781 F. Supp. 2d 677
N.D. Ill.2011Background
- This CAA action by the United States and Illinois against Midwest Generation and affiliates concerns PSD, opacity, and Title V violations at coal-fired plants.
- An earlier March 9, 2010 ruling dismissed most PSD counts: a source’s preconstruction violation occurs at construction time, not by later operation; penalties were time-barred.
- The Amended Complaint adds ComEd (former owner) and EME, asserting new PSD theories and successor liability through an asset-purchase agreement.
- Plaintiffs allege ComEd unlawfully modified units before 1999 without PSD permits and that EME/Midwest assumed environmental liabilities under the Agreement.
- The court granted ComEd’s dismissal, and analyzed three new theories: direct Illinois-law PSD liability, ComEd injunctive relief, and successor liability, plus Title V challenges.
- The court also addressed statute of limitations/equitable tolling for the Citizen Groups’ penalties claim, determining accrual and tolling issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 415 ILCS 5/9.1(d) creates an independent PSD violation distinct from the CAA. | Plaintiffs (the United States/Illinois) claim 9.1(d)(2) prohibits operation without a permit. | Midwest/EME contend 9.1(d) does not broaden PSD beyond the CAA and waives new claims. | Waived/insufficient to state a direct 9.1(d) PSD claim; interpretation conflicts with prior ruling and fails to allege operation without permit. |
| Whether ComEd can be held liable for PSD violations via injunctive relief for actions prior to sale. | Plaintiffs seek injunctive relief to remedy past PSD violations by ComEd. | ComEd cannot be ordered to modify facilities it no longer owns; equitable relief against former owner is improper. | Injunctive relief against ComEd is granted? No, the court granted ComEd's dismissal; Plaintiffs cannot compel actions on property they no longer own. |
| Whether the asset-purchase agreement transfers CAA liabilities (successor liability) to Midwest Generation/EME. | Plaintiffs rely on Agreement §2.3 to argue assumed liabilities include pre-closing non-compliance. | Agreement language limits assumption to liabilities of the Assets for compliance with Environmental Laws, not personal pre-closing liabilities. | Successor-liability theory fails; Agreement does not transfer pre-closing ComEd liabilities and CAA enforcement targets the violator. |
| Whether the Citizen Groups’ PSD civil-penalties claim is time-barred and whether equitable tolling applies. | Citizen Groups argue discovery/tolling extended accrual, wrapping PSD penalties within five years. | PSD violation accrual in 2000; discovery rule does not apply under §2462; tolling requires extraordinary circumstances. | Claim time-barred; equitable tolling not sufficiently shown to save the PSD penalties claim. |
Key Cases Cited
- North Shore Gas Co. v. Salomon, Inc., 152 F.3d 642 (7th Cir. 1998) (successor liability under CERCLA permitted; context of remedial conduct)
- United States v. Apex Oil Co., Inc., 579 F.3d 734 (7th Cir. 2009) (equitable relief can involve payment; injunctive relief considerations in enforcement)
- 3M Co. v. Browner, 3 F.3d 1460 (D.C. Cir. 1994) (§ 2462 five-year accrual; discovery rule not applied to penalty actions)
- Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989 (7th Cir. 2007) (contract interpretation; plain meaning governs)
- United States v. AM Gen. Corp., 34 F.3d 472 (7th Cir. 1994) (CAA enforcement; quasi-criminal nature; limits of relief)
- Graham v. Med. Mut. of Ohio, 130 F.3d 293 (7th Cir. 1997) (mandatory injunctions sparingly issued)