Greater Detroit Resource Recovery Auth. v. Adamkus

• Decision Date: 17 December 1987
• Docket Number: No. 86-CV-72910-DT.,86-CV-72910-DT.
• Citation: 677 F. Supp. 521
• Parties: GREATER DETROIT RESOURCE RECOVERY AUTHORITY and Combustion Engineering, Inc., Plaintiffs, v. Valdas V. ADAMKUS and United States Environmental Protection Agency, Defendants.
• Court: U.S. District Court — Western District of Michigan

677 F. Supp. 521

GREATER DETROIT RESOURCE RECOVERY AUTHORITY and Combustion Engineering, Inc., Plaintiffs, v. Valdas V. ADAMKUS and United States Environmental Protection Agency, Defendants.

No. 86-CV-72910-DT.

United States District Court, E.D. Michigan, S.D.

December 17, 1987.

Steven Weyhing, John D. Pirich, Lansing, Mich., Stanley M. Gorinson and Joseph A. Cannon, Kevin Sullivan and Steve Christiansen, Washington, D.C., for plaintiffs.

Geneva Halliday, Asst. U.S. Atty., Detroit, Mich., Eric J. Cohen, Asst. Reg. Coun., U.S.E.P.A., Chicago, Ill., and Michael Wenig, U.S. Dept. of Justice, Natural Resources Div., Environmental Defense Sec., Washington, D.C., for defendants.

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS' MOTION FOR COSTS AND ATTORNEY FEES

HACKETT, District Judge.

This case is presently before the court on plaintiffs' motion for costs and attorney fees. For the reasons stated below, the motion of the Greater Detroit Resource Recovery Authority and that of Combustion Engineering, Inc. is granted.

BACKGROUND

The lawsuit underlying this application for costs and attorney fees was brought by plaintiffs Greater Detroit Resource Recovery Authority (GDRRA) and Combustion Engineering, Inc. (C-E). Greater Detroit Resource Recovery Authority is a public body created by the cities of Detroit and Highland Park. It is authorized by its charter to acquire, construct and equip a municipal solid waste combustion facility in Detroit, to acquire or lease the site for that facility, and to issue revenue bonds to defray the costs of the facility. At the time this lawsuit was commenced, GDRRA allegedly had four employees to carry out this task and a net worth of approximately zero. C-E has been retained by the GDRRA to construct a solid waste combustion facility and will also manage, operate, and maintain the facility after its completion.

42 U.S.C. § 7475 requires that all major emitting facilities on which construction is commenced after August 1, 1977, obtain a permit. To qualify for such a permit, a facility must establish, among other things, that required analyses pursuant to regulations have been completed, that public hearings have been held, and that the proposed facility is subject to the best available control technology (BACT) at the time the permit is issued. Both the statute and its regulations define BACT as a case by case evaluation which takes into account energy, environmental and economic impacts, and other costs. Pursuant to a delegation of authority given by the United States Environmental Protection Agency (EPA), the authority to issue permits for such facilities was given to the State of Michigan. Federal Register, Vol. 45. No. 27, February 7, 1980. This delegation was based on certain terms and conditions. Included among these terms was the condition that:

1 if the State enforces the delegated provisions in a manner inconsistent with the terms and conditions of this delegation or the Clean Air Act, USEPA may exercise its enforcement authority pursuant to Section 113 of the Clean Air Act with respect to sources within the State of Michigan subject to PSD provisions.

(Paragraph Seven of the delegation agreement). Paragraph Eight of the delegation agreement provides:

If the Regional Administrator determines that the State is not implementing or enforcing the PSD program in accordance with the terms and conditions of this delegation the requirements of 40 CFR Section 52.21, or the Clean Air Act, this delegation, after consultation with the AQD, may be revoked in whole or in part. Any such revocation shall be effective as of the date specified in a Notice of Revocation to the State.

On or about August 1, 1983, C-E filed an application with the Air Quality Division (AQD) of the Michigan Department of Natural Resources (MDNR) for a permit to install an incinerator on a 17 acre site in an area bounded by the I-94 freeway to the north, Ferry Street to the south, the Grand Trunk Railway to the east and Russell Street to the west. Prior to approving the permit, MDNR required C-E to supplement its application with additional information on at least three separate occasions. A notice of public hearing was published on September 13, 1984, which provided a thirty-day period for public comment on the proposed facility and for a public hearing to be held on October 16, 1984. The EPA was provided with a notice of these dates and with the State of Michigan's staff analysis of the facility. The EPA submitted no comments to the State of Michigan. After comprehensive review, which included an inquiry into the feasibility of using lime spray dry scrubbers, which was rejected, the AQD of the MDNR granted C-E a permit to construct the facility. To finance construction of the facility, the GDRRA then issued bonds amounting to one-half a billion dollars. (Closing of the permanent financing did not occur until May 7, 1986, through the breaking of escrow for the proceeds of the initial bonds and the remarketing to the public of permanent bonds in the amount of $438,000,000.)

During April 23-25, 1985, the EPA conducted an audit of MDNR's new source review program. The auditors report stated:

The MDNR is commended for the continuing dedication of its staff to the task of making and documenting complete reviews of new source applications. As has been reported in earlier audits, the Staff Activity Reports which are on file for all sources submitted for review by the Michigan Air Pollution Control Commission (MAPCC) are noteworthy efforts to document all factors considered in reviews of such applications. This audit revealed no real departures from observance of and adherence to continuing good practices.

In addition to the general audit of MDNR's procedure, the EPA also audited five permits, one of which was the permit issued to GDRRA. After a review of the air quality analyses performed to support the permits, the EPA concluded that "MDNR continues to competently perform the air quality analyses required by the regulations, and a general impression obtained from the audit is that there has been an increase in State activity in performing independent internal reviews of modeling analyses contained in permit applications." The EPA auditors did note, however, that in some instances, as in the case of the GDRRA facility, the MDNR had substituted existing data without a showing it was "representative."

On December 18, 1985, Gerald Avery, supervisor of the permit section of the Air Quality Division (AQD) of the MDNR, sent a letter to C-E and to the City of Detroit on the letterhead of Ronald A. Skoog, director of the AQD of the MDNR, which stated:

The letter of 18 December 1985 from the Department of Natural Resources technical staff was intended to inform you of our discovery of information which indicates that technology other than that approved in your Permit No. 468-83 may better control emission levels from resource recovery facilities. This does not imply that the proposed Detroit facility is unsafe. To the extent that this letter implied that we would request the Commission to modify Permit No. 468-83 to change the air pollution technology required, I regret the confusion this has caused. We recognize that your permit cannot be revised solely because of our finding that a new best available control technology should apply to future waste facilities. Given these facts, the DNR does not intend to pursue the issue of permit modification further. (Emphasis ours.)

Although the MDNR, through Ronald Skoog, recognized that lime scrubbers were BACT for future waste facilities only, a public meeting was held on April 9, 1986, by the Michigan Air Pollution Commission to discuss the facility. The EPA was given notice of this meeting but was unable to send a representative. The EPA did send written testimony which they wished read into the record of the meeting. The testimony was that of Joseph Paisle, Chief of the Technical Analysis Section in the Air Management Division of EPA, Region V. Paisle's testimony stated that a review had been conducted by the EPA of the Resource Recovery Facility which "identified several deficiencies in the construction permit." In regard to the facility's sulfur dioxide emissions, Paisle testified:

It is USEPA's determination that the BACT analysis conducted for this facility was not adequate to meet the requirements of the Clean Air Act. Specifically, the analysis contained only a cursory review of the control technology alternatives rather than the detailed analysis of alternatives required by the Clean Air Act and the PSD regulations. The sulfer dioxide emission limit contained in the permit is therefore unsubstantiated and the permit itself is therefore deficient in this regard.

At the close of the April 9, 1986, meeting the State determined by a vote of 9-1 that there was no basis for the commencement of a proceeding to reconsider the permit.

C-E responded to EPA's statements by letter dated April 18, 1986. Additionally, on April 23, 1986, Bella I. Marshall, chairperson of GDRRA, wrote defendant Valdus Adamkus, Administrator of EPA, Region V, expressing her concern over the uncertainty of the permit's status at a time when the mandatory redemption period of the bonds financing the facility was imminent. Marshall requested a prompt resolution of the issue so as not to interfere with the redemption of the bonds. Meetings were held to resolve the dispute but no formal response was made by the EPA.

On May 8, 1986, the Audubon Society, the Environmental Defense Fund, the Sierra Club and the North Cass Community Union (community groups) sent a letter to the EPA indicating their intent to initiate suit against the EPA pursuant to Section 304(b) of the Clean Air Act (CAA), 42 U.S. C. § 7604(b) and 40 CFR Part 54 for EPA's failure to enforce the CAA's standards for new facilities. The community groups included a memorandum indicating specific concerns. A copy of this memorandum has...