874 F.2d 332 (6th Cir. 1989), 88-1217, Her Majesty The Queen In Right of the Province of Ontario v. City of Detroit

Docket Nº:Ontario, Plaintiffs-Appellants (88-1217),
Citation:874 F.2d 332
Party Name:HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO; Ian G. Scott, Attorney General for Ontario; and James Bradley, Minister of the Environment of the Province of
Case Date:May 02, 1989
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 332

874 F.2d 332 (6th Cir. 1989)

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO;

Ian G. Scott, Attorney General for Ontario; and James

Bradley, Minister of the Environment of the Province of

Ontario, Plaintiffs-Appellants (88-1217),

The Detroit Audubon Society; the North Cass Community

Union; the Sierra Club; and the Environmental

Defense Fund, Plaintiffs-Appellants (88-1268),

v.

The CITY OF DETROIT; the Greater Detroit Resource Recovery

Authority; and Combustion Engineering, Inc.,

Defendants-Appellees.

Nos. 88-1217, 88-1268.

United States Court of Appeals, Sixth Circuit

May 2, 1989

Argued Feb. 6, 1989.

Rehearing and Rehearing En Banc Denied in No. 88-1217 July 31, 1989.

Page 333

Donnelly W. Hadden (argued), Donnelly W. Hadden, P.C., Detroit, Mich., Jeffrey K. Haynes, Vanderkloot & Haynes, P.C., Bloomfield Hills, Mich., for plaintiffs-appellants in No. 88-1217.

John D. Pirich (argued), Miller, Canfield, Paddock & Stone, Lansing, Mich., for Greater Detroit Resource Recovery Authority.

Kevin R. Sullivan, Stanley M. Gorinson, Pillsbury, Madison & Sutro, Washington, D.C., C. Douglas Floyd, Pillsbury, Madison & Sutro, San Francisco, Cal., Darryl F. Alexander, Susan Lynn Johnson, Detroit, Mich., for Combustion Engineering, Inc.

Mark Richardson, Detroit, Mich., Michale Herz, New York City, for plaintiffs-appellants in No. 88-1268.

Donald Pailen, City of Detroit Corporate Counsel, Detroit, Mich., for City of Detroit and Combustion Engineering, Inc.

Elizabeth S. Harris, Birmingham, Mich., for amicus curiae, East Michigan Environmental Action Council.

Deborah LaBelle, Thomas W. Stephens, Detroit, for amicus curiae, National Lawyers Guild.

Before: MILBURN and BOGGS, Circuit Judges, and CONTIE, Senior Circuit Judge.

MILBURN, Circuit Judge.

Plaintiffs-appellants in No. 88-1217 are the Canadian Province of Ontario, the Attorney General for Ontario, and the Minister of the Environment for Ontario (hereinafter collectively referred to as "Ontario"). Plaintiffs-appellants in No. 88-1268 are four nonprofit organizations concerned with the environment (hereinafter collectively referred to as "Detroit Audubon"). Defendants in both actions are the Greater Detroit Resource Recovery Authority ("GDRRA"), a municipal corporation which has as its sole purpose the construction of a municipal solid waste combustion facility in Detroit, Michigan; Combustion Engineering, Inc. ("Combustion"), the construction company retained to build that facility; and the City of Detroit.

In both actions plaintiffs appeal from orders of the district court denying their

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respective motions to remand these actions which had been removed from state court, and from the district court's granting the defendants' motions for summary judgment and dismissing both actions. The principal issue on appeal is whether these consolidated actions were improvidently removed from state court. For the reasons that follow, we hold that they were improvidently removed.

I.

These consolidated appeals involve what will be the nation's largest municipal trash incinerator presently under construction in Detroit, Michigan, and scheduled for completion in the spring or summer of 1989. It will process raw garbage into refuse dry fuel (RDF). Burning the RDF in three boilers, the facility will produce steam for sale to Detroit Edison.

The plant is being built and will be operated by Combustion under contract to GDRRA. GDRRA has in turn contracted with the City of Detroit for delivery of waste. The facility was funded by a $438 million bond issue. In addition to paying the debt service on the bonds issued to finance construction, the GDRRA must pay Combustion a fixed annual fee covering Combustion's labor and other costs and Combustion will pass through to GDRRA its expenses for fuel, insurance, maintenance, residue hauling and disposal, and other operating costs. The City, in turn, will pay a variable service fee to GDRRA reflecting whatever amount GDRRA owes to Combustion.

In November of 1984, the Michigan Department of Natural Resources ("MDNR") issued a permit authorizing construction of the project. The plaintiffs in these actions did not participate in the administrative proceedings leading to the issuance of the permit. The MDNR permit is required by the Michigan Air Pollution Act. Mich.Comp.Laws Ann. Secs. 336.11-336.36 (West 1980). That Act and the rules issued thereunder forbid any person to construct or operate an air contaminant source without permits from the Michigan Air Pollution Control Commission ("MAPCC").

The United States Environmental Protection Agency ("EPA") has determined that Michigan's state-permitting procedure satisfies certain Clean Air Act permitting requirements, and formally delegated permitting authority to the State of Michigan in 1980. Accordingly, the MDNR permit served as both the permit required by the Michigan Air Pollution Control Act and the permit required by the Clean Air Act ("CAA"). 42 U.S.C. Secs. 7401-7626.

On May 8, 1986, Detroit Audubon informed the EPA and the defendants that it considered the permit deficient and threatened a lawsuit should the EPA not revoke the permit. Detroit Audubon contended that the EPA had a nondiscretionary duty to prevent construction of the facility given the invalidity of the permit. On May 20, 1986, the EPA announced plans to commence administrative proceedings to review, modify, and/or revoke the previously issued permit. Combustion, the City of Detroit, and GDRRA then filed an action in the United States district court seeking to enjoin the planned rulemaking. Greater Detroit Resource Recovery Authority v. Adamkus, 677 F.Supp. 521 (E.D.Mich.1987). They contended that the EPA lacked authority to review a previously issued CSA permit at such a late date. That case was assigned to the same district judge who was later assigned the consolidated cases now before us on appeal.

Detroit Audubon and Ontario sought to intervene in Adamkus. Their motions were denied, however, because the district court concluded that the only issue in the case was the scope of the EPA's authority, not air quality generally, and that the plaintiffs therefore had no interest in the action. On October 21, 1986, the district court granted summary judgment against the EPA. It enjoined the agency from any action or attempt to revoke the facility's MDNR permit, and the EPA did not appeal from that judgment. The district court subsequently entered an order holding that the EPA's legal position was not substantially justified, that it had acted in bad faith, and that the defendants were therefore entitled to attorneys' fees and costs.

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Greater Detroit Resource Recovery Authority v. Adamkus, 677 F.Supp. 521, 528 (E.D.Mich.1987).

On April 15, 1987, Ontario and Detroit Audubon filed separate and independent actions in Wayne County, Michigan, Circuit Court. The Detroit Audubon complaint asserted two causes of action, both of which were based on the Michigan Environmental Protection Act ("MEPA"), Mich.Comp.Laws Ann. Secs. 691.1201-.1207 (West 1987). Count I alleged that the incinerator would pollute or impair the natural resources of the state of Michigan through emissions of air pollutants and through the disposal of ash residues. Count II alleged that the City of Detroit had failed to fulfill its duty under MEPA to determine whether there exist prudent and feasible solid waste disposal alternatives to construction of the incinerator and/or modifications to its design that would avoid or reduce environmental pollution. Ontario filed a similar though narrower MEPA complaint. The Ontario complaint challenged only the adequacy of the air pollution control equipment plan for the incinerator.

On April 24, 1987, the defendants removed both actions to the district court. Detroit Audubon and Ontario filed motions to remand asserting that their actions were based solely on state law. The district court denied the motions, holding that the CAA preempted the state law claims and concluded that the plaintiffs had engaged in "artful pleading" in a purposeful attempt to avoid federal court jurisdiction of a claim that was essentially federal in nature. The plaintiffs then moved for certification of the order denying remand for an immediate appeal to this court. The district court held this motion in abeyance pending a decision on the defendants' motion for summary judgment, which was filed on September 11, 1987. On December 31, 1987, Detroit Audubon filed a second motion to remand.

On February 24, 1988, the district court decided all pending motions. It granted defendants' motions for summary judgments in both actions, 696 F.Supp. 249, denied Detroit Audubon's second motion to remand, and denied both motions to certify the initial remand denial for interlocutory appeal.

The district court concluded that Ontario lacked standing to bring a suit under MEPA and, in any event, that Ontario's claims were barred by the doctrine of laches because of its delay in bringing its action. The court concluded that the aspects of the project were known to Ontario as early as September of 1984, and that the inexcusable delay was prejudicial to the defendants. Finally, the district court alternatively concluded that Ontario failed to state a claim under any legal theory, federal or state.

As to Detroit Audubon's claims, the district court concluded that they were also barred by laches for the same reasons as Ontario's action, and also held that Detroit Audubon had failed to state a claim under either federal or state law. Specifically, the district court concluded that both plaintiffs' claims were an attempt to have the court review the project's permit in...

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