Consol. Envtl. Mgmt., Inc. v. Zen-Noh Grain Corp.

• Decision Date: 04 November 2013
• Docket Number: CIVIL ACTION NO: 12-1011,c/w 12-1738
• Parties: CONSOLIDATED ENVIRONMENTAL MANAGEMENT, INC. - NUCOR STEEL LOUISIANA v. ZEN-NOH GRAIN CORPORATION
• Court: U.S. District Court — Eastern District of Louisiana

CONSOLIDATED ENVIRONMENTAL MANAGEMENT, INC. - NUCOR STEEL LOUISIANA v. ZEN-NOH GRAIN CORPORATION

CIVIL ACTION NO: 12-1011

c/w 12-1738

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA SECTION: R(4)

Dated: November 4, 2013

ORDER AND REASONS

Before the Court are defendant Zen-Noh Grain Corporation's ("Zen-Noh") motions to exclude the testimony of Timothy Desselles,¹ Stephen Mattison,² Kimberly McIntyre,³ Anna Migliore,⁴ Yousheng Zeng, Ph.D.,⁵ Bill Palermo,⁶ and Don Elias,⁷ as well as its motion for summary judgment.⁸ Also before the Court is plaintiff Consolidated Environmental Management Inc. - Nucor Steel Louisiana's ("Nucor") motion in limine to preclude Zen-Noh from introducing testimony or other evidence regarding Title Vpermitting issues or "potential to emit" calculations.⁹ For the following reasons, Zen-Noh's motions to exclude the testimony of Timothy Desselles, Stephen Mattison, Kimberly McIntyre, and Anna Migliore are granted. Zen-Noh's motion for summary judgment is also granted, and the remaining motions are denied as moot.

I. STATUTORY BACKGROUND

Congress created the Clean Air Act "to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare." 42 U.S.C. § 7401(b)(1). The Clean Air Act, 42 U.S.C. §§ 7401, et seq., is a comprehensive program for controlling and improving the nation's air quality. Under the Act, the Environmental Protection Agency ("EPA") identifies air pollutants that endanger the public health or welfare, determines the concentrations of those pollutants that are safe and promulgates those determinations as national ambient air quality standards ("NAAQS"). See 42 U.S.C. §§ 7408, 7409. Each state must ensure that its ambient air meets the appropriate NAAQS, see 42 U.S.C. § 7407(a), and must develop a state implementation plan ("SIP") to achieve the standards established by the EPA. See 42 U.S.C. § 7410(a). The Act requires state implementation plans to include "enforceable emission limitations and other control measures, means, or techniques . . . as well as schedules andtimetables for compliance" to meet the NAAQS. 42 U.S.C. § 7410(a)(2)(A). Upon approval by the EPA, the state implementation plan becomes federally enforceable. Louisiana Envtl. Action Network v. EPA, 382 F.3d 575, 579 (5th Cir. 2004); Kentucky Res. Council, Inc. v. EPA, 304 F.Supp.2d 920, 923 (W.D. Ky. 2004); Sweat v. Hull, 200 F.Supp.2d 1162, 1164 (D. Ariz. 2001). For entities regulated under the Act, "[t]he burden is clearly on the source to do whatever is necessary to assure compliance." Emission Offset Interpretative Ruling, 45 Fed. Reg. 59,874, 59,877 (Sept. 11, 1980) (codified at 40 C.F.R. Part 51).

The Act also requires the EPA to develop new source performance standards to govern emissions of air pollutants from facilities that are constructed or modified after the publication of regulations. 42 U.S.C. § 7411(a)(2), (f). After the EPA promulgates a new source performance standard, it is "unlawful for any owner or operator of any new source to operate such source in violation of any standard of performance applicable to such source." 42 U.S.C. § 7411(e). Relevant here are the performance standards for grain elevators set out in 40 C.F.R. Part 60, Subpart DD, and in particular, the 20% opacity limitation for fugitive emissions from ship and barge loading operations set out in 40 C.F.R. § 60.302(c)(4). The EPA developed and approved "Method 9," incorporated into the federal regulations at 40 C.F.R. Part 60, App. A, as the appropriatereference test for determining compliance with this 20% opacity limit. 40 C.F.R. § 60.11(b).

Louisiana's EPA-approved Clean Air Act implementation plan, which has been incorporated into the federal regulations at 40 C.F.R. § 52.970, requires a permit for the discharge of air pollutants. La. Rev. Stat. Ann. § 30:2055. The Secretary of the Louisiana Department of Environmental Quality ("LDEQ") issues permits in accordance with federal and state law and LDEQ regulations. Id. § 30:2054. Louisiana's implementation plan prohibits the discharge of "air contaminants ... into the air of this state in violation of regulations of the secretary or the terms of any permit, license, or variance." Id. § 30:2057. The regulations include a 20% opacity limit for particulate matter from sources including barge and ship loaders, "except the emissions may have an average opacity in excess of 20 percent for not more than one six-minute period in any 60 consecutive minutes." La. Admin. Code tit. 33:III § 1311.C. The plan also provides that "[n]oncompliance with any term or condition of the permit shall constitute a violation of this Chapter and shall be grounds for enforcement action, for permit revision or termination, or for denial of a permit renewal application." Id. § 501.C.4. Finally, Louisiana's implementation plan also incorporates by reference EPA's new source performance standards, including the 20% opacity limitation of 40 C.F.R. § 60.302(c)(4).See id. § 3003.

The Clean Air Act includes a citizen suit provision that allows citizens to request injunctive relief and civil penalties of up to $32,500 per violation per day, payable to the United States Treasury, for the violation of any "emission standard or limitation" under the Act. 42 U.S.C. § 7604(a); see 40 C.F.R. § 19.4. Citizen suits may be brought against any person "who is alleged to have violated (if there is evidence that the alleged violation has been repeated) or to be in violation" of "any emission standard or limitation" under the Clean Air Act. 42 U.S.C. § 7604(a)(1). Emissions standards or limitations include: (1) any condition or requirement of a permit promulgated under the Clean Air Act, including provisions of state implementation programs, and (2) new source performance standards promulgated under 42 U.S.C. § 7411. 42 U.S.C. § 7604(f); Kentucky Res. Council, 304 F.Supp.2d at 926. The Act also authorizes federal district courts to enforce emission standards or limitations and to impose appropriate civil penalties. 42 U.S.C. § 7604(a).

Louisiana law also contains a citizen suit provision that allows "any person having an interest, who is or may be adversely affected, [to] commence a civil action on his own behalf against any person whom he alleges to be in violation" of Title 30, Subtitle II of the Louisiana Revised Statutes, which governs environmental quality, and the regulations promulgatedthereunder, including the Louisiana SIP. La. Rev. Stat. Ann. § 30:2026(A)(1). The statute authorizes a court to grant temporary or permanent injunctive relief and to assess a civil penalty not to exceed ten thousand dollars for each day of the continued noncompliance. Id. § 30:20206(A)(2). The court may also award actual damages, costs, and attorneys fees to the prevailing party. Id. § 30:20206(A)(3). Like the citizen suit provision under the Clean Air Act, the Louisiana statute contains a notice provision that requires the plaintiff to give written notice of the violation to the Secretary of the LDEQ 30 days prior to commencing suit. Id. § 30:2026(B)(1).

II. FACTUAL BACKGROUND

The parties in this case are feuding neighbors with property next to each other on the Mississippi River in St. James Parish. Nucor is constructing a steel production facility that Zen-Noh has vigorously opposed. Zen-Noh was the first to bring the conflict between the parties into federal court. In 2009, Zen-Noh sought to enjoin the LDEQ from issuing air permits for a pig iron plant to Nucor. Then, in 2012, Zen-Noh sought to enjoin Nucor from constructing the first of two direct reduced iron plants under authority of other air permits issued by LDEQ to Nucor. Zen-Noh has also contested LDEQ actions granting Nucor permits for its steel plants and sued the EPA for objecting to, butfailing to revoke, Nucor's air permits.

Seizing the offensive, Nucor filed the complaint in this action alleging that Zen-Noh has itself run afoul of federal and state air quality laws in the operation of its grain elevator. On April 30, 2012, Nucor issued a notice letter to Zen-Noh, the LDEQ, and the EPA alleging violations of the CAA and the Louisiana SIP. Nucor filed its original complaint against Zen-Noh on July 3, 2012. That suit, Civil Action No. 12-1738, was consolidated with Zen-Noh's suit against Nucor under Civil Action No. 12-1011. Zen-Noh moved to dismiss the Nucor complaint.¹⁰ Nucor then filed its 38-page, nine-count First Amended Complaint.¹¹ Relevant here are the allegations of Counts IV and VI of the Amended Complaint.

Count IV alleged that Method 9 opacity readings of Zen-Noh's ship and barge loading operations revealed "significant violations" of the 20% opacity standards found at 40 C.F.R. § 60.302(c)(4) and La. Admin. Code tit. 33:III, § 1311.C. Because Specific Condition No. 4 of the Air Permit issued to Zen-Noh by the LDEQ required Zen-Noh to comply with the new source performance standards for grain elevators, including Section 60.302(c)(4), Nucor also alleged a violation of the Air Permit. Similarly, Specific Condition No. 12 required Zen-Noh to complywith the Louisiana SIP provisions governing particulate emissions, including Section 1311.C, so Nucor also alleged a violation of the Air Permit on that basis. Nucor further alleged that the violations of the Air Permit violated La. Rev. Stat. Ann. §§ 30:2055 and 2057, and that the violations of the Louisiana SIP provisions and emissions limits incorporated into the Air Permit violated Sections 110 and 113 of the CAA, 42 U.S.C. §§ 7411 and 7413.

Count VI and the supporting allegations focus on Zen-Noh's emissions of particulate matter with a diameter less than 10µ ("PM-10"). Nucor contends that Zen-Noh "overestimated the particulate control efficiency of several of its loading and unloading operations in its permit application upon which the current Air Permit is based and thus, underestimated both its potential and actual emissions."¹² Nucor alleges that "[t]o the...