million dollar project to replace the economizer on Unit 2, which included modification of the backpass gas ductwork and installation of new reheat temperature control dampers and internal boiler supports and related work. In March 1994, the Former Owners commenced a similar project to replace the economizer on Unit 1. In 1995 and 1996, the Former Owners replaced the vertical reheater pendants on Units 1 and 2.
On August 3, 1995, PENELEC submitted an application for an operating permit for the Plant pursuant to the requirements of Title V of the Clean Air Act. On January 30, 2004, PADEP issued a final Title V permit for the Plant. The effective date of the permit was December 1, 2004. United States Complaint ¶ 61. The Intervenors allege that PADEP issued several operating permits for the emission sources at the Plant, the most recent of which is Title V permit No. 32-00055, issued on January 2004, with an amendment effective on December 1, 2004. PADEP/New York Complaint ¶ 23; New Jersey Complaint ¶ 22. The actual Title V permit was not attached to the Complaints or otherwise provided to the Court. It is unclear whether concerns regarding the projects at issue were raised during the ten year period when the Title V permit application was under review by regulators.
For many years, environmental regulators took no action to challenge the 1991, 1994, 1995 or 1996 projects as improper. On June 12, 2008, the United States Environmental Protection Agency ("EPA") issued a Notice and Finding of Violation ("NOV") to the Current Owners. On May 6, 2010 and November 1, 2010, the EPA issued subsequent NOVs to all of the named Defendants. Plaintiffs allege that Defendants undertook the 1991, 1994, 1995 and 1996 projects without having obtained the requisite PSD permits. In addition, Plaintiffs allege that because the projects should have triggered a requirement to install the Best Available Control Technology ("BACT") to control emissions of sulfur dioxide ("S02") and/or particulate matter, Defendants failed to submit a complete application for a Title V operating permit, and thus failed to obtain a proper or valid Title V operating permit.
The United States initiated this action on January 6, 2011, with the filing of a four-count civil complaint against all of the named Defendants. Counts 1 and 3 allege violations by all Defendants of the PSD provisions of the Clean Air Act, 42 U.S.C. §§ 7470-7492, and the federally-approved Pennsylvania State Implementation Plan ("SIP"), for the projects at Units 1 and 2, respectively. Counts 2 and 4 allege violations by all Defendants of the Title V provisions of the Clean Air Act, 42 U.S.C. §§ 7661-7661f, and the Pennsylvania Title
On January 13, 2011, PADEP and New York intervened in the action and filed a five-count Complaint which provides more factual details, asserts similar violations of the PSD and Title V provisions of the federal Clean Air Act, asserts corresponding violations of the Pennsylvania Air Pollution Control Act ("APCA"), 35 P.S. § 4001, et seq., and its implementing regulations, and adds a common law public nuisance claim. Additionally, New Jersey filed a separate three-count Intervenor Complaint which asserts essentially the same federal Clean Air Act claims set forth by the United States. The Intervenors assert standing under the Clean Air Act citizen suit provision, 42 U.S.C. § 7604(a)(1), and seek injunctive relief and civil penalties relating back to the dates of the original projects.
A motion to dismiss pursuant to Fed. R.Civ.P. 12(b)(6) challenges the legal sufficiency of a complaint. The Court must accept as true all well-pleaded facts and allegations, and must draw all reasonable inferences therefrom in favor of the plaintiff. However, as the Supreme Court made clear in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the "factual allegations must be enough to raise a right to relief above the speculative level." Id. The Supreme Court has subsequently broadened the scope of this requirement, "stating that only a complaint that states a
This case primarily involves statutory interpretation of the Clean Air Act. In Alston v. Countrywide Financial Corp., 585 F.3d 753 (3d Cir.2009), the Court of Appeals for the Third Circuit described the task as follows:
Id. at 759 (citations omitted). Accordingly, the Court begins with an examination of the applicable statutory framework.
In 1970, in response to dissatisfaction with existing air pollution programs, Congress
As with most legislation, the Clean Air Act amendments reflected a congressional compromise. As explained in Chevron, 467 U.S. at 847, 104 S.Ct. 2778: "the legislative struggle was basically between interests seeking strict schemes to reduce pollution rapidly to eliminate its social costs and interests advancing the economic concern that strict schemes would retard industrial development with attendant social costs." As one legislative compromise, the Clean Air Act has less stringent regulations regarding existing power plants as compared to newly constructed sources of electricity. In other words, existing plants were "grandfathered" in recognition of the expense of retrofitting pollution-control equipment. Compare 42 U.S.C. §§ 7411(d) and (f). As explained in Wisconsin Elec. Power Co. v. Reilly, 893 F.2d 901, 909 (7th Cir.1990):
Accord United States v. Cinergy Corp., 458 F.3d 705, 709 (6th Cir.2006) (Clean Air Act treats old plants more leniently than new ones but there is an expectation that old plants will wear out and be replaced by new ones which are subject to more stringent pollution controls). Utility companies are not entitled to evade the Clean Air Act requirements by keeping the grandfathered power plants in operation indefinitely. Alabama Power Co. v. Costle, 636 F.2d 323, 400 (D.C.Cir.1979) ("The statutory scheme intends to `grandfather' existing industries; but the provisions concerning modifications indicate that this is not to constitute a perpetual immunity from all standards under the PSD program.") Accordingly, the PSD permit requirements
Congress amended the Clean Air Act again in 1977 to add the "Prevention of Significant Deterioration" (PSD) program, which was intended to ensure that air quality in areas which were already "clean" (i.e., in compliance with NAAQS) would not degrade. Alaska Dep't, 540 U.S. at 470-71, 124 S.Ct. 983. The statutory authority for the PSD program is in Part C of Subchapter I of the Clean Air Act, 42 U.S.C. §§ 7470-7479. Initially, the PSD program applied only to construction of new sources of pollution. However, in November 1977, Congress passed a technical amendment which made the PSD program applicable to projects of modifications to grandfathered plants. Safe Drinking Water Amendments of 1977, Pub.L. No. 95-190, 91 Stat. 1393, 1402 (1977) ("The term [`construction'] when used in connection with any source or facility, includes the modification (as defined in [42 U.S.C. § 7411(a)(4)]) of any source or facility"). See United States v. Duke Energy Corp., 411 F.3d 539, 548 (4th Cir. 2005), rev'd on other grounds, 549 U.S. 561, 127 S.Ct. 1423, 167 L.Ed.2d 295 (2007); Alabama Power, 636 F.2d at 401 n. 49. The implications of this "technical amendment" were not fully appreciated at the time.
In this case, Plaintiffs allege that Defendants violated 42 U.S.C. § 7475(a), which is entitled "Preconstruction Requirements" and provides as follows:
42 U.S.C. § 7475(a) (emphasis added).
According to the plain meaning of the language of the statute, § 7475(a) provides that "No major emitting facility . . . may be constructed" unless each of the statutory conditions are met. One of the preconditions to construction is the installation of Best Available Control Technology ("BACT"). § (a)(4). BACT is not a particular type of technology. Rather, it is defined in the Act as an "emission limitation based on the maximum degree of reduction of each pollutant subject to regulation . . . which the permitting authority, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable" for the facility in question. 42 U.S.C. § 7479(3). As provided in §§ 7475(a)(1) and (a)(8), the Clean Air Act determination of emissions limitations and BACT for the facility are to be "set forth" in the PSD permit.
The PSD requirements are forward-looking and framed in terms of that which utilities must do before commencing construction. Accordingly, an operator's duty is "not prescience, but merely a reasonable estimate of the amount of additional emissions that the change will cause." Cinergy, 458 F.3d at 709; United States v. Ohio Edison Co., 276 F.Supp.2d 829, 863 (S.D.Ohio 2003) (operator must perform pre-construction estimate of whether change will result in significant net emissions increase). Thus, in this case the Former Owners were required to have made a reasonable estimate, in advance, of whether the 1991, 1994, 1995 and 1996 projects constituted major modifications which would result in a significant increase of S02 emissions. The regulations provide guidance but there are no clear, bright-line rules. In Cinergy, 458 F.3d at 709, the Court recognized that "it may be a very difficult estimate to make." In United States v. Ohio Edison Co., 276 F.Supp.2d 829, 832 (S.D.Ohio 2003), the Court lamented "an abysmal breakdown in the administrative process" in which various administrations have failed to address the fundamental issue of "at what point plants built before 1970 must comply with new air pollution standards."
The Clean Air Act was again amended in 1990 (thirteen years after the PSD program was enacted) to provide the Title V statutory regime which governs the consideration and issuance of operating permits at power plants. The Complaints allege that Defendants violated 42 U.S.C. §§ 7661a(a), 7661b(c) and 7661c(a). Those statutory sections provide in relevant part as follows:
§ 7661c(a) Conditions
(Emphasis added).
To summarize these sections, power plant operators must submit a compliance plan and a Title V permit application to regulators, who shall after review issue or deny the Title V operating permit. § 7661b. Each Title V permit is required to include all emission limitations and standards, and "such other conditions" necessary to assure a plant's compliance with the Clean Air Act. § 7661c. It is unlawful to violate a condition of a Title V permit or to operate a plant other than in compliance with a Title V permit. § 7661a. Title V recognizes that sources may be required to obtain a permit under the PSD program (part C of subchapter I) but specifically limits a source's compliance obligation to permits issued "under this subchapter," i.e., Title V permits. § 7661a. Title V does not alter the requirements of the PSD program to obtain a preconstruction permit. § 7661a.
Structurally, it is clear that PSD and Title V are two separate programs, enacted at different times, and specified in different subchapters of the Clean Air Act.
See also United States v. Illinois Power Co., 245 F.Supp.2d 951, 955 (S.D.Ill.2003) (noting the distinction between violations of preconstruction permit requirements and operating permit requirements).
Title V permits do not generally impose any new emission limits, but are intended to incorporate into a single document all of the Clean Air Act requirements applicable to a particular facility. See Romoland Sch. Dist. v. Inland Empire Energy Ctr., LLC, 548 F.3d 738, 742 (9th Cir.2008). Similar to other Clean Air Act programs, Title V is implemented primarily by the states under EPA oversight. See id. In states with EPA-approved programs, Title V permits are issued by the state permitting authority, subject to EPA review and veto. See id. at 742-43; 42 U.S.C. § 7661d.
Plaintiffs allege that the Former Owners violated the PSD program by having undertaken construction projects without having obtained the necessary PSD preconstruction permits. Plaintiffs also allege that the Current Owners violated the PSD program by failing to implement BACT at units that had been improperly modified because the PSD program imposes ongoing obligations at modified facilities.
The PSD program is rather straight-forward when applied to construction of new plants but is difficult to enforce when applied to operating, grandfathered facilities. Because grandfathered facilities are subject to less stringent rules regarding emissions, power plant operators have an obvious incentive to attempt to keep them in operation as long as possible to avoid the cost of installing more advanced pollution controls. See Cinergy, 458 F.3d at 709. In addition, there are often no clear-cut rules for specifically determining which projects will trigger the PSD requirements. Id. Again, power plant operators have an obvious incentive to make a "reasonable" prediction that the stricter emissions standards will not be implicated. Nevertheless, the PSD regulations are only triggered if and when the power plant operator (the person with an incentive to avoid the program) voluntarily "self-reports" by applying for a preconstruction permit. There is no mechanism—other than post-hoc litigation—by which environmental
If the operator determines (rightly or wrongly) that a pre-construction PSD permit is not necessary for a particular modification of the plant, no specific action is required on anyone's part—the operator simply continues to run the plant as usual. The statutory and regulatory mechanisms for implementing pollution controls are not triggered. No pre-construction permit is issued by which operating conditions may be established or later incorporated into a Title V permit. The process to determine B ACT case-by-case at the facility does not occur. As explained in United States v. Midwest Generation, LLC, 694 F.Supp.2d 999, 1007 (N.D.Ill.2010):
This same structural difficulty within the PSD program was also noted in Sierra Club v. Otter Tail Power Co., 615 F.3d 1008, 1016 (8th Cir.2010):
Accord National Parks and Conservation Ass'n, Inc. v. Tennessee Valley Authority (Nat'l Parks 11th Cir.), 502 F.3d 1316, 1325 (11th Cir.2007) (BACT is to be determined through the preconstruction permitting process).
These structural aspects of the PSD program (vague triggering standards and reliance on the operator to voluntarily apply for a permit and enter the program) are amplified when a grandfathered facility changes ownership. In this case, the Former Owners apparently decided in 1991, 1994, 1995 and 1996 that permits under the PSD program were not needed for the projects at issue. Accordingly, PSD permits were not applied for or obtained and the Plant continued with its normal operations. In each instance, the five-year statute of limitations for recovering a civil penalty for a PSD violation expired without any challenge from federal or state regulators. The Former Owners did apply for a Title V permit, which was under consideration by the reviewing agency for almost ten years. A Title V permit was eventually issued in January 2004. When the Current Owners purchased the Plant, there was no pending alleged violation of the PSD program that the purchasers could have discovered during their due diligence.
Understandable frustration with apparent efforts to evade the PSD program has led some courts to construe § 7475(a) more broadly than others. In United States v. Am. Elec. Power Serv. Corp., 137 F.Supp.2d 1060, 1066 (S.D.Ohio 2001), the Court commented that "it is illogical to conclude that a defendant may only be held liable for constructing a facility, rather than operating such facility, without complying with the permit requirements." In New Jersey v. Reliant Energy MidAtlantic Power Holdings, LLC, 2009 WL 3234438 (E.D.Pa.2009), the Court extended this reasoning to suggest that an operator may be held liable "simply because its predecessor owner failed to secure the appropriate permit." See also New York v. Niagara Mohawk Power Corp., 263 F.Supp.2d 650, 663 (W.D.N.Y.2003) (allowing operator to use its own failure to obtain preconstruction permit as a shield "would lead to absurd and surely unintended results"). This contention might be persuasive if the failure to obtain a PSD permit was "cut and dry" and indisputable (as it may be when applied to new construction). However, in the factual scenarios described in many of the reported cases which involve grandfathered facilities, such is seldom the case. To the contrary, the power plant operators often vigorously contest their alleged PSD liability and assert that they were
Thus, there is, indeed, a principled and logical basis for distinguishing between the original decision to not obtain a permit and subsequent operations. If the operator wrongly failed to obtain a PSD pre-construction permit, it is that decision—rather than post-project operations based on the assumption that no permit was needed— that is sensibly subject to post-hoc, retrospective challenge. In other words, at least in the context of grandfathered, operating facilities that have changed ownership, it is reasonable to construe § 7475(a) in accordance with its plain text as being directed to the initial decision of whether or not to obtain a preconstruction PSD permit.
With this background, the Court turns to the specific claims in this litigation.
The United States seeks civil penalties commencing on March 15, 2004, based
The United States seeks civil penalties only from the Current Owners. The government contends that the Current Owners violated an independent, continuing obligation under § 7574(a)(4) to bring the Plant into compliance with BACT and operated the Plant after the projects contrary to the PA SIP, citing Sierra Club v. Dairyland Power Coop., 2010 WL 4294622 *12 (W.D.Wisc.2010). The Current Owners contend that they did not violate the PSD program and that any claims for civil penalties are time-barred.
A PSD violation occurs, at the latest, at the time of the construction project. Midwest Generation, 694 F.Supp.2d at 1009 ("PSD violation occurs at the time the alleged construction or modification begins"). The applicable statutory provision, 42 U.S.C. § 7475, is entitled "Preconstruction Requirements" and states that no major emitting facility "may be constructed" unless it satisfies the listed prerequisites. The majority rule is that a failure to obtain a PSD permit is a one-time violation and is not a continuing violation. As persuasively explained in New York v. Niagara Mohawk, 263 F.Supp.2d at 661:
See also Sierra Club v. Portland Gen. Elec. Co., 663 F.Supp.2d 983, 991-92 (D.Or.2009) (recognizing majority rule and collecting cases); United States v. Illinois Power Co., 245 F.Supp.2d 951, 957 (S.D.Ill. 2003) ("a violation of the Clean Air Act's preconstruction permit requirements . . . occurs at the time of the construction or modification and is not continuing in nature"); United States v. Southern Ind. Gas & Elec. Co., 2002 WL 1760752, *4 (S.D.Ind.2002) ("failure to obtain a preconstruction permit is a discrete violation that occurs at the time of construction"); United States v. Westvaco, 144 F.Supp.2d 439, 443 (D.Md.2001) ("preconstruction permit violations occur only at the time of the construction or modification of the emitting facility"); United States v. Murphy Oil USA, Inc., 143 F.Supp.2d 1054, 1083-84 (W.D.Wis.2001) ("the statute of limitations for a violation of the preconstruction permit requirements . . . begins to run at the time of construction and does not continue through the operational life of the modified source"); United States v. Brotech Corp., 2000 WL 1368023 *3 (E.D.Pa. 2000) ("[violations of the various requirements to obtain construction permits or plan approvals occur at the time of the construction, modification, or installation of the equipment or facility"); United States v. Campbell Soup Co., 1997 WL 258894, *2 (E.D.Cal.1997) ("the regulation cannot reasonably be construed to mean that building or altering a machine without a permit is a violation that continues as long as the machine still exists or is operated"). Two courts of appeals have concluded that failure to obtain a PSD permit is a one-time, non-continuing violation. See National
Dairyland Power, 2010 WL 4294622, represents a distinct minority view and did not involve a change in ownership, as occurred in this case. In essence, the Dairyland Power Court noted the several references to "operations" in § 7475(a) and concluded that: "although the obligations to apply best available control technology, conduct monitoring and make air quality demonstrations may be determined during the permitting process and included in a PSD permit, they are obligations independent of the permit requirement" such that Plaintiffs could bring a separate claim for the alleged failure to implement BACT. Id. at *5.
In summary, the Court concludes that the alleged PSD violations constitute singular, separate failures by the Former Owners to obtain pre-construction permits, rather than ongoing failures to comply with whatever hypothetical conditions might have been imposed during the PSD permitting process.
Plaintiffs contend that even if they are unable to recover civil penalties for the alleged PSD program violations, they are entitled to obtain injunctive relief against all Defendants. Specifically, Plaintiffs ask the Court to enjoin the Current Owners from operating the Plant except in accordance with the PSD permit regulations and to order all Defendants to remedy past violations by cooperating to install BACT at the Plant. Plaintiffs emphasize the breadth and flexibility of the court's equitable powers and contend that the relief sought is not impossible to implement.
The Current Owners contend that they cannot be held liable for injunctive relief because they did not violate the PSD program. The Court agrees. As explained above, the statutory prohibition in the PSD program, § 7475(a), is having commenced construction or modification without a permit. This alleged violation involved the Former Owners exclusively. As the Court explained in Niagara Mohawk, 263 F.Supp.2d at 668-69:
The same analysis applies to the Current Owners in this case. They could not possibly have applied for a PSD pre-construction permit for the 1991, 1994, 1995 or 1996 modification projects because they had no connection to the Plant or the Former Owners at that time. It is axiomatic that in order to obtain injunctive relief, a Plaintiff must first establish a successful claim on the merits. See, e.g., Ciba-Geigy Corp. v. Bolar Pharmaceutical Co., Inc., 747 F.2d 844, 850 (3d Cir.1984) (before issuing permanent injunction, "the court must determine if the plaintiff has actually succeeded on the merits"). Plaintiffs cannot succeed on a PSD claim against the Current Owners, as a matter of law. Accordingly, the PSD claims against the Current Owners, including the request for injunctive relief, will be dismissed with prejudice.
The more difficult question is whether this Court may award injunctive relief under the PSD program against the Former Owners. It is certainly clear from the statutory text of 28 U.S.C. § 2462 that the five-year limitations period applicable to civil penalties does not place a time limit
The Court is reluctant to conclude, as a broad principle, that it lacks authority to award injunctive relief under the PSD program, see id., and it need not do so to resolve this case. Plaintiffs must demonstrate not only that injunctive relief is within the Court's power in theory, but also that there is a plausible basis for granting such relief in this case. As explained by the United States Supreme Court, "[t]he grant of jurisdiction to ensure compliance with a statute hardly suggests an absolute duty to do so under any and all circumstances, and a federal judge sitting as chancellor is not mechanically obligated to grant an injunction for every violation of law." Weinberger v. Romero-Barcelo, 456 U.S. 305, 313, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982); Accord Natural Resources Defense Council v. Texaco Refining and Mktg., Inc., 906 F.2d 934 (3d Cir.1990). For example, in United States v. Price, 688 F.2d 204 (3d Cir.1982) (involving emergency powers under the Safe Drinking Water Act), which was cited by both sides, the Court of Appeals noted the broad and flexible equitable powers available to the courts, but nevertheless affirmed the district court's denial of injunctive relief that would have required current and former owners of a waste site to fund a public health study.
In this case, the facts alleged in the Complaints fall far short of those necessary to render a claim for injunctive relief plausible. Injunctive relief is a rare and extraordinary remedy which should be granted in only limited circumstances. See, e.g., Frank's GMC v. General Motors Corp., 847 F.2d 100, 102 (3d Cir.1988). The relief sought in this case against former owners is even more novel, and was rejected at the Rule 12(b)(6) stage in the Midwest Generation and Reliant Energy cases.
Primepoint, L.L.C. v. PrimePay, Inc., 401 Fed.Appx. 663, 664 (3d Cir.2010) (unpublished); accord United States v. SCM Corp., 667 F.Supp. 1110, 1128 (D.Md.1987) (denying request for injunctive relief under Clean Air Act because there was no danger of recurrent violations). For the reasons set forth above, the Court has determined that the Former Owners' alleged PSD violations constituted wholly-past failures to obtain pre-construction permits that did not constitute continuing violations.
Plaintiffs also contend that the Court should award injunctive relief to remedy the continuing harm caused by excess pollution, even if there was a one-time violation, citing Cinergy, 582 F.Supp.2d at 1055. The Court is not persuaded that Plaintiff has pleaded a plausible basis for similar relief in this case. In Cinergy, the power plant operator had been found in violation of the Clean Air Act by a jury and was seeking to limit post-trial discovery into the remedy. The court concluded that it had authority to "order a full and complete remedy for harms caused by a past violation" but noted that it was premature to make any such ruling. Id. at 1066. There had been no change in ownership, so the Cinergy court did not have to grapple with that complication. Moreover, the court's reference to continuing harm appears to be inconsistent with the Supreme Court's requirement of a continuing violation. In Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 109, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998), the Court held: "Because respondent alleges only past infractions of EPCRA, and not a continuing violation or the likelihood of a future violation, injunctive relief will not redress its injury." Id. at 109, 118 S.Ct. 1003 (emphasis added). Similarly, in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 66, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987), the Court explained that defendants are protected from Clean Water Act
Plaintiffs have failed to plead any facts to explain the nearly two decade delay in enforcement. Plaintiffs' theory of harm is undercut by the lengthy review and ultimate issuance of a Title V operating permit for the Plant, which is required to contain the "conditions as are necessary to assure compliance" with the Clean Air Act. 42 U.S.C. § 7661c(a). Any future "modification" project undertaken by the Current Owners will trigger a new statute of limitations and a new opportunity for the Plaintiffs to challenge it. Most notably, there is no risk of a PSD violation in the future because the Former Owners no longer own or operate the Plant. Accordingly, an injunction against the Former Owners is not warranted. The Court need not resolve the parties' remaining contentions regarding injunctive relief. In summary, the PSD claims will be dismissed in their entirety.
The Intervenors do not assert Title V claims against the Former Owners. Intervenors' Brief at 23 n. 7. It is unclear whether the United States continues to assert Title V claims against all Defendants. In any event, the Title V claims against the Former Owners are clearly without merit for the simple reason that they never owned or operated the Plant during the relevant time period. The Former Owners sold the Plant in 1999 and the Title V operating permit was not issued until 2004. United States' Complaint ¶¶ 61-62. Accordingly, the Title V claims against the Former Owners will be dismissed with prejudice.
The Title V claims against the Current Owners require more in-depth analysis. Unlike a PSD violation, a Title V operating permit violation would not be a discrete, one-time event. As explained in United States v. Westvaco, 144 F.Supp.2d at 443-44:
Accordingly, the Title V claims are not time-barred.
The gravamen of Plaintiffs' theory is that "Defendants are illegally operating without a Title V operating permit that imposes BACT limits on modified units." United States Brief at 28. Plaintiffs argue that by failing to acknowledge that the 1991, 1994, 1995 and 1996 projects triggered the PSD regulations, the Former Owners allegedly filed an incomplete Title V permit application, which "led to the issuance of a deficient Title V permit that lacked necessary pollution controls for the modified units." United States Brief at 30. In other words, Plaintiffs argue: (1) that Title V incorporates the PSD and BACT requirements; and (2) that Defendants do not have a valid Title V permit. Neither argument is persuasive.
The "incorporation" argument is contrary to the statutory text. 42 U.S.C. § 7661a(a) provides that it is unlawful "to violate any requirement of a permit issued under
Plaintiffs' contention that the Current Owners lack a valid Title V permit is equally unfounded. As an initial matter, the Complaints filed by all Plaintiffs expressly acknowledge that a Title V permit was, in fact, issued for the Plant. As pled, PADEP issued several operating permits for the emission sources at the Plant, the most recent of which is Title V permit No. 32-00055, issued in January 2004, with an amendment effective on December 1, 2004. PADEP/New York Complaint ¶ 23; New Jersey Complaint ¶ 22. Thus, any suggestion that Defendants did not have a Title V operating permit is flatly wrong.
Plaintiffs' more nuanced argument is that the Title V permit for the Plant is null and void because it was based on a flawed application. According to Plaintiffs, the Former Owners failed to disclose that they should have obtained PSD permits for the 1991, 1994, 1995 and 1996 projects, which would have resulted in installation of BACT. But this argument, too, is unpersuasive. Because the Former Owners had not applied for a PSD permit, the BACT standards which may have been triggered during the PSD approval process were not determined or implemented. The Former Owners did not apply for a PSD Permit and the process by which operating requirements such as BACT would have been established was never triggered. Put another way, there is no way that the Current Owners could have known that the Title V application submitted by the Former Owners was flawed, because no PSD violation was ever established. A facially valid Title V permit was duly issued by PADEP which "incorporate[d] into a single document all of the Clean Air Act requirements governing a facility." Romoland Sch. Dist., 548 F.3d at 742. The Current Owners were entitled to rely on the facial validity of the Title V permit. See Otter Tail, 615 F.3d at 1022 ("to allow plaintiffs to raise issues resolved during the permitting process long after that process is complete would upset the reasonable expectations of facility operators and undermine the significant investment of regulatory resources made by state permitting agencies.") In United States v. AM General Corp., 34 F.3d 472, 475 (7th
Similar Title V claims were rejected in Otter Tail and Midwest Generation. In Midwest Generation, 781 F.Supp.2d at 690-91, the court explained:
Accord Otter Tail, 615 F.3d at 1017 (BACT limits may be incorporated into a facility's construction plans and PSD permits, but do not establish an ongoing duty to apply BACT independent of the PSD permitting process). This Court agrees with the reasoning in those cases.
Moreover, this Court harbors substantial subject-matter jurisdiction concerns as to its authority to decide Plaintiffs' challenge to the permit application, because the Clean Air Act provides that such challenges must be presented to EPA and the Court of Appeals. See Dairyland Power, 2010 WL at 4294622 *17:
In summary, the Clean Air Act does not incorporate PSD requirements into Title V permits, but instead carefully distinguishes violations of permits issued under the Title V "subchapter" from violations of preconstruction permits obtained under the PSD program. A Title V permit application was, in fact, submitted and a facially valid Title V permit was, in fact, duly issued in 2004 for operation of the Plant. The Current
In addition to the federal Clean Air Act claims, PADEP and New York allege violations of the Pennsylvania Air Pollution and Control Act ("APCA") and the Pennsylvania SIP, and common law public nuisance. These claims were not thoroughly developed (see Intervenors' Brief at pp. 43-44), and they essentially track the federal claims.
The APCA, 35 P.S. § 4002, declares Pennsylvania's policy "to protect the air resources of the Commonwealth to the degree necessary for the (i) protection of public health, safety and well-being of its citizens; (ii) prevention of injury to plant and animal life and to property; (iii) protection of the comfort and convenience of the public and the protection of the recreational resources of the Commonwealth; (iv) development, attraction and expansion of industry, commerce and agriculture; and (v) implementation of the provisions of the Clean Air Act in the Commonwealth." Section 4006(c) provides that PADEP "is authorized to require that new sources demonstrate in the plan approval application that the source will reduce or control emissions of air pollutants, including hazardous air pollutants, by using the best available technology." The APCA implementing regulations, 25 Pa.Code §§ 121-141, also constitute the PA SIP and are promulgated pursuant to both the APCA and the federal Clean Air Act. In effect, the state and federal enforcement efforts are parallel. As explained in Commonwealth of Pennsylvania v. Environmental Protection Agency, 500 F.2d 246, 262 (3d Cir.1974):
See also PADEP v. Pennsylvania Power Co., 490 Pa. 399, 416 A.2d 995, 998 (1980) (describing adoption of PA SIP pursuant to federal-state regulatory partnership and dismissing constitutional challenge to S02 standards).
The PA SIP addresses construction permits separately from operating permits. 25 Pa.Code § 127.11 states, in relevant part, "a person may not cause or permit the
Plaintiffs argue that this provision required the Former Owners to obtain an operating permit after the projects at issue. The fundamental flaw in this argument, however, is that the Former Owners did apply for, and PADEP did issue, an operating permit for the Plant.
Plaintiffs also point to 25 Pa.Code § 127.445, which provides that an operating permit may be issued to an existing and operating source that is out of compliance. However, this provision does not create a viable avenue for this post-hoc challenge to projects from the early 1990s because the predicate assumption—that the operating source is out of compliance— has never been proven. To the contrary, the Current Owners have possessed a facially valid operating permit since 2004 and were not on notice that the Former Owners had allegedly failed to obtain a preconstruction PSD permit.
Plaintiffs contend that the Pennsylvania SIP imposed ongoing PSD emissions limitations on the Plant. Three cases have concluded that the relevant state implementation plan contained language stating that the PSD requirements were ongoing. See Nat'l Parks 6th Cir., 480 F.3d at 419 (under Tennessee SIP, obligation to obtain construction permit is ongoing, even post-construction). The Tennessee SIP provides, in relevant part: "In the case where a source or modification was constructed without first obtaining a construction permit,
Under the Pennsylvania SIP, there is no such integration of construction and operating permits. In that regard, the Pennsylvania SIP is more similar to the state SIPs in which courts have held that no incorporation was intended. See Nat'l Parks 11th Cir., 502 F.3d at 1325 (distinguishing Tennessee SIP and finding no ongoing duty to apply BACT where Alabama SIP "did not provide a way for a party who had undertaken a modification to obtain . . . a determination [of BACT] outside the preconstruction permitting process"); Otter Tail, 615 F.3d at 1017 (South Dakota SIP imposed no ongoing duty to apply BACT and was distinguishable from Tennessee SIP); U.S. v. Midwest Generation, 781 F.Supp.2d 677, 682-84 (N.D.Ill.2011) (Illinois SIP does not bar operation of plant without construction permit) (emphasis in original). In summary, the Court concludes that the claims under the ACPA and Pennsylvania SIP are duplicative of the federal Clean Air Act claims and must be dismissed.
The public nuisance claim is also without merit. Pennsylvania has enacted a "public nuisance" statute, 35 P.S. § 4013, which states:
In American Electric Power Co. v. Connecticut, ___ U.S. ___, 131 S.Ct. 2527, 180 L.Ed.2d 435 (2011), the United States Supreme Court held that the Clean Air Act preempted federal common law nuisance claims as a means to curb emissions from power plants, but did not rule on the availability of a state law nuisance claim. The Supreme Court noted that the issue would turn "on the preemptive effect of the federal Act." Id. at 2540.
In North Carolina, ex rel. Cooper v. Tennessee Valley Authority, 615 F.3d 291, 303 (4th Cir.2010), the Court of Appeals for the Fourth Circuit rejected a very similar state law public nuisance claim against power plants. The Court held that public nuisance claims are preempted because they threaten to scuttle the comprehensive regulatory and permitting regime that has developed over several decades. The Court reasoned, in pertinent part:
Id. at 303 (citations omitted).
In this case, it is clear that both the federal Clean Air Act and the Pennsylvania Air Pollution Control Act represent comprehensive statutory and regulatory schemes that establish the standards by which grandfathered power plants must reduce their emissions of air pollutants. Pennsylvania has a statutorily defined role through the SIP and permitting process. Accordingly, common law public nuisance claims are preempted and will be dismissed.
If a civil rights complaint is subject to Rule 12(b)(6) dismissal, a district court must permit a curative amendment unless such an amendment would be inequitable or futile. Alston v. Parker, 363 F.3d 229, 235 (3d Cir.2004); accord Grayson v. Mayview State Hosp., 293 F.3d 103 (3d Cir. 2002). A district court must provide the plaintiff with this opportunity even if the plaintiff does not seek leave to amend. Id. In non-civil rights cases, however, a plaintiff must seek leave to amend and submit a draft amended complaint. Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 252-53 (3d Cir.2007). Plaintiffs have not sought leave to amend in this case and it appears to the Court that such an effort would be futile.
For the reasons set forth above, the motions to dismiss will be
AND NOW, this 12th day of October, 2011, in accordance with the reasoning in the foregoing Memorandum Opinion, it is hereby
