Sierra Club v. Otter Tail Power Co.Sierra Club v. Otter Tail Power Co.
Sierra Club brought this Clean Air Act (CAA) citizen suit against Otter Tail Power Company, MDU Resources Group, and Northwestern Energy, who own and operate the Big Stone Generating Station, a coal fired power plant near the border between South Dakota and Minnesota. Sierra Club alleged that Otter Tail violated the CAA by failing to obtain permits for a series of modifications to the plant and by exceeding applicable emission limits. The district court
1
granted Otter Tail’s motion
I.
Since the factual allegations underlying this controversy are tied into the CAA and its related regulations, we begin with an examination of the applicable statutory and regulatory framework. Then we will turn to the factual and procedural background of the case.
A.
Congress enacted the Clean Air Act Amendments of 1970 seeking “ ‘to guarantee the prompt attainment and maintenance of specified air quality standards.’ ”
Alaska Dep’t of Envtl. Conservation v. EPA,
A central part of the CAA’s regulatory scheme was the New Source Performance Standards (NSPS) program, which required EPA to develop “technology-based performance standards” designed to limit emissions from major new sources of pollution.
Chevron U.S.A., Inc. v. Natural Res. Defense Council, Inc.,
The Supreme Court has pointed out that the NSPS program “did too little to ‘achieve the ambitious goals of the 1970 amendments.’ ”
Duke Energy,
Under the PSD program, “[n]o major emitting facility ... may be constructed” or modified unless it meets certain preconditions.
The PSD program is primarily implemented by the states through “state implementation plans” (SIPs).
Id.
§ 7471. States have broad discretion in designing their SIPs, but the plans must include certain federal standards and are subject
In 1990 Congress again amended the CAA to require each covered facility to obtain a comprehensive operating permit setting forth all CAA standards applicable to that facility.
See
B.
The Big Stone Generating Station is a 450 megawatt coal fired power plant located in Big Stone City, South Dakota. 3 Otter Tail Power Company operates the plant, which it jointly owns with MDU Resources Group and Northwestern Energy (the three appellees will be collectively referred to as Otter Tail). Big Stone has undergone various physical and operational modifications since it began operating in 1975. Sierra Club alleges that three of those modifications triggered PSD and NSPS obligations which Otter Tail has violated.
The first modification at issue was a change in the primary fuel used at Big Stone. The plant was originally designed to burn lignite coal, but in 1995 it switched to subbituminous coal. Sierra Club claims that this significantly increased Big Stone’s emissions of nitrogen oxides and particulate matter, meaning that Otter Tail was required to obtain a PSD permit before making the change. Otter Tail did not seek one.
In 1998 Big Stone’s boiler was modified to increase the surface area of its primary superheater. Sierra Club claims that this modification increased the plant’s emission of sulfur dioxide and nitrogen oxides and that Otter Tail was accordingly obligated to obtain a PSD permit for it. Otter Tail did not apply for such a permit.
Finally, in 2001 Big Stone underwent physical and operational modifications to allow it to supply steam to a nearby ethanol plant. Otter Tail applied to the South Dakota Department of Environment and Natural Resources (DENR) — the agency responsible for administering South Dakota’s Title V program-for an amendment to its Title V permit to allow the ethanol plant project. DENR invited public comment on the permit application, but Sierra Club did not participate in the permitting process. After evaluating the proposed project and concluding that it did not involve modifications that triggered NSPS or PSD requirements, DENR approved the amended permit. Sierra Club now alleges that the ethanol plant project did trigger NSPS and PSD obligations.
Otter Tail moved to dismiss, arguing that Sierra Club’s PSD claims were untimely and that the NSPS claim was an impermissible collateral attack on Otter Tail’s operating permit. The district court granted the motion. It interpreted the CAA’s PSD provisions as imposing upon operators only a one time obligation to obtain a permit before construction or modification of a facility, as opposed to imposing ongoing conditions on its operation. It reasoned that any violation of these provisions would have thus occurred when modifications were commenced. Since the last modification was begun in 2001, Sierra Club’s PSD civil penalty claims were barred by the five year statute of limitations in
The district court dismissed the NSPS claim for lack of subject matter jurisdiction. Because that claim essentially attacks the terms of Otter Tail’s amended Title V permit rather than Otter Tail’s compliance with the permit, the district court concluded that Sierra Club should have raised the NSPS issue in administrative proceedings during the permitting process. Since judicial review of issues that may be raised through that process is vested exclusively in the courts of appeals, the district court determined that it lacked jurisdiction over the NSPS claim.
The district court denied Sierra Club’s subsequent motion for reconsideration under
We address each of these three arguments in turn. In doing so, we accept as true the complaint’s factual allegations and review de novo the district court’s legal conclusions.
Braden,
II.
We first consider whether Sierra Club timely asserted its claims for civil penalties under the Clean Air Act’s PSD provisions. The CAA itself establishes no limitation period for the commencement of citizen suits. The parties agree, however, that the general federal statute of limitations at
A claim first accrues “as soon as the right to institute and maintain a suit arises.”
Konecny v. United States,
Since the last of the modifications at issue here were done in 2001 and Sierra Club did not file suit until 2008, its civil penalty claims are barred by
We are thus presented with a pure question of statutory interpretation. Do the CAA and related regulations prohibit only construction or modification of a facility without a PSD permit and BACT, or do they impose ongoing operational requirements? If they apply only to construction and modification, Sierra Club’s PSD civil penalty claims are time barred. If they impose operational requirements, however, the PSD claims would still be viable. This is a question of first impression in our circuit. Two other courts of appeals have addressed it and have reached different conclusions.
Compare Nat’l Parks 6th Cir.,
We begin our inquiry with the language of the statute. As already indicated, the operative statutory provision states that “[n]o major emitting facility ... may be
constructed
” without meeting the PSD requirements.
The language of the CAA’s citizen suit provision is similarly limited to construction or modification, for it authorizes suit “against any person who
proposes to construct or constructs
” a facility without a permit.
Our interpretation of
Sierra Club contends, however, that several regulatory provisions establish an ongoing duty for a polluting facility to obtain a PSD permit and to employ BACT as conditions of operation. It points first to a section of South Dakota’s SIP which provides that a “person may not construct, install, modify, revise, or operate any source or unit ... until the applicable preconstruction permit or Part 70 operating permit has been issued.... ” S.D. Admin. R. 74:36:05:02. Sierra Club argues that this rule prohibits operation without a permit, but a close reading shows that interpretation is incorrect.
Rule 74:36:05:02 addresses preconstruction permits and operating permits in the disjunctive — it says a source may not be operated “until the applicable preconstruction permit
or
... operating permit” is issued (emphasis added). Sierra Club reads those requirements in the conjunctive, effectively replacing “or” with “and.” In fact the rule simply says that a facility must have the permit “applicable” to the activity it seeks to undertake — whether construction or operation — but it does not indicate which permit is applicable to
Sierra Club next points to a provision in the federal PSD regulations which it contends establishes an ongoing duty to obtain a permit.
Any owner or operator who constructs or operates a source or modification not in accordance with the application submitted pursuant to this section or with the terms of any approval to construct, or any owner or operator of a source or modification subject to this section who commences construction . -.. without applying for and receiving approval hereunder, shall be subject to appropriate enforcement action.
Some courts have read similar language in state SIPs to mean that it is unlawful to operate a facility not in accordance with an approved PSD permit.
See, e.g., United States v. E. Ky. Power Coop., Inc.,
Insofar as
Sierra Club also argues that
We cannot agree with this interpretation. The context of
This conclusion is bolstered by the practical nature of BACT. BACT limits are tailored to each facility “on a case-by-case basis” during the PSD permitting process.
The Sixth Circuit’s
National Parks
decision is distinguishable from the present ease for this very reason. That decision relied on a provision in the Tennessee SIP which allowed for the issuance of a PSD permit even after construction had been completed “ ‘to assure that ... regulatory requirements are met.’ ”
Nat’l Parks 6th Cir.,
Finally, Sierra Club and EPA as amicus curiae argue that the CAA and PSD regulations should be interpreted as establishing operational duties because the purpose of the PSD program is to limit emissions on a continuous basis and because PSD permits impose requirements on the operation of the facilities they govern. Some district courts have taken this approach.
See, e.g., United States v. Duke Energy Corp.,
For these reasons we conclude that the plain language of the statute and the regulations applicable to Otter Tail prohibited only modification of the Big Stone plant without a PSD permit or BACT, not its operation.
7
If Otter Tail violated the CAA’s PSD provisions, it did so more than five years before Sierra Club brought this action. Accordingly, Sierra Club’s claims for civil penalties for Otter Tail’s alleged PSD violations are barred by the five year statute of limitations in
III.
We next consider the district court’s dismissal of Sierra Club’s claims for equitable relief based on Otter Tail’s alleged PSD violations.
Sierra Club argues that the district court misapplied the concurrent remedy doctrine. It contends that the doctrine applies only to equitable remedies that are similar in nature to the legal remedy sought. Sierra Club argues that the equitable relief it seeks is different in nature and serves different purposes than the civil penalties and is thus not “concurrent.” Otter Tail maintains in contrast that regardless of the different natures of the remedies, the doctrine applies whenever equitable relief could be available for the same cause of action as a time barred legal remedy.
While Sierra Club’s understanding of the concurrent remedy doctrine has limited support,
see United States v. Cinergy Corp.,
Other circuits have applied the doctrine similarly.
See, e.g., Williams v. Walsh,
The rule in this circuit is in accord with the foregoing decisions. In
Roemmich v. Eagle Eye Dev., LLC,
IV.
We turn finally to Sierra Club’s claim that the 2001 ethanol plant project at Big Stone triggered emission limits under the CAA’s New Source Performance Standards (NSPS) program. Sierra Club contends that the 2001 modifications at the plant made it a “new source” subject to NSPS limits on sulfur dioxide emissions, and that Otter Tail has continued to operate the plant in violation of those limits.
8
The district court dismissed this claim as an impermissible collateral attack on Otter Tail’s Title V operating permit. It concluded that Sierra Club should have raised the claim administratively, under
Sierra Club- argues that the district court misinterpreted the CAA’s judicial review provisions. It contends first that EPA took no action with respect to the 2001 modifications that could have been subject to judicial review, and thus § 7607(b)(2) does not apply. Second, it argues that the district court’s dismissal of the NSPS claim nullified the CAA’s “permit shield” provision,
We agree with the district court that these statutory provisions divested it of jurisdiction over Sierra Club’s NSPS claim because they establish an exclusive avenue for circuit court review of the EPA’s failure to object to a proposed Title V permit, and thus of a claim that a proposed permit does not comply with the CAA.
See Romoland,
Sierra Club’s NSPS claim could have been raised during the permitting process for the 2001 modifications at Big Stone. Otter Tail applied for an amendment to its Title V operating permit when it undertook those modifications. DENR gave public notice of the proposed amendment and invited public comment in accordance with South Dakota’s SIP.
See
S.D. Admin. R. 74:36:05:17. Sierra Club did not comment or request a hearing on the proposed permit.
9
After evaluating the proposed modifications, DENR determined that they would not trigger NSPS. Sierra Club now alleges that they did. Its claim is thus not that Otter Tail is operating in violation of its permit, but rather that the permit omitted applicable CAA requirements. This amounts to an allegation that the permit is “not in compliance with the requirements of’ the CAA,
Had Sierra Club raised its NSPS claim during the permitting process, it could have obtained judicial review. By petitioning EPA to object to the issuance of the permit, Sierra Club would have forced it to evaluate the NSPS claim.
Sierra Club and amicus EPA nevertheless maintain that
In considering whether
The Ninth Circuit took such an approach in its
Romoland
decision, rejecting the very argument Sierra Club and EPA advance here. It concluded that the “ ‘use it or lose it’ provision of ...
We agree with that reasoning. EPA’s failure to object within 45 days of the proposed permit’s submission allowed Otter Tail’s amended permit to be issued and also perfected Sierra Club’s right to petition for an objection. That result followed regardless of whether EPA had affirmatively decided not to object or whether it had declined to review the proposed permit at all.
10
That Sierra Club failed to take the intermediate step of petitioning for an objection does not change the fact that by following the statutory procedure it “could have ... obtained” review of its claim that the 2001 modifications triggered NSPS.
Our conclusion is further bolstered by the practicalities of the permitting process and judicial review thereof. The interpretation Sierra Club urges would allow plaintiffs either to challenge permitting authorities’ applicability determinations during the permit review process or to wait and raise the same issues in an enforcement action. As the
Romoland
court noted, such a scheme could lead to simultaneous suits by multiple parties raising the same or similar issues. This would not only waste judicial resources, but could also result in inconsistent decisions.
See Romoland,
Sierra Club also argues that the district court’s interpretation of
In this case, DENR determined that NSPS did not apply to the 2001 modifications at Big Stone, but Otter Tail’s amended permit did not explicitly incorporate that determination. The parties do not dispute that the permit shield is accordingly not available to Otter Tail. Sierra Club argues that by dismissing its NSPS claim as an impermissible collateral attack on the permit, however, the district court in effect allowed Otter Tail to rely on its permit as a defense without fulfilling the condition imposed by
Sierra Club may be correct that the district court’s interpretation of
Moreover, our interpretation of
We conclude that because Sierra Club could have obtained judicial review of its NSPS claim through the process established by
V.
For the foregoing reasons, we affirm the judgment of the district court.
Notes
. The Honorable Charles B. Kornmann, United States District Judge for the District of South Dakota.
. EPA approved South Dakota's PSD program in 2007. See 72 Fed.Reg. 72, 617 (Dec. 21, 2007). The South Dakota PSD regulations now incorporate the federal regulations by reference. See S.D. Admin. R. 74:36:09:02.
. Our recitation of the facts relies on the allegations in Sierra Club’s complaint which, in this appeal from the grant of a motion to dismiss, are taken as true.
Braden v. WalMart Stores, Inc.,
. "Construction" in this context includes modification.
See
. Numerous district court decisions have also addressed this question, with a majority con-eluding that PSD obligations are not ongoing. See Ivan Lieben, Catch Me If You Can — The Misapplication of the Federal Statute of Limitations to Clean Air Act PSD Permit Program Violations, 38 Envtl. L. 667, 684-697 (2008) (collecting cases).
. Sierra Club contends that its suit is also authorized by
. EPA argues that we should defer to its contrary interpretation of the statute and regulations, but we conclude that such deference would be inappropriate here, where our interpretation is based on their clear and unambiguous language.
See In re Old Fashioned Enters., Inc.,
. Unlike the PSD claims, the NSPS claim is not time barred because it is "unlawful ... to operate” a polluting facility in violation of applicable NSPS provisions.
. Sierra Club protests that the public notice of the proposed permit amendment was not sufficiently specific to allow it to raise the NSPS issue. It has not pointed to any legal inadequacy in the notice, however.
. EPA did in fact review and comment on the proposed amended permit.