Communities for Better Envir. v. Cenco Refining

• Citation: 180 F.Supp.2d 1062
• Decision Date: 22 June 2001
• Docket Number: No. CV 00-5665 AHM(AIJx).,CV 00-5665 AHM(AIJx).
• Court: U.S. District Court — Central District of California
• Parties: COMMUNITIES FOR A BETTER ENVIRONMENT, Plaintiff, v. CENCO REFINING COMPANY, et al., Defendants.

180 F.Supp.2d 1062

COMMUNITIES FOR A BETTER ENVIRONMENT, Plaintiff, v. CENCO REFINING COMPANY, et al., Defendants.

No. CV 00-5665 AHM(AIJx).

United States District Court, C.D. California.

June 22, 2001.

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David A. Rosen, Gideon Kracov, Rose, Klein & Marias, Los Angeles, CA, Richard T. Drury, Anne E. Simon, William B. Rostov, Communities For A Better Environment Oakland, CA, Everett L. DeLano, III, Everett L. DeLano III Law Offices, Escondido, CA, J. Scott Kuhn, Communities For A Better Environment, Huntington Park, CA, for Plaintiff.

Kurt Weissmuller, Deanne L. Miller, Jocelyn D. N. Thompson, Weston, Benshoof, Rochefort, Rubalcava & MacCuish, Los Angeles, CA, Evelyn F. Heidelberg, Robert H. Conrrad, Jr., Latham & Watkins, Los Angeles, CA, Dean G. Dunlavey, Michael James Carroll, Latham & Watkins, Costa Mesa, CA, James E. Curry, George Gallegos, White, O'Connor, Curry, Gatti & Avanzado, Los Angeles, CA, for Cenco Refining Company and Robertson Charitable Remainder Unitrust.

Piero C. Dallarda, Jennifer T. Buckman, Best, Best & Krieger, Riverside, CA, Barbara B. Baird, Gloria L. White-Brown, Kurt R. Wiese, South Coast Air Quality Management District, Diamond Bar, CA, Gene Tanaka, Best, Best & Krieger, Sacramento, CA, for Barry R. Wallerstein, William A. Burke, Norma J. Glover, Michael D. Antonovich, Hal Bernson, Cynthia P. Coad, Beatrice J.S. Lapisto-Kirtley, Ronald O. Loveridge, Jon D. Mikels, Leonard Paulitz, and S. Roy Wilson,

Colin Lennard, Patricia Jean Chen, Fulbright & Jaworski, Los Angeles, CA, Steven Neil Skolnik, Steven Neil Skolnik Law Offices, Santa Monica, CA, for City of Santa Fe Springs.

James E. Curry, George Gallegos, White, O'Connor, Curry, Gatti & Avanzado, Los Angeles, CA, for MGMG "Pat" Robertson.

ORDER DENYING DEFENDANTS' MOTIONS TO DISMISS

MATZ, District Judge.

                                                    TABLE OF CONTENTS
                  I. INTRODUCTION .................................................................... 1067
                 II. FACTS ........................................................................... 1068
                     A. The Parties .................................................................. 1068
                     B. Legal Background ............................................................. 1068
                     C. CBE's Allegations of Fact .................................................... 1069
                     D. CBE's Causes of Action ....................................................... 1072
                III. ANALYSIS ........................................................................ 1073
                     A. Rule 12(b)(6) Standards ...................................................... 1073
                     B. Standing ..................................................................... 1074
                     C. Subject Matter Jurisdiction .................................................. 1076
                        a. CBE Alleges Violations of Specific, Concrete State Implementation
                            Plan Provisions .......................................................... 1077
                        b. An Alleged Violation of SIP Provisions Requiring the Application of
                            Best Available Control Technology and New Source Review to New
                            Facility Permit Applications Constitutes Violation of "Any Other
                            Standard, Limitation or Schedule Established under Any Applicable
                            State Implementation Plan" and "Any Requirement to Obtain a
                            Permit" Under Section 7604 ............................................... 1080
                     D. Claims Under SIP Rules 209 and 806 ........................................... 1084
                        a.  Rule 209 ................................................................. 1084
                        b.  Rule 806 ................................................................. 1085
                     E. Exhaustion of Administrative Remedies ........................................ 1086
                     F. Abstention ................................................................... 1087
                     G. Supplemental State Law Claims ................................................ 1087
                        a.  Common Nucleus of Operative Facts ........................................ 1088
                        b.  Failure to Join a Party Under Rule 19 .................................... 1089
                

                 IV. CONCLUSION ...................................................................... 1089
                

I. INTRODUCTION

This lawsuit stems from the reactivation and proposed modification of a petroleum refinery located in the City of Santa Fe Springs, California. In August 1998, Defendant Cenco Refining Company ("Cenco") purchased the 65-year old refinery from a previous owner who had not operated the facility for several years. Cenco applied for and the South Coast Air Quality Management District ("SCAQMD") granted the reactivation and transfer of the previous owner's operator's permit to Cenco. Cenco then proposed a Refinery Expansion Project ("Refinery Project" or "Refinery Upgrade Project") to the City of Santa Fe Springs, which the City certified in July 2000. Within 30 days of the City's certification, Plaintiff Communities for a Better Environment ("CBE") filed suit against Cenco, SCAQMD and the City, alleging violations of the federal Clean Air Act ("CAA") and the California Environmental Quality Act ("CEQA").

CBE's First Amended Complaint is a 62 page document with 25 pages of exhibits. It asserts thirteen total causes of action: eight under the CAA against Cenco and SCAQMD for failure to comply with federal and state permitting rules requiring that the reactivated facility undergo "New Source Review" and submit to stringent environmental controls and cost-benefit analyses; and five supplemental claims under state law against the City for approving the expansion project without properly considering the violation of the permitting rules and the necessity of New Source Review as required by CEQA.

Before the Court are four separate motions to dismiss brought by the defendants: Cenco and SCAQMD filed separate motions to dismiss CBE's CAA claims and the City filed two separate motions to dismiss CBE's CEQA claims.

Defendants assert the following grounds for dismissal: CBE has no standing because although CBE members have apprehended foul odors from current facility operations, the facility is not yet refining petroleum again; CBE fails to state claims under the CAA because violations of permitting requirements do not constitute violations of "emission standards or limitations" under the CAA Citizen Suit Provision; CBE has not exhausted its administrative remedies because, although it complied with all procedural requirements of the CAA, it did not pursue administrative appeal of SCAQMD's transfer of the operator's permit; properly interpreted, applicable permitting rules do not preclude the reactivation and transfer of expired permits under the circumstances here; this Court should not hear this case until the D.C. Circuit Court of Appeals decides Cenco's challenge, filed after this suit, to EPA's "reactivation policy" regarding "shutdown" facilities; this Court has no supplemental jurisdiction over CBE's state law claims because they address permits and agencies different than the CAA claims; and CBE's state law claims fail because although Cenco, a necessary party, is a named party to this suit, its name does not appear in the headings of the state law claims.

As the Court construes it, the key issue in these motions is whether a citizen suit under the Clean Air Act may be premised on allegations that a refinery should have been but was not subjected to the CAA's stringent New Source Review standards during the federally mandated permitting process.

For the reasons set forth below, the Court DENIES defendants' motions to dismiss.

II. FACTS

A. The Parties

Plaintiff CBE is a California non-profit environmental health and justice organization with approximately 20,000 members in California. First Amended Complaint ("FAC"), ¶ 19. CBE's organizational goals include protecting and enhancing the environment and public health by reducing air pollution in California's urban areas. Id.

Defendant Cenco Refining Co. was established in March 1998 with the purpose of acquiring the refinery. Id. at ¶ 27. Cenco, Inc. is a corporation that owns and controls Cenco Refining Co. Id. at ¶ 28.

Defendant SCAQMD is the California state agency responsible for the adoption and enforcement of certain rules to attain and maintain the air quality standards set under the CAA in the South Coast Air Basin. Id. at ¶ 42.

Defendant City is a municipality or a general law city in the County of Los Angeles. Id. at ¶ 45. The City is the lead agency responsible under CEQA for evaluating the environmental impact of the Refinery Project. Id.

B. Legal Background

Congress passed the CAA to prevent pollution and protect and enhance the quality of national air resources. 42 U.S.C. § 7401. The CAA sets out a regulatory scheme designed to prevent and control air pollution. It directs the Environmental Protection Agency ("EPA") to prescribe national ambient air quality standards ("NAAQS") at a level sufficient to protect the public health and welfare. 42 U.S.C. § 7409(a)-(b).

Each state is required to develop a state implementation plan ("SIP") to achieve the NAAQS established by the EPA. 42 U.S.C. § 7410(a). The EPA may approve an implementation plan submitted by a state only if the plan meets all of the requirements of the CAA. 42 U.S.C. § 7410(a)(3)(A), 7502(b). Once approved by the EPA, the requirements and commitments of a SIP become binding as a matter of federal law upon the state. 42 U.S.C. § 7413(a)(2).

In 1977, Congress amended the Clean Air Act to provide more stringent requirements for those geographical areas ("non-attainment areas") that had failed to meet federal standards for pollution control. 42 U.S.C. § § 7501-08. In the 1977 amendments, Congress required those states that had failed to meet federal standards for pollution control to submit revised SIPs to the EPA. 42 U.S.C. §...