Association of Corporate Counsel – Charlotte Chapter
March 14, 2017
Environmental Citizen Suits:
What are they, why you should care, and a look at
recent trends
Larry Ostema, Partner
[email protected]
John Cain, Novesis, Inc., Founder and President
[email protected]
Deaven Niblock, Associate
[email protected]
N E L SON M U LL I NS R I L EY & S C A RBOROU GH, L L P
Clean Water Act, Clean Air Act, and RCRA
Clean Water Act
Clean Air Act
Resource Conservation and
Recovery Act (RCRA)
Regulates the discharge of
pollutants into jurisdictional
waters and regulates quality of
surface waters
Regulates emissions from
stationary and mobile sources
Regulates the disposal of solid
and hazardous waste
2
What is an environmental citizen suit?
o Provision in major federal environmental statutes which allows a
private plaintiff to seek penalties, injunctive relief, and attorney’s
fees and costs against “any person” (including the government)
o Must allege a violation of a standard, limitation, condition, or order
issued by the Environmental Protection Agency (“EPA”); or
contribution to an imminent and substantial endangerment (RCRAspecific)
o Can sue EPA for failure to perform a non-discretionary duty under
this provision
o Originated from the Clean Air Act and appears in most of the major
federal environmental statutes today
3
Why citizen suits?
o Diligent Prosecution Bar-if agency has diligently prosecuted the issue against a violator, then a citizen suit is
barred (as you can guess, this is still a subject of litigation)
o Supplements agency enforcement, not meant to replace agency action
o Proven mechanism for achieving compliance among the regulated community
o Significant body of environmental litigation consists of citizen suits
o Advance a variety of interests and issues, not just environmental
o Can be brought by a variety of “citizens” including companies, landowners, environmental groups, and states
4
A few items to keep in mind.
o Plaintiff must give pre-suit notice to alleged violator (usually 60 days)
o Suit may be barred if government has commenced and is diligently prosecuting an enforcement action against
the alleged violator (“diligent prosecution bar”)
o Jurisdiction is granted to the federal district courts and venue is where the source of the violation is located or
the violation occurs
o Government may intervene in suit
o Remedies include injunctive relief and civil penalties, settlements can often involve payments in lieu of
penalties for supplemental environmental projects
o Attorney’s fees and costs may also be awarded to successful parties
5
Clean Water Act: 33 U.S.C. § 1365
o Any person may file a civil enforcement action
o Can seek injunctive relief, civil penalties, declaratory judgments
o Suit must be filed in jurisdiction where source is located if alleging a violation of a
standard or limitation, or violation of order
o Advance notice requirement (plaintiff must notify EPA, State, & violator)
o Costs of litigation, including reasonable attorney’s fees & expert fees may be awarded
Flavors of Litigation under Clean Water Act:
o Against any person who is alleged to be in violation of:
◦ an effluent standard or limitation under the CWA; or
◦ an order issued by the EPA or a State with respect to such a standard or limitation.
o Against EPA for failure to perform a non-discretionary act or duty
6
Clean Air Act: 42 U.S.C. § 7604
Types of Suits
o violation of a CAA emission standard, limitation, or order or past violation (if
evidence that violation was repeated)
o EPA failure to perform a non-discretionary act
o proposing to construct a new or modified major source without a permit or in
violation of a permit condition (includes past, repeat violations)
7
Resource Conservation and Recovery Act (RCRA): 42 U.S.C.§ 6972
Types of suits:
◦ violation of RCRA
◦ imminent and substantial endangerment to health or the environment
(P does not have to point to a specific violation of regulation)
◦ action against EPA for failure to perform a non-discretionary act or duty
8
Getting into court with a citizen suit.
A lesson in standing brought to you by a very famous environmental citizen suit.
Friends of the Earth, Inc. v. Laidlaw Environmental Servs., Inc.(528 U.S. 167) (2000)
• Facts:
 Laidlaw operated a wastewater treatment plant in South Carolina and had a permit to discharge certain limited quantities of
pollutants into the North Tyger River
 Laidlaw violated its permit 489 times between 1987-1995 (discharged too much Mercury)
 Friends of the Earth sues Laidlaw (after Laidlaw asks State of South Carolina to sue it first)
• Holding:
Supreme Court held environmental groups had standing to sue for injunctive relief and civil penalties
 Environmental groups alleged that they would no longer use the Tyger River for recreational purposes due to Laidlaw’s
discharges
 This was sufficient injury in fact even if there was no resulting injury to the environment
 Standing sufficient for plaintiff’s to seek injunctive relief and civil penalties (even though civil penalties are paid to the
government) b/c of deterrent effect
9
Recent cases: Clean Water Act (CWA)
Louis Paolino v. JF Realty, LLC (830 F. 3d 8)
o First Circuit
o Decided: July 18, 2016
**NOTE: One to watch: Plaintiff filed Petition for Certiorari filed in U.S. Supreme Court in December of
2016, Response due on March 27, 2017
BACKGROUND:
• Two parcels were part of a larger tract & was formerly operated as a pig farm and waste dump
• Paulino sold two sections of his tract and was sued by buyer for failure to disclose contamination on the
property
• Paulino directed to remediate his property
• 2005-Rhode Island Department of Environmental Management (IDEM) issued Notice of Intent to
Enforce to Advanced Auto requiring it to install stormwater runoff controls & to apply for a Rhode Island
Pollution Discharge Elimination System (RIPDES) permit
10
Recent Cases: Citizen suits under Clean Water Act (CWA)
Paulino v. JF Realty, LLC
Background (continued):
• Advanced Auto submitted application for the permit naming Advanced as the operator & the Joseph
Ferreira Trust as the owner (owner at the time was actually JF Realty & LKQ was the operator)
• RIDEM issued permit to Joseph Ferreira Trust
• Advanced Auto installed stormwater management system, but was not fully in compliance until 2008
• Notice of Violation to JF Realty & administrative penalty
• JF Realty paid penalty and further inspections in 2014 found no additional violations
• Paulino filed claim for injunctive relief & civil penalties
• District Court concluded that plaintiff’s failed to meet their burden of proof
• Defendant filed motion for attorney’s fees
11
Recent Cases: Citizen suits under Clean Water Act (CWA)
Paulino v. JF Realty, LLC
ISSUES ON APPEAL:
o Exclusion of plaintiff’s untimely expert witness report
o Proof that defendant’s were discharging pollutants into navigable waters without a permit
o Violation of CWA by failing to transfer the RIPDES permit to JF Realty
o Appropriateness of fee award
12
Recent Cases: Citizen suits under Clean Water Act (CWA)
Paulino v. JF Realty, LLC
CONCLUSIONS:
FEE AWARD; CWA citizen suit provisions authorizes;
o “The court, in issuing any final order in any action brought pursuant to this section, may award costs of
litigation (including reasonable attorney and expert witness fees) to any prevailing or substantially
prevailing party, whenever the court determines such award is appropriate.”
o District court awarded $111,784.50 to Defendant b/c Plaintiff continued to litigate after claims become
meritless
(these were the fees charged by Defendant’s counsel from date by which discovery had been completed
and Plaintiff responded to Defendant’s motion for summary judgment)
o Court noted RIDEM’s involvement, Defendant’s efforts in remediating the issues, and Plaintiff’s continued
litigation without merit
13
Recent Cases: Citizen suits under Clean Water Act (CWA)
Askins v. Ohio Department of Agriculture (809 F. 3d 868)
oSixth Circuit
oDecided: January 6, 2016
Background:
• Ohio EPA administers state-NPDES program
• In 2001, Ohio legislature authorizes Ohio Department of Agriculture (ODA) to submit application to EPA
to take over the part of the NPDES program regulating animal feeding operations
• 2001 Legislation also amended Ohio’s NPDES laws to reflect transfer
• Askins brought citizen suit alleging the following:
1) Ohio EPA failed to inform EPA that it transferred authority to ODA until 5 years after transfer
2) ODA administered part of the NPDES program without EPA approval
3) US EPA permitted Ohio EPA to transfer the program to ODA without its approval
4) US EPA allowed ODA to administer the program without its approval
14
Recent Cases: Citizen suits under Clean Water Act (CWA)
Askins v. Ohio Department of Agriculture
District Court rejected all of Plaintiff’s claims & dismissed for lack of subject matter jurisdiction.
o Askins failed to established private cause of action under CWA
o US EPA did not fail to perform a non-discretionary duty
o Defendants did not violate CWA
Atkins appealed
o Sixth Circuit:
1.) Notification requirement: state is not required to comply with this requirement to avoid a citizen suit
2.) Notification requirement is not a condition of a permit
3.) No private cause of action against regulators for violating procedural regulations
• “The citizen suit serves only as a backup, ‘permitting citizens to abate pollution when the government cannot or will not
command compliance’.”
• “Citizen suits are ‘meant to supplement rather than to supplant governmental action’…”
15
Recent Cases: Citizen suits under Clean Water Act
(CWA)
Sierra Club v. ICG Hazard, LLC (781 F. 3d 281)
o Seventh Circuit
o Decided: January 27, 2015
ISSUE:
Applicability and scope of the permit shield when the discharger's operations are governed by a general permit. (no other circuit had
addressed permit shield scope w/ regard to general permits, only looked at individual permits)
BACKGROUND:
• During relevant time period, ICG Hazard operated surface coal mining operation in Kentucky under NDPES general permit
• Selenium released during operations, concentrations in surrounding water exceeded threshold in state’s water quality program
• Sierra Club sues ICG alleging CWA violation (also brings claim under Surface Mining Control and Reclamation Act) based on
selenium releases
• District Court finds in favor of Sierra Club
• ICG appeals, argues that “permit shield” applies to its selenium discharges
16
Recent Cases: Citizen under Clean Water Act
Sierra Club v. ICG Hazard, LLC
Analysis:
PERMIT SHIELD APPLICABILITY & SCOPE-GENERAL PERMITS:
o Court finds that permit shield applies
o Defers to EPA interpretation of statutory scheme-allowing some pollutants to be discharged even though not
specifically listed in the general permit (EPA Interpretation in formal adjudication proceeding- In re Ketchikan
Pulp Co., 7 E.A.D. 605, 1998 WL 284694 (E.P.A. May 15, 1998))-decision dealt with an individual permit, but EPA
broadly refers to NPDES permits & the overall permitting scheme in its decision
o EPA explained impossibility of identifying and limiting every potential compound or chemical in a discharge
SCOPE OF PERMIT SHIELD:
o Court holds that permit shield prongs in Piney Run case (268 F. 3d 255) apply to general permits as well
1.) Compliance with reporting requirements
2.) Discharge in reasonable contemplation of permitting authority
• Court finds that ICG satisfied first prong when it completed one-time test during life of permit & disclosed
selenium discharge in its request to modify its permit
• Court finds that selenium discharge was within reasonable contemplation of permitting authority because
at time Kentucky Division of Water issued the general permit it knew that mines in the area could produce
selenium
17
Recent Cases: Citizen suits under RCRA
Center for Community Action and Environmental Justice v. BNSF Railway Company (764 F. 3d 1019)
o Ninth Circuit
o Decided: August 20, 2014
BACKGROUND:
• Environmental organizations bring citizen suit against rail companies alleging that emissions of diesel
particulate matter at or near railyards constitutes a RCRA violation
• Union Pacific & Burlington Northern Railway Companies operate 16 railyards in California
• Plaintiff’s argue that exhaust particles fall to the ground and water nearby
• Plaintiff’s cite to health impacts associated with diesel particulate matter
18
Recent Cases: Citizen suits under RCRA
Center for Community Action and Environmental Justice v. BNSF Railway Company
Plaintiff’s invoke RCRA citizen suit provision:
42 U.S.C. § 6972(a)(1)(B):
• “any person may commence a civil action on his own behalf…against any person…, including any past or present transporter, or
past or present owner or operator of a treatment, storage, or disposal facility, who has contributed to or who is contributing to
the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present
an imminent and substantial endangerment to health or the environment.”
• Plaintiff’s argue that diesel particulates are solid and hazardous waste & railway companies are contributing to or have
contributed to the “handling, storage, treatment, transportation, or disposal” of that waste
• Defendant’s argue that RCRA’s regulation of air emissions applies to air pollutions which result from burning of fuel only when
the fuel contains solid or hazardous waste
• District court grants defendant’s 12(b)(6) motion to dismiss for failure to state a claim under RCRA, concluding that the Clean Air
Act and not RCRA applies to the diesel emissions & noting that even if RCRA does apply, diesel exhaust is not a solid or
hazardous waste
19
Recent Cases: Citizen suits under RCRA
Center for Community Action and Environmental Justice v. BNSF Railway Company
o Plaintiff’s argue:
• Railway companies dispose of solid waste (the diesel matter) by allowing into to be transported by wind and air currents onto land
and water
o Ninth Circuit:
• Disagrees w/ Plaintiff’s theory of disposal
• RCRA’s definition of “disposal” does not include “emitting”
• RCRA §6903(3) is very specific and limits “disposal” to “discharge, deposit, injection, dumping, spilling, leaking, or placing”
• §6903(3) does not extend to emissions of solid waste directly into the air
20
Recent Cases: Citizen suits under RCRA
Jim 72 Properties, LLC v. Montgomery Cleaners (151 F.Supp.3d 1092)
o District Court, C.D. California
o Decided: December 16, 2015
BACKGROUND:
• Plaintiff is prospective owner of the property
• In May 2013, Plaintiff entered into escrow to purchase a parcel of property located adjacent to a dry cleaning business
• Environmental Assessment revealed soil & groundwater contamination
• Plaintiff alleges that the escrowed property is polluted due to dry cleaner’s activities on the property (brings claims under RCRA
and state law claims for nuisance, negligence, and trespass)
• Current owners of property and Plaintiff (prospective owner) then execute Assignment Agreement assigning to Plaintiff “all right,
title, and interest in any claims or causes of action” held by current owners against the dry cleaning business for contamination
• Dry cleaner files MTD for lack of jurisdiction & attacks Plaintiff’s standing
21
Recent Cases: Citizen suits under RCRA
Jim 72 Properties, LLC v. Montgomery Cleaners
Standing:
o Plaintiff does not need to have title to the property to have standing, only needs title to the claims brought in this action
o Assignability is related to survivability
o RCRA does not have a survivability provision, so federal common law governs
o Claims that are remedial in nature will survive
o No court has assessed the survivability of RCRA claims
Three factor-test applies to determine whether statute is remedial or penal in nature:
o 1.) Whether purpose of statute is to redress individual wrongs or general wrongs to the public
o 2.) Whether recovery under the statute runs to the harmed individual or to the public
o 3.) Whether the recovery under the statute is wholly disproportionate to the harm suffered
22
Recent Cases: Citizen suits under RCRA
Jim 72 Properties, LLC v. Montgomery Cleaners
Three factor-test (continued):
1.) Individual v. Public Wrongs:
• RCRA aims to address large-scale harms as well as alleviate individualized harms
• Court finds RCRA is meant to address individual harms (remedial)
2.) Recovery runs to the individual v. Public:
• RCRA includes civil penalties to the U.S. up to $25k
• Remedy flows to the government, not the individual
• Penalties are not punitive in nature, but serve “remedial goal” of compensating government for clean-up costs
3.) Relationship of Recovery to the Harm:
• RCRA allows for injunctions and civil fines
• Injunctions are remedial in nature
*Court finds that all three factors weigh in favor of survivability, and determines that RCRA claims are
assignable
23
Recent Cases: Citizen suits under RCRA
Jim 72 Properties, LLC v. Montgomery Cleaners
Does Agreement Properly Assign Rights to Suit?
o “Assignor hereby assigns and transfers to Assignee all of their right, title, and interest in any claim or causes of actions Assignor may
have against owner or any previous owner of the [Rendon property] relating to the PCE Contamination. In connection with such
assignment, Assignee hereby assigns to Assignor any and all rights to bring a complaint or pursue a claim relating to…”
o Court finds this language to clearly demonstrate an intent to immediately transfer the right to sue
o Conditions in the Assignment are irrelevant to Standing
o Standing is determined at the commencement of the litigation –Plaintiff was in escrow when he commenced suit
o If real estate deal falls through, claims return to the current owner of the property (current owner can continue litigating or dismiss
the suit)
*Take-away: RCRA claims are assignable.
24
Recent Cases: Citizen suits under the Clean Air Act
(CAA)
Group Against Smog and Pollution, Inc. v. Shenango Incorporated (810 F. 3d 116)
o Third Circuit
o Decided: January 6, 2016
BACKGROUND:
• Group (“GASP”) brings suit against operator of coke manufacturing and by-products recovery facility
(Shenango) alleging violations of three emissions standards
• Shenango’s facility is subject to emissions standards in Pennsylvania’s State Implementation Plan (SIP)
• Allegheny County Health Department has authority to enforce air pollution laws in Alleghany County, PA
• District Court granted Shenango’s 12(b)(1) motion to dismiss for lack of subject matter jurisdiction (Note:
Shenango also brought a 12(b)(6) motion); administrative agencies were already “diligently prosecuting”
the CAA violations and therefore the suit was prohibited by the diligent prosecution bar in 42 U.S.C. §
7604(b)(1)(B)
25
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Group Against Smog and Pollution, Inc. v. Shenango Incorporated
But first…
• 2012: EPA, Pennsylvania Department of Environmental Protection, and ACHD filed
suit against Shenango for violations of these 3 emissions standards; result was a
Consent Decree
• 2014: GASP sent Notice of intent to Sue to Shenango (alleging violations of same
3 standards)
• ACHD files action against Shenango for violations of same 3 standards; result was
a Consent Order and Agreement
• ACHD retained authority to deal with future violations and to enforce the
Agreement if Shenango failed to comply
26
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Group Against Smog and Pollution, Inc. v. Shenango Incorporated
On appeal, GASP argues:
1.) Diligent prosecution bar should not apply b/c no state or agency was “prosecuting” a civil action when GASP filed its suit
2.) Consent Decrees (2012 & 2014) do not “require compliance” with the CAA
Analysis:
o Court looked to congressional intent & compared with similar statutory schemes (including RCRA) to determine that diligent
prosecution bar in CAA is meant to be a claim-processing rule rather than a jurisdictional limitation
o Issue of First Impression in this Court: Whether county health department’s actions in furthering goal of consent decrees could
invoke application of the diligent prosecution bar.
o Court looks to case law from other circuit courts and district court case within this Circuit, to determine that a diligent prosecution
bar applies to a Consent Order.
• Court finds this to be an example of “ongoing diligent prosecution”
• Consent Decree & Consent Order and Agreement include provisions for ongoing monitoring & recording of
Shenango’s emissions and allow ACHD to inspect & record emissions
• Consent decree & Consent Order and Agreement adequately set forth ACHD’s approach w/ respect to each
of the three violations & does require compliance with CAA
27
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Group Against Smog and Pollution, Inc. v. Shenango Incorporated
Holding:
o Upheld District Court , but on other grounds. Concluded that GASP failed to state a claim because
administrative agencies were already prosecuting the CAA violations and that prosecution requires compliance
with the CAA.
o Diligent prosecution bar of CAA is not a jurisdictional limitation, it should be dismissed through 12(b)(6)
motion to dismiss for failure to state a claim (not 12(b)(1)).
Takeaways:
o Diligent prosecution bar of CAA is not a jurisdictional limitation, but rather a “claim-processing” limitation
o Final judgment, consent decree, or consent order and agreement do not preclude application of diligent
prosecution bar if state or agency has diligently prosecuted a suit
o Court finds this to be an example of “ongoing diligent prosecution”
o Consent Decree & Consent Order and Agreement include provisions for ongoing monitoring & recording of
Shenango’s emissions and allow ACHD to inspect & record emissions
o “Our decision hinges on the circumstances of this case and the ongoing vitality of these Consent Decrees,
specifically the parties’ ability to modify or enforce the terms of the Consent Decrees.”
28
Recent Cases: Citizen suits under the Clean Air Act
(CAA)
Nucor Steel-Arkansas v. Big River Steel, LLC (825 F. 3d 444)
o Eighth Circuit
o Decided: June 8, 2016
BACKGROUND:
• Nucor Steel Arkansas and Nucor Yamato Steel (“Nucor”) are sister companies that operate steel mills in
Mississippi County, Arkansas
• Big River (a Nucor competitor) receives permit from Arkansas Department of Environmental Quality (“ADEQ”) to
construct new steel recycling and manufacturing facility in Osceola, Arkansas
 ADEQ has authority to issue preconstruction PSD permits and Title V operating permits; issued in a
combined permit to qualifying entities
 Nucor challenges issuance of the combined PSD &Title V permit to Big River & seeks review from the
Arkansas Pollution Control & Ecology Commission
 Commission conducts hearing & ultimately affirms permit issuance
 Nucor appeals to the Arkansas Circuit Court and then to Arkansas Court of Appeals
 Arkansas COA affirms Commission’s decision to issue permit
 Nucor petitions EPA to object to permit issuance, EPA does not respond & does not object
 Nucor sues EPA separately to compel EPA to answer petition
29
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Nucor Steel-Arkansas v. Big River Steel, LLC
Background (continued):
Nucor brings this suit against Big River under CAA:
• Alleges that Big River’s construction permit is invalid & continued construction violates CAA & PSD
regulations
• Seeks injunction to prevent Big River from constructing (or continuing to construct) its new facility
District Court dismisses for lack of subject matter jurisdiction; concluded that Nucor’s suit was a
collateral attack on a facially valid air permit & CAA does not authorize this attack
• Nucor appeals
30
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Nucor Steel-Arkansas v. Big River Steel, LLC
On appeal, Nucor argues:
o District court erred in failing to consider whether Big River’s alleged violations of the State Implementation Plan qualified as a challenge to an
“emission standard or limitation”
o District court erred in finding that it lacked jurisdiction over Nucor’s allegation that Big River violated requirements to obtain its PSD permit
o District court erred in holding Big River’s permit “facially valid”
o District court erred by barring Nucor’s PSD claims based on EPA’s Title V review process
FINDINGS:
o
o
o
o
o
No dispute that “emission standard or limitation” includes standards found in SIP’s
Nucor’s allegations related to one-time permitting requirements under CAA PSD or Arkansas SIP, Nucor did not allege continuing violations
Past violation must be repeated, one-time violation is insufficient
CAA does not authorize a collateral attack on a facially valid permit
§7604(a)(3) does not authorize preconstruction citizen suits against parties that have obtained a permit or are in process of obtaining a
permit (other remedies available)
o EPA review of combined permit is available to Nucor
31
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Nucor Steel-Arkansas v. Big River Steel, LLC
Holding:
o Nucor failed to allege repeated or ongoing violations of an emissions standard or limitation
o No subject matter jurisdiction based on allegations that Big River did not meet requirements to obtain PSD permi t
Takeaways:
o
o
o
o
No dispute that “emission standard or limitation” includes standards found in SIP’s
Past violation must be repeated, one-time violation is insufficient
CAA does not authorize a collateral attack on a facially valid permit
§7604(a)(3) does not authorize preconstruction citizen suits against parties that have obtained a permit or are in
process of obtaining a permit (other remedies available)
o EPA review of combined permit is available to Nucor
32
Recent Cases: Citizen suits under the Clean Air Act
(CAA)
Environment Texas Citizen Lobby, Incorporated v. ExxonMobil Corporation (824 F. 3d 507)
o Fifth Circuit
o Decided: May 27, 2016
Background:
• Non-profit environmental groups bring civil suit against Exxon alleging several violations over an eight year period at Exxon’s
Baytown, Texas industrial facility
• Facility is composed of a refinery, an olefins plant, and a chemical plant
• Permits for all three plants included (i) HRVOC Rule which limits HRVOC emissions to no more than 1200 lbs./hr. (ii) Maximum
Allowable Emission Rate Table; and (iii) prohibition on visible flare emissions for periods exceeding 5 minutes in any 2-hour period
• Each permit also contained a prohibition on upset emissions
• Exxon’s required reporting to TCEQ & record-keeping led TCEQ to pursue enforcement & over $1 million in penalties
• 2012: TCEQ & Exxon entered into “agreed enforcement order” –required Exxon to implement 4 projects to reduce emissions at the
Baytown Complex
33
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Environment Texas Citizen Lobby, Incorporated v. ExxonMobil Corporation
Background:
Plaintiffs sued in 2010 & claimed that Exxon repeatedly…(over a period from October 2005-date of suit)
1.)
2.)
3.)
4.)
5.)
Violated a permit condition regarding emissions from “upset” events (thousands of violations)
Emitted pollutants in excess of hourly limits (13,000 days of violations)
Emitted highly reactive volatile organic compounds (HRVOCs) in excess of 1200 lbs./hr. limit (18 days of violations)
Violated a prohibition on visible emissions from flares (44 days of violations)
Violated many other permit requirements (emissions & non-emissions related)-reflected in Texas Commission on
Environmental Quality “deviation reports” (4,000 days of violations)
Plaintiff’s sought:
• Statutory penalty of over $600 million
• Declaratory judgment that Exxon violated its permits (and CAA)
• Permanent injunction against further violations
• Attorney’s fees & costs
• Appointment of “special master” to monitor relief
34
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Environment Texas Citizen Lobby, Incorporated v. ExxonMobil Corporation
o Plaintiff’s relied exclusively on Exxon’s State of Texas Environmental Electronic Reporting System
(STEERS) reports, records of recordable events, and Title V deviation report
o Out of thousands of violations, District Court found only 94 actionable violations but declined to order
any relief
o Fifth Circuit vacated & remanded for assessment of penalties based on correct number of violations
35
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Environment Texas Citizen Lobby, Incorporated v. ExxonMobil Corporation
1.) Violation of “No-Upset Emissions” Condition
• “upset event”: unplanned and unavoidable breakdown or excursion of process or operation that
results in unauthorized emissions (30 Tex Admin. Code § 101.1(110))
• District Court treated these no-upset emissions violations as MAERT limit violations, rather than
violations of the special condition in the permit
• Fifth Circuit recognizes Plaintiff’s theory that every “emissions event” could constitute a violation of
the “no upset emissions” special condition
2.) Maximum Allowable Emission Rate Tables (MAERT) Limit Violations
• District Court interpreted CAA citizen suit statute as requiring plaintiff to prove repeated violations of
the same, specific permit limitations
• Fifth Circuit holds that limits on specific pollutants from specific emissions points (or groups of points
in flex permits) constitute permit “emission standards or limitations” ( a court could find that these
standards or limitations were violated repeatedly regardless of whether the numerical value of limits
has changed)
36
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Environment Texas Citizen Lobby, Incorporated v. ExxonMobil Corporation
3.) Violation of HRVOC limit & Smoking Flare Rule
•
District Court declined to recognize certain of these violations because they were not corroborated, even
though Exxon conceded at trial that all alleged violations of the HRVOC limits & Flare rules constituted
“violations of an emission standard or limitation”
•
Fifth Circuit found this to be error & remanded to included as violations those entries rejected as
“uncorroborated”
4.) Additional Violations in Deviation Reports
• District Court agreed with Exxon that a deviation is not always a violation, Plaintiff’s could not rely solely on
deviation reports to provide actual violations
• Fifth Circuit agrees that deviation reports alone are insufficient proof of actionable violations
37
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Environment Texas Citizen Lobby, Incorporated v. ExxonMobil Corporation
RELIEF:
1.) Declaratory Judgment:
o
District Court declined to issue declaratory judgment
o
Fifth Circuit agrees; court had already concluded that Exxon committed actionable violations of its permits, declaratory judgment serves no “useful”
purpose at that point
2.) Penalties:
o
District declined to impose penalty
o
Fifth Circuit analyzes penalty factors under CAA:
•
Citizen suits penalties: “a penalty may be assessed for each day of violation” (42 U.S.C. § 7413 (e)(2))
•
Whether to impose a penalty is up to the court (not mandatory)
•
Seven penalty factors (42 U.S.C. § 7413 (e)(1)):
1) size of business
2) economic impact of penalty on the business
3) violator’s compliance history & good faith compliance efforts
4) duration of violation
5) payment of penalties previously assessed (for same violation)
6) economic benefit of noncompliance
7) seriousness of violation
38
Recent Cases: Citizen suits under the Clean Air Act (CAA)
Environment Texas Citizen Lobby, Incorporated v. ExxonMobil Corporation
Penalties (continued):
3.) Good faith and compliance history:
o Size & complexity of facility should be considered
o Exxon’s agreement w/ TDEQ showed good faith and an effort at achieving compliance
4.) Economic Benefit of Noncompliance:
o 4 Environmental improvements projects from TDEQ order
o Plaintiff’s expert calculated an economic benefit to Exxon of approx. $11.7 million for delaying implementation of the projects between 2005 and 2012
o Required to make some showing that delayed expenditures would be necessary to correct the violations
5.) Duration of Violation:
o Consider whether any violation, standing alone, was long enough to impose a penalty
6.) Seriousness of Violation:
o Multiple violations, do not balance more serious against less serious
o Can look to overall number & severity of emissions or discharges
o Can also look to risk or potential risk of harm to the environment
39
Recent Cases: Citizen suits under the Clean Air Act
(CAA)
Natural Resources Defense Council v. Illinois Power Resources, LLC (2016 WL 4468552)*
o Central District of Illinois, Peoria Division
o Decided: August 23, 2016
BACKGROUND:
o Illinois Power Resources owns and operates the Edwards Power Plant in Bartonville, Illinois
o Coal fired plant w/ three units; Units 1 & 2 exhaust through a common smokestack (Stack #1), Unit 3
exhausts through a second smokestack (Stack #2)
o Center of stack #2 is less than 1,000 feet from center of stack #1
*Only Westlaw citation available at this time.
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Recent Cases: Citizen suits under the Clean Air Act (CAA)
Natural Resources Defense Council v. Illinois Power Resources, LLC
Edwards plant is subject to emissions standards under the Illinois State Implementation Plan &
operating permit issued by Illinois EPA
o Emissions limits
o Opacity limits
•
30% opacity limit
•
Edwards required to make quarterly reports to EPA on periods of excess opacity
•
Between April 18, 2008 & June 30, 2014, Edwards reported 2, 949 instances where it exceed an average opacity of greater
than 30% for 6 minutes or longer
Based on these reports, Plaintiff submits motion for partial summary judgment on three claims:
1) violation of opacity standards when plant not in state of startup, malfunction, or breakdown
2) violation of opacity standards when plant may have been in state of startup, malfunction, or breakdown
3) violation of particulate matter standards
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Recent Cases: Citizen suits under the Clean Air Act (CAA)
Natural Resources Defense Council v. Illinois Power Resources, LLC
Before the court on cross-motions for summary judgment w/ regard to Article III standing and plaintiff’s three claims
Standing:
Organizational Standing:
1.) At least one of the members would have standing
2.) Interests at stake are germane to organization’s purpose; and
3.) Neither claim nor relief requires individual member’s participation in the suit
Member standing:
1.) Injury in fact that is concrete & particularized, and actual or imminent
2.) Injury is fairly traceable to challenged action
3.) Likely that a favorable decision will redress the injury
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Recent Cases: Citizen suits under the Clean Air Act (CAA)
Natural Resources Defense Council v. Illinois Power Resources, LLC
Standing:
o Defendant’s challenged NRDC & Sierra Club’s member standing
Injury in Fact:
o “In the case of air pollution, simple exposure to pollutants can establish the necessary injury in fact.”
o NRDC & Sierra Club witnesses testified that particulate matter emissions from the Edwards plant diminished their enjoyment of
outdoor activities & expressed concerned about health effects associated with emissions
o Defendant’s challenged the reasonableness of the Plaintiff’s fears w/ expert testimony
o Expert opines that the emissions cannot cause the health consequences that concern the NRDC & Sierra Club members
o Court says Defendants have “set the bar for reasonableness too high”:
• Fear does not have to be based in medical or scientific evidence, just needs to be reasonable
• It was enough that witnesses lived, worked, or recreated in a geographic area where the emissions were & are present
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Recent Cases: Citizen suits under the Clean Air Act (CAA)
Natural Resources Defense Council v. Illinois Power Resources, LLC
Standing continued:
Traceability:
o Plaintiff’s injury must be fairly traceable to Defendant’s actions
o All plaintiff’s have to show is that defendant’s discharges caused or contributed to the injury in the geographic area
o Plaintiff’s do not have to rule out every alternative cause of pollution (ex. Highway traffic, leaf burning, etc.)
Redressability:
o Plaintiff must show that their fairly traceable injuries are redressable
o Plaintiff’s alleged opacity and particulate matter violations (past & ongoing violations) & sought declaratory,
injunctive, and civil penalties
o Past, continuing wrongs can be redressed by injunctive relief
o Civil penalties abate current violations & prevent future violations
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Recent Cases: Citizen suits under the Clean Air Act (CAA)
Natural Resources Defense Council v. Illinois Power Resources, LLC
Defendant’s assert three defenses
1.) Particulate Matter Defense to opacity violations: Defendant’s argued it was in compliance with its particulate matter limits at all times,
including when it was out of compliance with opacity limits
2.) Malfunction, and Breakdown Defense: Defendant’s argue that exceedances should be excused when plant was in malfunction or breakdown
3.) Off-line defense: Defendant’s argue that particulate matter & opacity limitations do not apply when units were offline & undergoing
maintenance
Court concludes these defenses fail because
1.) To establish PM defense: Defendant was required to conduct testing of the stack units “under the same operating conditions that were
present during the initial exceedance within sixty days of that exceedance”-Defendant did not do this
2.) To establish opacity defense: Defendant was required to conduct testing of the stack units “while operating with an opacity that was equal
to or greater than the original exceedance within sixty days of that exceedance”-Defendant did not do this
3.) Edwards’ did not comply with permit conditions requiring notification to Illinois EPA of emissions exceedances during these periods of
malfunction or breakdown & compliance with terms & conditions of permit is only method by which Edward’s could provide the malfunction &
breakdown defense
4.) Opacity & PM limits apply during periods of maintenance; Edwards’ permit limitations contained no reference to whether the unit is
operating or undergoing maintenance
*NOTE: Illinois Power Resources filed petition for permission to appeal on November 14, 2016; Petition denied on February 27, 2017.
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Final Thoughts
MAJOR TAKE-AWAYS:
o Easy for plaintiff’s to get into court on these claims
o Difficult to find a reported case where plaintiff’s are without standing
o Violations can be numerous and penalties severe
o Regulations involved are complex and create unpredictability in compliance
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