727 F.3d 274 (3rd Cir. 2013), 11-4406, United States v. EME Homer City Generation, L.P.

Docket Nº:11-4406, 11-4407, 11-4408
Citation:727 F.3d 274
Opinion Judge:SMITH, Circuit Judge.
Party Name:UNITED STATES OF AMERICA, COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION; STATE OF NEW YORK; STATE OF NEW JERSEY, (Intervenors in District Court) v. EME HOMER CITY GENERATION, L.P.; HOMER CITY OL1, LLC; HOMER CITY OL2, LLC; HOMER CITY OL3, LLC; HOMER CITY OL4, LLC; HOMER CITY OL5, LLC; HOMER CITY OL6, LLC; HOMER CITY OL7, LLC;
Attorney:David J. Hickton, Paul E. Skirtich, Office of United States Attorney, Pittsburgh, PA; Robert J. Lundman [ARGUED], United States Department of Justice, Environment & Natural Resources Division, Washington, DC; John Sither, L. Katherine Vanderhook-Gomez, United States Department of Justice, Environ...
Judge Panel:Before: SMITH, FISHER, and CHAGARES, Circuit Judges.
Case Date:August 21, 2013
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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727 F.3d 274 (3rd Cir. 2013)

UNITED STATES OF AMERICA, COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION; STATE OF NEW YORK; STATE OF NEW JERSEY, (Intervenors in District Court)

v.

EME HOMER CITY GENERATION, L.P.; HOMER CITY OL1, LLC; HOMER CITY OL2, LLC; HOMER CITY OL3, LLC; HOMER CITY OL4, LLC; HOMER CITY OL5, LLC; HOMER CITY OL6, LLC; HOMER CITY OL7, LLC; HOMER CITY OL8, LLC; NEW YORK STATE ELECTRIC AND GAS CORPORATION; PENNSYLVANIA ELECTRIC COMPANY, United States of America, Appellant;

UNITED STATES OF AMERICA, COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION; STATE OF NEW YORK; STATE OF NEW JERSEY, (Intervenors in District Court)

v.

EME HOMER CITY GENERATION, L.P.; HOMER CITY OL1, LLC; HOMER CITY OL2, LLC; HOMER CITY OL3, LLC; HOMER CITY OL4, LLC; HOMER CITY OL5, LLC; HOMER CITY OL6, LLC; HOMER CITY OL7, LLC; HOMER CITY OL8, LLC; NEW YORK STATE ELECTRIC AND GAS CORPORATION, State of New York, Appellant;

UNITED STATES OF AMERICA, COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION; STATE OF NEW YORK; STATE OF NEW JERSEY, (Intervenors in District Court)

v.

EME HOMER CITY GENERATION, L.P.; HOMER CITY OL1, LLC; HOMER CITY OL2, LLC; HOMER CITY OL3, LLC; HOMER CITY OL4, LLC; HOMER CITY OL5, LLC; HOMER CITY OL6, LLC; HOMER CITY OL7, LLC; HOMER CITY OL8, LLC; NEW YORK STATE ELECTRIC AND GAS CORPORATION, Commonwealth of Pennsylvania, Department of Environmental Protection; State of New Jersey, Appellants

Nos. 11-4406, 11-4407, 11-4408

United States Court of Appeals, Third Circuit

August 21, 2013

Argued May 15, 2013.

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On Appeal from the United States District Court for the Western District of Pennsylvania. District Court No. 2-11-cv-00019. District Judge: The Honorable Terrence F. McVerry.

David J. Hickton, Paul E. Skirtich, Office of United States Attorney, Pittsburgh, PA; Robert J. Lundman [ARGUED], United States Department of Justice, Environment & Natural Resources Division, Washington, DC; John Sither, L. Katherine Vanderhook-Gomez, United States Department of Justice, Environmental Enforcement Section, Washington, DC, Counsel for Appellant United States of America.

Richard P. Dearing, Claude S. Platton [ARGUED], Monica B. Wagner, Office of Attorney General of the State of New York, New York, NY; Michael Heilman, Commonwealth of Pennsylvania, Department of Environmental Resources, Pittsburgh, PA; Michael J. Myers, Office of Attorney General of New York, Environmental Protection Bureau, Albany, NY; Jon C. Martin, Lisa J. Morelli, Office of Attorney General of New Jersey, Division of Law, Trenton, NJ, Counsel for Appellants.

Stephen J. Bonebrake, Andrew N. Sawula, Schiff Hardin, Chicago, IL; Kevin P. Holewinski, Jones Day, Washington, DC; James J. Jones, Rebekah B. Kcehowski, Jones Day, Pittsburgh, PA; Brian J. Murray, Jones Day, Chicago, IL; Beth M. Kramer, Jeffrey Poston, Chet M. Thompson [ARGUED], Crowell & Moring, Washington, DC; Peter T. Stinson, W. Alan Torrance, Dickie, McCamey & Chilcote, Pittsburgh, PA; John P. Elwood [ARGUED], Kevin A. Gaynor, Benjamin S. Lippard, Jeremy C. Marwell, Vinson & Elkins, Washington, DC; Paul D. Clement, David Z. Hudson, Bancroft, Washington, DC; Paul E. Gutermann, Akin, Gump, Strauss, Hauer & Feld, Washington, DC, Counsel for Appellees.

Before: SMITH, FISHER, and CHAGARES, Circuit Judges.

OPINION

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SMITH, Circuit Judge.

The owners of a coal-fired power plant failed both to obtain a preconstruction permit and to install certain pollution-control technology before making changes to the plant. The Environmental Protection Agency and several states say the owners were required to do so. But the EPA1 did not cry foul until more than a decade after the changes, well after the owners had sold the plant. Now the EPA wants to force the former owners to obtain the missing

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preconstruction permit and to install the missing pollution controls on a plant they no longer own or operate. And they seek damages and an injunction against the current owners who neither owned nor operated the plant when it was allegedly modified illegally. The relief now sought would require us to distort plain statutory text to shore up what the EPA views as an incomplete remedial scheme. That we cannot do, and so we will affirm the District Court's dismissal of their claims.

I.

A. The Homer City Generation Power Plant goes online in 1969, and Congress enacts the Clean Air Act.

In the 1960s, the Pennsylvania Electric Company (Penelec) and the New York State Electric & Gas Corporation (NYSEG) built the Homer City Generating Station (" the Plant" ), a coal-burning power plant in Indiana County, Pennsylvania. JA66. The Plant's first two burners went online at the end of the decade. Id. At that time, the Clean Air Act was little more than a federally funded research program on air pollution, the EPA did not exist, and the few enforceable standards in place did not affect the Plant's construction and operation. See Air Quality Act of 1967, Pub. L. No. 90-148, 81 Stat. 485-507 (expanding studies into air pollutants, emissions, and control techniques); Clean Air Act Amendments of 1966, Pub. L. No. 89-675, 80 Stat. 954-55; Clean Air Act of 1963, Pub. L. No. 88-206, 77 Stat. 392-401; Air Pollution Control Act of 1955, Pub. L. No. 84-159, 69 Stat. 322 (providing funds for federal research into air pollution).

B. Congress enacts the Clean Air Act, which grandfathers pre-existing pollution sources (like the Plant) out of its requirements until they are " modified."

1. The Clean Air Act of 1970 sets up the modern federalism-based framework.

While the Plant ramped up operations over the next two decades, Congress enacted three amendments to the Clean Air Act transforming it into the comprehensive regulatory scheme it is today. It is necessary, then, to take a minor detour through those legislative changes.

These amendments reach back to 1970 when Congress converted the Act from a federal research program on air pollution into the federalist enforcement framework still in place today. Clean Air Act of 1970, Pub. L. No. 91-604. The 1970 version charged the soon-to-be2 EPA with setting national maximum permissible levels of common pollutants for any given area--called National Ambient Air Quality Standards, or NAAQS (pronounced " knacks" ). See 42 U.S.C. § 7409(a)--(b) (requiring the EPA to choose levels that " allow[] an adequate margin of safety" required " to protect the public health" (quoting 42 U.S.C. § 7409(b)(1)). The EPA designates " nonattainment" areas within each state where a regulated pollutant levels exceeds the NAAQS (so called because the areas are not attaining the EPA's standards). 42 U.S.C. § 7407(d).

The states then take primary responsibility (if they want it3 for choosing how to

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meet the NAAQS within their borders. See Train v. Natural Res. Def. Council, Inc., 421 U.S. 60, 63-67, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975). They do so by creating State Implementation Plans, or SIPs. In their SIPs, states " choose which individual sources within [their borders] must reduce emissions, and by how much." EME Homer City Generation L.P. v. EPA, 696 F.3d 7, 13, 402 U.S. App. D.C. 383 (D.C. Cir. 2012). For instance, a state " may decide to impose different emissions limits on individual coal-burning power plants, natural gas-burning power plants, and other sources of air pollution, such as factories, refineries, incinerators, and agricultural activities." Id. A state must submit its SIP to the EPA for review and approval whenever the NAAQS are updated, see 42 U.S.C. § 7410(a)(1), and each SIP must meet certain requirements, see id. § § 7410(a)(2), 7471.

2. The 1977 amendments create the Prevention of Significant Deterioration (PSD) pre-construction permit program.

The 1970 framework merely prevented pollution sources from exceeding the NAAQS. It did not prevent new construction or modifications that would " gray out" areas with clean air as long as the pollution did not exceed the NAAQS. See Craig N. Oren, Prevention of Significant Deterioration: Control-Compelling Versus Site-Shifting, 74 Iowa L. Rev. 1, 9 (1988). At least that was the consensus before federal courts interpreted the Clean Air Act as requiring the EPA to " prevent deterioration of [the nation's] air quality, no matter how presently pure that quality in some sections of the country happens to be." Sierra Club v. Ruckelshaus, 344 F.Supp. 253, 255 (D.D.C. 1972), aff'd, 41 U.S.L.W. 2255 (D.C. Cir. Nov. 1, 1972) (per curiam), aff'd by an equally divided court sub nom. Fri v. Sierra Club, 412 U.S. 541, 93 S.Ct. 2770, 37 L.Ed.2d 140 (1973) (per curiam) (Powell, J., recused). To enforce that interpretation, Congress created a program for reviewing the effect of new pollution sources on existing air quality before they are constructed. Oren, Prevention of Significant Deterioration, 74 Iowa L. Rev. at 10.

Congress divided this aptly named New Source Review program into two permit programs. For areas with unclean air--called " nonattainment" areas because they are not attaining the NAAQS--the Nonattainment New Source Review program ensures that new emissions will not significantly hinder the area's progress towards meeting the NAAQS. For areas with clean air--" attainment" areas--the Prevention of Significant Deterioration (PSD) program ensures that any new emissions will not significantly degrade existing air quality.4 The PSD program stands at the center of this case.

The PSD program requires operators of pollution sources in attainment areas to obtain a permit from the state or the EPA before constructing or modifying a " major emitting facility"...

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