AES P.R., L.P. v. Trujillo-Panisse

• Decision Date: 01 October 2015
• Docket Number: Civil No. 14–1767 (FAB).
• Citation: 133 F.Supp.3d 409
• Parties: AES PUERTO RICO, L.P., Plaintiff, v. Marcelo TRUJILLO–PANISSE, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

133 F.Supp.3d 409

AES PUERTO RICO, L.P., Plaintiff,

v.Marcelo TRUJILLO–PANISSE, et al., Defendants.

Civil No. 14–1767 (FAB).

United States District Court, D. Puerto Rico.

Signed Oct. 1, 2015.

David T. Buente, Paul J. Sampson, Paul J. Zidlicky, Samuel B. Boxerman, Sidley Austin LLP, Washington, DC, Melissa Hernandez–Carrasquillo, Jose L. Ramirez–Coll, Fiddler Gonzalez & Rodriguez, P.S.C., San Juan, PR, for Plaintiff.

Francisco J. Medina–Medina, San Juan, PR, For Defendant.

OPINION AND ORDER

BESOSA

, District Judge.

Two Puerto Rican municipalities passed ordinances restricting the use of ash derived from coal combustion within their territorial borders. AES Puerto Rico, L.P. ("AES–PR"), a coal-fired power plant owner, filed suit against the municipalities to challenge the legality of the ordinances. (Docket No. 1.)

Currently before the Court are AES–PR's motion for partial summary judgment on its preemption claims, (Docket No. 29), which defendants oppose, (Docket No. 40), as well as AES–PR's unopposed requests for judicial notice, (Docket No. 32; Docket No. 49 at p. 9). Also before the Court is defendants' motion for judgment on the pleadings on justiciability grounds, (Docket No. 37), which AES–PR opposes, (Docket No. 45).

For the reasons below, the Court GRANTS AES–PR's requests for judicial notice, (Docket No. 32; Docket No. 49 at p. 9), DENIES defendants' motion for judgment on the pleadings, (Docket No. 37), and DENIES AES–PR's motion for partial summary judgment, (Docket No. 29).

BACKGROUND

Plaintiff AES–PR owns and operates a coal-fired power plant in Guayama, Puerto Rico (the "Guayama facility"). (Docket No. 31 at ¶ 2.) The Guayama facility imports coal from outside of Puerto Rico, primarily from Colombia, which it burns to generate electricity. (Docket No. 1 at ¶¶ 20, 25.) AES–PR sells this electricity to the Puerto Rico Electric Power Authority ("PREPA"). Id. at ¶¶ 22–23. Pursuant to its arrangement with PREPA, AES–PR satisfies approximately fifteen percent of Puerto Rico's total electric power needs. Id. at ¶ 21.

The combustion of coal produces two types of ashes: bottom ash and fly ash,¹ which are collectively referred to as coal combustion residuals ("CCRs"). (Docket No. 31 at ¶ 3.) When coal is burned at the Guayama facility, AES–PR collects the CCRs and transports them to storage silos on the premises. (Docket No. 1 at ¶ 26.) AES–PR produces approximately 200,000 to 250,000 tons of CCRs per year. Id. at ¶ 27.

AES–PR uses the CCRs from the Guayama facility to produce coal combustion products ("CCPs"), including a manufactured aggregate product (sometimes referred to as "rock ash"), which AES–PR markets under the trade name AGREMAX0 ("Agremax"). See Docket No. 1 at ¶¶ 30–31; Docket No. 31 at ¶ 4.² According to AES–PR, Agremax can be "beneficially used" in several ways. (Docket No. 1 at ¶ 33.) For example, Agremax can be used in the construction industry as "structural fill" and for transportation projects as "subbase material" for roads. Id. at ¶¶ 3, 33. Agremax also has waste treatment applications: it can be used for liquid waste solidification and as "daily cover" for solid waste landfills, meaning Agremax (instead of natural materials like soil) is placed every day on top of the solid waste deposited in the landfill. See id.; Docket No. 31 at ¶ 20.

AES–PR currently has contracts with landfills in Puerto Rico to provide Agremax for use as an alternative daily cover. (Docket No. 31 at ¶ 20.) For example, AES–PR has agreements with El Coqui Landfill Company LLC ("Coqui Waste"), Ecosystems, Inc. ("Ecosystems Waste"), and Peñuelas Valley Landfill Company, Inc. ("PV Waste") to provide CCPs—including Agremax—for beneficial use at El Coqui Landfill (the "Coqui Landfill") in Humacao, Ecosystems Landfill in Peñuelas,³ and Peñuelas Valley Landfill (the "PV Landfill") in Peñuelas, respectively. See Docket No. 31 at ¶¶ 19, 21; Docket No. 51 at p. 3.

The Ordinances

Two municipalities in Puerto Rico enacted ordinances restricting the use of coal ash within their territorial borders. These ordinances are the subject of this suit. On April 10, 2013, the Municipality of Peñuelas adopted Ordinance Number 13, Series 2012–2013 (the "Peñuelas Ordinance"), which provides:

The use of ashes coming from the burning of coal, in energy generating plants, as landfill material and its depositing on lands within the territorial limits of the Municipality of Peñuelas is forbidden.

(Docket No. 32–2 at p. 8, § 1 (emphasis added).)

On February 10, 2014, the Municipality of Humacao adopted Ordinance Number 21, Series 2013–2014 (the "Humacao Ordinance"), which provides:

Any kind of use of the ash derived from coal combustion in electric power generating plants or any other industrial or commercial activity as filler material, whether to level the terrain, for landfills, or in any other kind of filler, is hereby prohibited within the territorial limits of the Autonomous Municipality of Humacao.

(Docket No. 32–1 at p. 9, § 1 (emphasis added).)

Violators of either ordinance are subject to administrative fines up to $5,000. Id. at p. 10, § 6; Docket No. 32–2 at p. 8, § 1.

Both Ordinances are aimed specifically at curbing AES–PR's use of coal ash. They each discuss AES–PR's extensive use of coal ash on the island of Puerto Rico over the past few years, noting that coal ashes have been used in various municipal projects, from rural and agricultural lands to residential roads, and that in many of these places, coal ashes were deposited near aquifers. See Docket No. 32–1 at p. 8; Docket No. 32–2 at p. 7. They each express concern over the implications of this pervasive use, describing the findings of a 2010 study in which samples of CCR filler taken from the Parque Gabriela Development of Salinas showed high concentrations of carcinogenic and toxic metals, including arsenic and lead, and excessive radiation levels.⁴ See Docket No. 32–1 at p. 9; Docket No. 32–2 at p. 7. Both Ordinances provide examples of possible damage to the environment and human health involving AES–PR's use of coal combustion byproducts in places outside of Puerto Rico, including Tennessee and the Dominican Republic. See Docket No. 32–1 at p. 9; Docket No. 32–2 at p. 7.

The Lawsuits in Commonwealth Court

Since the enactment of the Ordinances, the Municipality of Peñuelas and the Municipality of Humacao have each filed lawsuits in Commonwealth Court against parties with which AES–PR has ongoing contracts. See Docket No. 49 at p. 9. In August 2014, the Municipality of Peñuelas brought suit against Ecosystems Waste seeking to enjoin the use of Agremax in the construction of the Ecosystems Landfill in Peñuelas. (Docket No. 49–3.) The Peñuelas complaint alleges that Ecosystems Waste used Agremax in the construction of the landfill's access road and, in doing so, violated the Peñuelas Ordinance by "disposing of and/or depositing" the filler material on the ground. Id. at p. 4. Similarly, in October 2014, the Municipality of Humacao filed suit against Coqui Waste seeking a permanent cease and desist order to prevent the deposit of AES–PR's coal ash material in the Coqui Landfill. (Docket No. 49–2.)

Shortly thereafter, AES–PR initiated this action.

Procedural History

On October 16, 2014, AES–PR filed suit in this Court against the Municipality of Peñuelas, its Mayor, Walter Torres–Maldonado ("Mayor Torres") (collectively, the "Peñuelas defendants"), the Municipality of Humacao, and its Mayor, Marcelo Trujillo–Panisse ("Mayor Trujillo") (collectively, the "Humacao defendants"), challenging the municipal restrictions on CCRs in Peñuelas and Humacao. (Docket No. 1.) Among other things, AES–PR contends that the Environmental Protection Agency (the "EPA"), pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.

("RCRA"), and Puerto Rico's Environmental Quality Board (the "EQB"), pursuant to parallel Commonwealth law, P.R. Laws Ann. tit. 12 §§ 8001 et seq., authorize and encourage the beneficial use of CCRs. See id. at pp. 11–15. AES–PR contends that because the Ordinances conflict with this authority, the Ordinances violate the federal Supremacy Clause, are void and ultra vires under Puerto Rico law, and are preempted by Puerto Rico law. See id. at ¶¶ 102–12 (federal preemption), ¶¶ 133–39 (void and ultra vires ), ¶¶ 140–47 (state preemption).⁵ AES–PR requests injunctive and declaratory relief in addition to damages. Id. at ¶ 6.

On January 2, 2015, defendants answered the complaint. (Docket No. 22.) In their answer, they admit that the Humacao and Peñuelas Ordinances both "ban [ ] the use of ash resulting from the burning of coal anywhere within the territorial limits" of Humacao and Peñuelas. Id. at ¶¶ 16, 21.

On May 15, 2015, AES–PR moved for summary judgment on its federal and state preemption claims. (Docket No. 29.)

On May 26, 2015, defendants moved for judgment on the pleadings. (Docket No. 37.) Defendants argue that AES–PR lacks standing to challenge the legality of the Ordinances and that AES–PR's claims against the Peñuelas defendants are unripe and untimely. Id. AES–PR opposed defendants' motion. (Docket No. 45.)

On June 3, 2015, defendants opposed AES–PR's motion for partial summary judgment, (Docket No. 40), to which AES–PR replied on June 17, 2015. (Docket No. 49.) On June 30, 2015, AES–PR then filed a motion to supplement the summary judgment record and to request expedited consideration or hearing. (Docket No. 51.) AES–PR informed the Court that on June 26, 2015 the Peñuelas defendants, citing the Peñuelas Ordinance, "prevented the lawful delivery of [Agremax]" to the PV Landfill. Id. at p. 1.⁶ On July 7, 2015, AES–PR filed a second motion to supplement the summary judgment record in order to submit a copy of an EQB resolution interpreting the PV Landfill's Operating Plan, (Docket No. 55), and defendants filed a response, (Docket No. 56.) The following day, on July 8, 2015, the Court held a hearing to discuss the events in Peñuelas and the issue of preemption. (Docket ...