Summary
finding the PSD provisions contemplate “not only certain preconstruction obligations but also subsequent operation after modification” and reasoning that “ Westvaco,Murphy Oil, and Coastal Lumber are premised on an oversimplified reading of the CAA provisions”
Summary of this case from Coalition for Clean Air v. VWR Intern., LLCOpinion
Case No. 2:99-CV-1181
January 17, 2003
OPINION AND ORDER
This matter is before the Court for consideration of the Motion for Partial Judgment on the Pleadings (Doc. #123) of Defendant Ohio Edison Company. For the reasons that follow, the motion is denied.
I.
Plaintiffs, the United States of America together with the States of Connecticut, New Jersey and New York ["Plaintiffs"], bring this action pursuant to Sections 113 and 167 of the Clean Air Act ["CAA"] 42 U.S.C. § 7413 and 7477 seeking injunctive relief and civil penalties for alleged violations at the W.H. Sammis Station, a coal fired electric generating plant located in Jefferson County, Ohio. The Sammis plant is owned by Pennsylvania Power Company, a wholly owned subsidiary of the Defendant Ohio Edison. The Court entertains this action under 28 U.S.C. § 1331.
Plaintiffs claim that thirty-four plant modifications undertaken by Ohio Edison violate several provisions of the CAA, to wit: the Prevention of Significant Deterioration ["PSD"] provisions, 42 U.S.C. § 7470-92; the New Source Review ["NSR"] provisions, 42 U.S.C. § 7501-7515; the New Source Performance Standards ["NSPS"], 42 U.S.C. § 7411; and the federally approved and enforceable Ohio State Implementation Plan ["SIP"]. As a result, Plaintiffs claim that operation of the Sammis plant has resulted in "massive amounts of sulfur dioxide, nitrogen oxides, and particulate matter [into] the atmosphere aggravating air pollution locally and far downwind from [the Sammis] plant." ( United States' Amended Complaint at ¶ 2). It is undisputed that thirty-three of the thirty-four projects at issue occurred more than five years prior to the filing of complaints in this case.
II.
Defendant Ohio Edison moves for Judgment on the Pleadings on Plaintiffs' claims for civil penalties regarding Defendant's failure to obtain preconstruction permits on thirty-three of the thirty-four projects undertaken at the Sammis Plant.
Fed.R.Civ.P. 12(c) provides that, "after the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." Judgment may be granted under Rule 12(c) where the movants clearly establish that no material issue of fact remains to be resolved and that they are entitled to judgment as a matter of law. Beal v. Missouri Pacific R.R., 312 U.S. 45 (1941); 5 C. Wright A. Miller, Federal Practice and Procedure § 1368 at 520. For purposes of this motion, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true. Given this standard, the motion may be granted only if the moving party is clearly entitled to judgment. Southern Ohio Bank v. Merrill Lynch, Pierce, Fenner Smith, Inc., 479 F.2d 478 (6th Cir. 1973); 5 Wright Miller § 1368 at 520. The rule itself provides for a conversion procedure whereby the motion for judgment on the pleadings may be deemed a Rule 56 summary judgment motion where matters outside the pleading are presented to and not excluded by the Court; it is within the Court's discretion, however, whether to accept extraneous matters on a Rule 12(c) motion and treat it as one for summary judgment. See e.g., A.S. Abell Company v. Baltimore Typographical Union No. 12, 338 F.2d 190 (4th Cir. 1964); 5 Wright Miller § 1371 at 705. For purposes of the instant motion, matters outside the pleadings have not been presented to and will not be considered by the Court. Consequently, the standard governing motions under Rule 12(c) is applicable.
III.
Defendant contends that Plaintiffs cannot seek civil penalties for Defendant's failure to obtain preconstruction permits on thirty-three of the thirty-four projects at issue in this case because more than five years has passed since the time the permits should have allegedly been acquired. The applicable statute of limitations is found at 28 U.S.C. § 2462, which provides:
For purposes of this motion, the Court assumes as true that the projects at issue were "major modifications" under the CAA that would trigger the permit requirements.
Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not he entertained unless commenced within five years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon.
Plaintiffs agree that § 2462 is the applicable statute of limitations, but Plaintiffs disagree with the Defendant's application of the statute to the alleged CAA violations. Before addressing the proper application of the statute of limitations, the Court first considers the nature of the alleged CAA violations.
As stated supra, the United States and the States of Connecticut, New Jersey and New York, claim that Defendant violated the Prevention of Significant Deterioration ["PSD"] provisions of the CAA, 42 U.S.C. § 7470-92, the New Source Review ["NSR"] provisions of the CAA, 42 U.S.C. § 7501-15, the New Source Performance Standards ["NSPS"], 42 U.S.C. § 7411, and the federally approved and enforceable Ohio State Implementation Plan ["SIP"]. These provisions apply to construction of new emission sources as well as to "major modifications" of existing sources. Plaintiffs particularly allege that the Defendant violated 42 U.S.C. § 7475 (a) and 7477 by "undertaking such major modifications and operating its facility after the modifications without obtaining a PSD permit as required by 40 C.F.R. § 52.21(j)." ( United States' Amended Complaint at ¶ 70; New York and Connecticut's Complaint at ¶¶ 1, 3 and New Jersey v Complaint at ¶¶ 1, 3). The Plaintiffs further allege that the Defendant violated the PSD, NSR and NSPS provisions of the CAA and the Ohio SIP by "undertaking such major modifications and operating its facility after the modifications without obtaining a Nonattainment NSR permit. . . ." ( United States' Amended Complaint at ¶ 75; Id.);
A "modification" is defined as "any physical change in or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted." 42 U.S.C. § 7411(a)(4).
Defendant contends that with respect to the PSD permit requirement, under 42 U.S.C. § 7475 (a), "the act of construction without obtaining a preconstruction permit — not subsequently operating the `modified' unit constitutes [a] violation" of 42 U.S.C. § 7475 (a). ( Defendant's Motion for Partial Judgment on the Pleadings at 6) (emphasis omitted). According to the Defendant, the requirement to obtain a preconstruction permit can be violated only once — at the time the facility commences construction of a major modification without a permit. Consequently, Defendant argues that "where, as here, an enforcement action for civil penalties is brought more than five years after construction commenced, it is time-barred." (Id. at 7). Defendant relies on three federal court decisions in support of this assertion.
Defendant does not dispute that the statute of limitations does not bar Plaintiffs' request for injunctivc relief with respect to the alleged PSD violations.
In United States v. Westvaco Corp., 144 F. Supp.2d 439 (D. Md. 2001),, the United States sought civil penalties under the CAA the failure of the Defendant, owner and operator of a kraft pulp and paper mill, to obtain preconstruction permits before undertaking four construction projects during the time period of 1981 to at least 1998. The United States filed suit in August 2000. Defendant Westvaco argued that the statute of limitations, 28 U.S.C. § 2462, precluded the Government from bringing claims for alleged violations occurring before August 1995. The Government argued that the continuing violations doctrine operated to toll the limitations period.
As explained by the court, the mill processes wood into pulp and then further processes the pulp into various grades of paper. The operation allegedly causes pollution having a negative effect on the environment and the health of human beings. The projects which allegedly violated the CAA included, a digester expansion program from 1981 to 1985, a mill-wide expansion program from 1986 to 1991, a modification to the brown stock washer system in 1988, and changes to various boilers and the brown stock washer systems, at unspecified times. United States v. Westvaeo Corp., 144 F. Supp.2d at 441.
The court held that the statute of limitations barred claims based on preconstruction permit violations where construction was completed more than five years prior to the commencement of the lawsuit. Id. at 444. In reaching this decision, the court rejected the Government's argument that each day of operation at the paper mill constituted a violation of the CAA or a continuing violation of the Defendant's failure to obtain the required preconstruction permits for the modifications at issue. The court noted that Counts 1 and 2 of the Amended Complaint simply alleged that Defendant violated the federal PSD regulations by failing to obtain preconstruction permits. The court cited 42 U.S.C. § 7475 (a) and concluded that the statute "clearly and unambiguously applies to the construction — not the operation — of major stationary sources." Id. (emphasis in original). The court concluded that because the alleged violations of the preconstruction permit requirement occurred outside the five year limitations period, the Government was barred from seeking civil penalties. Id. at 445.
The statute provides:
(a) Major emitting facilities on which construction is commenced
No major emitting facility on which construction is commenced after August 7, 1977, may be constructed in any area to which this part applies unless —
(1) a permit has been issued for such proposed facility in accordance with this part setting forth emission limitations for such facility which conform to the requirements of this part;
(2) the proposed permit has been subject to a review in accordance with this section, the required analysis has been conducted in accordance with regulations promulgated by the Administrator, and a public hearing has been held with opportunity for interested persons including representatives of the Administrator to appear and submit written or oral presentations on the air quality impact of such source, alternatives thereto, control technology requirements, and other appropriate considerations;
(3) the owner or operator of such facility demonstrates, as required pursuant to section 7410(j) of this title, that emissions from construction or operation of such facility will not cause, or contribute to, air pollution in excess of any (A) maximum allowable increase or maximum allowable concentration for any pollutant in any area to which this part applies more than one time per year, (B) national ambient air quality standard in any air quality control region, or (C) any other applicable emission standard or standard of performance under this chapter;
(4) the proposed facility is subject to the best available control technology for each pollutant subject to regulation under this chapter emitted from, or which results from, such facility;
(5) the provisions of subsection (d) of this section with respect to protection of class I areas have been complied with for such facility;
(6) there has been an analysis of any air quality impacts projected from the area as a result of growth associated with such facility;
(7) the person who owns or operates, or proposes to own or operate a major emitting facility for which a permit is required under this part agrees to conduct such monitoring as may be necessary to determine the effect which emissions from any such facility may have, or is having, on air quality in any area which may be affected by emissions from such source; and
(8) in the case of a source which proposes to construct in a class III area, emissions from which would cause or contribute to exceeding the maximum allowable increments applicable in a class II area and where no standard under section 7411 of this title has been promulgated subsequent to August 7, 1977, for such source category, the Administrator has approved the determination of best available control technology as set forth in the permit.42 U.S.C. § 7475 (a).
Defendant also relies on the decision in United States v. Murphy Oil USA, Inc., 143 F. Supp.2d 1054 (W.D. Wisc. 2001). In that case, the United States sued a Defendant oil refinery operator for alleged violations of the CAA as well as the Clean Water Act, 33 U.S.C. § 1251-1387, Subchapter III of the Resource Conservation and Recovery Act, 42 U.S.C. § 6921-6939e, and the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 6991-6991h. With respect to the CAA claims, the Government alleged that the Defendant made various major modifications to its facilities without first obtaining preconstruction permits. The Defendant moved for partial summary judgment to the extent the Government sought civil remedies on the claims on the basis that such claims were barred by the five year statute of limitations at 28 U.S.C. § 2462.
The court granted Defendant's motion and observed that the CAA provisions separate requirements for preconstruction permits from operation permits; 42 U.S.C. § 7475 (a) addresses preconstruction permits and § 7661 addresses operation permits. The Court reasoned that the claims were time-barred since the Government brought suit more than five years after the permits should have been obtained. The court stated: "[T]he statute of limitations for a violation of the preconstruction permit requirements under 42 U.S.C. § 7475 begins to run at the time of construction and does not continue through the operational life of the modified source." Id. at 1083-84. The court also concluded that the continuing violations doctrine did not apply since "nothing in the statute creates a continuing liability for a facility's failure to obtain a preconstruction permit. . . ." Id. at 1083.
The same reasoning was applied in the final case on which Defendant herein relies, in United States v. Coastal Lumber Co., No. 4:01cv238-SPM, slip op. (D. Fla. December 23, 2001), the United States sought civil penalties and injunctive relief for Defendant Coastal Lumber's alleged violations of the CAA and state law. Coastal Lumber constructed a plywood mill in 1980 and made certain improvements to the mill in 1988 and 1994. Coastal Lumber did not obtain a preconstruction permits for any of the projects nor did it outfit the mill with "best available control technology," ("BACT"), as required by 42 U.S.C. § 7475. The United States sought relief for the failure to obtain preconstruction permits as well as the failure to conduct emissions sampling as requested by the EPA in 2001. Coastal Lumber moved to dismiss the claims for civil penalties for preconstruction permit violations on the basis that they were time barred under 28 U.S.C. § 2462.
The court dismissed the civil penalty claims, holding that the failure to obtain a preconstruction permit is "a discrete violation that occurs at the time of construction." Id. at *4. The court cited the decision in Murphy Oil, supra, for the proposition that "the failure to obtain an operating permit is a continuing violation for cacti day of operation without the permit" but the failure to obtain a preconstruction permit is not. Id. Thus, the court concluded that "because the violations alleged . . . concern preconstruction permits, the violations are not continuing and do not extend the limitations period." Id. at *5. The court observed, however, that the Government could still obtain injunctive relief for the alleged violations because the statute of limitations bars only claims for civil penalties, not equitable relief. Id.
In reaching its decision, the Coastal Lumber court cited the decision of the undersigned in United States v. American Electric Power Service Corp., 137 F. Supp.2d 1060 (S.D. Ohio 2001) as a contrary opinion. The Government in this case argues that if this Court were to apply the reasoning in the cases relied upon by Defendant, the result would be contrary to the opinions earlier rendered in the companion cases of United States v. Am. Elec. Power Service Corp., 2:99-CV-1182 and 2:99-CV-1250.
The Defendant does not address the impact of this Court's decision on the instant action.
In United States v. American Electric Power Service Corp., 137 F. Supp.2d 1060 (S.D. Ohio 2001), this Court considered Defendant's motion to dismiss claims brought by certain citizens groups, under 42 U.S.C. § 7604, seeking civil penalties and injunctive relief for Defendant's alleged violations of the CAA at several coal burning power plants. In that case, the citizens allege that Defendants made modifications to various plants without first obtaining preconstruction permits, without installing the BACT or complying with the lowest achievable emissions rate ["LAER"], and that the plants operate in violation of BACT and LAER standards. The Defendants moved to dismiss the citizens' claims for several reasons. First, the Defendants argued that the citizen suit provision, 42 U.S.C. § 7604 (a)(3), allowed the citizens to sue for Defendant's construction of the plant in violation of the CAA but not its subsequent operation of the plant. This Court rejected the argument made and held that "such a conclusion is not only contrary to the statute [§ 7604(a)(3) ] but it is also illogical" because "operation of a facility in violation of any condition required by a permit is a violation of the statute." Id. at 1066. This Court further held that the statute of limitations, 28 U.S.C. § 2462, did not bar the citizens' claims for civil penalties but that it did "limit the time to five years in which civil penalties may be sought for days in which the Defendants allegedly violated the CAA." Id. at 1067.
The citizens groups are comprised of: Ohio Citizen Action, Hoosier Environmental Council, Citizens Action Coalition of Indiana, Inc., Valley Watch, Inc., Ohio Valley Environmental Coalition, West Virginia Environmental Council, Clean Air Council, United States Public Interest Research Group, Izaak Walton League of America, National Wildlife Federation, Indiana Wildlife Federation, League of Ohio Sportsmen, Sierra Club and the Natural Resources Defense Council, Inc.
The statute provides:
[A]ny person may commence a civil action on his own behalf —
(3) against any person who proposes to construct or constructs any new or modified major emitting facility without a permit required under part C of subchapter I of this chapter (relating to significant deterioration of air quality) or part D of subchapter I of this chapter (relating to nonattainment) or who is alleged to have violated (if there is evidence that the alleged violation has been repeated) or to be in violation of any condition of such permit.42 U.S.C. § 7604 (a)(3).
In the case at bar, the Government relies heavily on the foregoing opinion in opposing the Defendant's Motion for Partial Judgment on the Pleadings. The Government further argues that the purpose of the PSD preconstruction permit requirement affects the timing, but not the substance, of Defendant's obligations under the CAA. In particular, the Government points out that while § 7475(a)(1) provides that no major emitting facility may be constructed unless "a permit has been issued for such proposed facility in accordance with this part setting forth emission limitations for such facility . . ." the preconstruction provision also regulates the source's operation. In particular, § 7475(a)(7) requires a program for monitoring the source's emissions from operation and § 7475(a)(4) requires that the "facility is subject to the best available control technology for each pollutant subject to regulation under this chapter emitted from, or which results from, such facility." Thus, the Government argues that the PSD permitting requirements contained at § 7475 control construction and operation of the facility.
This Court finds the Government's argument persuasive. Further, this Court is not inclined to disturb its earlier decision in United States v. American Electric Power Service Corp., 137 F. Supp.2d 1060 (S.D. Ohio 2001). The Court adheres to its decision in that case 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." Id. at 1066. In the Court's view, the statute itself provides for the requirement of a preconstruction permit as well as ongoing operation in compliance with CAA standards for sources "for which a permit is required," not simply those sources for which a permit has been granted, as Defendant herein argues. See 42 U.S.C. § 7475 (a)(7).
The Court is not persuaded that the three decisions cited by Defendant mandate a contrary result. In the Court's view, the Westvaco, Murphy Oil, and Coastal Lumber decisions are premised on an oversimplified reading of the CAA provisions. As the court in United States v. Marine Shale Processors, 81 F.3d 1329, 1355-56 (5th Cir. 1996) stated, "[t]he CAA statutory scheme contemplates at least two different types of air permits unhappily named `preconstruction permits' and `operating permits,' with confusion easily resulting from the fact that preconstruction permits often include limits upon a source's operations."
In Marine Shale Processors, the United States sued a hazardous waste treatment facility alleging violations of the CAA, the CWA, the RCRA. With respect to the CAA claim, the United States alleged that the Defendant operated several minor emission sources without a permit. Among the issues considered by the court was a statute of limitations defense to the claim raised. The court concluded that the Defendant's argument based on § 2462 was "frivolous" because although § 2462 may limit the amount of civil penalty recoverable, the Defendant was liable for each day it operated in violation of the permit requirement. Id. at 1356-57. The court's decision relied on the premise that the "preconstruction permits often include limits on a source's operations." Id. at 1355.
This Court is of the same view, i.e., that the PSD provisions contemplate not only certain preconstruction obligations but also subsequent operation after modification. Thus, this Court concludes that Plaintiffs' claims for civil penalties under the PSD provisions of the CAA are not barred by the statute of limitations. The Court notes that the Plaintiffs represent that they will not, however, seek civil penalties from Defendant for days of violation more than five years prior to filing of their complaints. This result is consistent with the Court's decision in United States v. American Electric Power Service Corp., supra.
As a final matter, the Court notes that this decision is premised on the assumption that the projects at issue are indeed "modifications" that would trigger the PSD provisions. This issue will be resolved on the merits at a later time. Consequently, if Ohio Edison uitimately prevails in its position that the projects were not "modifications" or that they fall under the exception of. "routine maintenance, repair or replacement" the Court's decision on the issue at bar is of no moment. In short, the Plaintiffs' claims on these issues only survive if the Plaintiffs prevail on their assertion that the projects were modifications triggering PSI) requirements.
IV.
In light of the foregoing, and subject to the caveat noted above, the Defendant's Motion for Partial Judgment on the Pleadings ( Doc. #123) is DENIED.