Luminant Generation Co. v. U.S. Envtl. Prot. Agency

Decision Date25 March 2013
Docket NumberNo. 10–60934.,10–60934.
Citation714 F.3d 841
PartiesLUMINANT GENERATION CO. LLC, et al., Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.
CourtU.S. Court of Appeals — Fifth Circuit

OPINION TEXT STARTS HERE

Philip Stephen Gidiere, III, Esq., Thomas Lee Casey, III, Steven G. McKinney, Esq., Balch & Bingham, L.L.P., Birmingham, AL, Harry Max Reasoner, Esq., Vinson & Elkins, L.L.P., Charles William Irvine, Blackburn Carter, P.C., Houston, TX, Eric Alan White, Vinson & Elkins, L.L.P., Washington, DC, Kelly Leigh Haragan, Esq., Austin, TX, for Petitioners.

Matthew Robert Oakes, Matthew Brian Henjum, Esq., U.S. Department of Justice, Environment & Natural Resources Division, Scott Fulton, Environmental Protection Agency, Washington, DC, for Respondent.

Samara Lackman Kline, Anika Christine Stucky, Baker Botts, L.L.P., Dallas, TX, Matthew Lynn Kuryla, Baker Botts, L.L.P., Houston, TX, Matthew G. Paulson, Katten Muchin Rosenman, L.L.P., Austin, TX, for Intervenor.

Jon Niermann, Esq., Assistant Attorney General, Office of the Attorney General, for the State of Texas, Austin, TX, for Amicus Curiae.

On Petitions for Review of a Final Rule of the United States Environmental Protection Agency.

Before STEWART, Chief Judge, and BENAVIDES and GRAVES, Circuit Judges.

CARL E. STEWART, Chief Judge:

IT IS ORDERED that the opinion previously filed in this case, Luminant Generation Co. L.L.C. v. U.S. E.P.A., No. 10–60934, 699 F.3d 427 (5th Cir. Oct. 12, 2012), is WITHDRAWN. The following opinion is substituted therefor:

Two sets of petitioners, hereinafter referred to as “Industry Petitioners 1 and “Environmental Petitioners,” 2 seek review of the United States Environmental Protection Agency's (EPA) final rule partially approving and partially disapproving the most recent revision to Texas's State Implementation Plan (“SIP”) submitted by the Texas Commission on Environmental Quality (“TCEQ”) pursuant to the Clean Air Act (“CAA” or the Act), 42 U.S.C. § 7401 et seq.3 Because we find that the EPA did not act arbitrarily or capriciously, or contrary to law, or in excess of its statutory authority, in its partial approval and partial disapproval of Texas's SIP revision, we deny both petitions for review.

I. BACKGROUND
A. Statutory Background

The CAA “establishes a comprehensive program for controlling and improving the nation's air quality through state and federal regulation.” BCCA Appeal Grp. v. EPA, 355 F.3d 817, 821–22 (5th Cir.2003). Under the CAA, the EPA is responsible for identifying air pollutants and establishing National Ambient Air Quality Standards (“NAAQS”) which specify maximum allowable levels of certain types of pollutants in the air. Id. at 822; 42 U.S.C. §§ 7408–7409. The states are then permitted, “within limits established by [the NAAQS], to enact and administer their own regulatory programs, structured to meet their own particular needs.” Hodel v. Virginia Surface Mining and Reclamation Ass'n, 452 U.S. 264, 289, 101 S.Ct. 2352, 69 L.Ed.2d 1 (1981). This federal-state partnership is often described as “cooperative federalism.” Id.

To comply with its responsibilities under the Act, each state must create and administer a SIP which provides for the “implementation, maintenance, and enforcement” of NAAQS by setting “emission limitations and other control measures.” 42 U.S.C. § 7410(a)(1)-(2). The states have “wide discretion” in formulating their SIPs, Union Elec. Co. v. EPA, 427 U.S. 246, 250, 96 S.Ct. 2518, 49 L.Ed.2d 474 (1976), including the “broad authority to determine the methods and particular control strategies they will use to achieve the statutory requirements.” BCCA Appeal Grp., 355 F.3d at 822 (citing Union Elec. Co., 427 U.S. at 266, 96 S.Ct. 2518 (“So long as national standards are met, the state may select whatever mix of control devices it desires.”)). Once a state creates or revises a SIP, it is submitted to the EPA for review. 42 U.S.C. § 7410(a)(1), (k)(1)-(2).

The Act confines the EPA to the ministerial function of reviewing SIPs for consistency with the Act's requirements. Id. at § 7410(k)(3). The EPA must approve the plan in its entirety if it meets the applicable requirements of the Act. Id. at § 7410(k)(3); Fla. Power & Light Co. v. Costle, 650 F.2d 579, 587 (5th Cir.1981). If only “a portion of the [SIP] meets all the applicable requirements of [the Act],” the EPA “may approve the [submittal] in part and disapprove the [submittal] in part.” 42 U.S.C. § 7410(k)(3). The EPA may also provide “conditional approval” of a SIP, “based on a commitment of the State to adopt specific enforceable measures by a date certain, but not later than 1 year after the date of approval of the plan revision.” Id. at § 7410(k)(4).

States must periodically revise their SIPs as necessary to ensure continuing compliance with current NAAQS. Id. at § 7410(a)(2)(H). The EPA must review and approve or disapprove a SIP revision within 18 months of submission. Id. at §§ 7410(k)(1)(B), (2)-(3). The EPA shall disapprove a SIP revision only if “the revision would interfere with any applicable requirement concerning attainment” of the NAAQS “or any other applicable requirement” of the Act. Id. at § 7410( l ). If the revision meets all of the applicable CAA requirements, the EPA “shall approve such submittal as a whole.” Id. at § 7410(k)(3). Once approved by the EPA as meeting the requirements of the Act, the SIP, or the approved portion thereof, is incorporated by reference into the Code of Federal Regulations. See40 C.F.R. § 52.02 (2011).

The CAA provides for shared enforcement of SIPs. A state must include in its SIP, a “program to provide for the enforcement” of the plan. 42 U.S.C. § 7410(a)(2)(C). The program must provide the state permitting authority power to “recover civil penalties in a maximum amount of not less than $10,000 per day for each violation.” Id. at § 7661a(b)(5)(E). Additionally, the EPA has the power to enforce a SIP by commencing “a civil action for a permanent or temporary injunction, or to assess and recover a civil penalty of not more than $25,000 per day for each violation, or both[.] Id. at § 7413(b). Such suit may be brought in district court, “and such court shall have jurisdiction to restrain such violation, to require compliance, to assess such civil penalty, to collect any fees owed to the United States ... and to award any other appropriate relief.” Id. Finally, any person may commence a civil action on his own behalf against any person who is alleged to have violated an emission standard or limitation in a SIP. Id. at § 7604(a). A citizen suit may be brought in district court, which shall have jurisdiction to enforce such an emission standard or limitation and to apply any appropriate civil penalties. Id.

In assessing the amount of a civil penalty in either an EPA enforcement action or a citizen suit, the court must consider the penalty assessment criteria outlined in section 7413(e), i.e., the size of the business, the economic impact of the penalty on the business, the violator's full compliance history and good faith efforts to comply, the duration of the violation as established by any credible evidence (including evidence other than the applicable test method), payment by the violator of penalties previously assessed for the same violation, the economic benefit of noncompliance, the seriousness of the violation, and “other factors as justice may require.” Id. at § 7413(e).

B. Facts and Proceedings

In its final rule 4 which became effective on January 10, 2011, the EPA partially approved and partially disapproved the most recent revision to Texas's SIP which was submitted by the TCEQ in 2006.5 The portion of the SIP at issue creates an affirmative defense against civil penalties for excess emissions during both planned and unplanned startup, shutdown, and maintenance/malfunction (“SSM”) events. The EPA approved the portion of the SIP revision providing an affirmative defense against civil penalties for unplanned SSM events and disapproved the portion of the SIP revision providing an affirmative defense against civil penalties for planned SSM events. See75 Fed.Reg. 68,989, 68,991.

Since the creation of its first SIP in 1972, Texas has provided for special treatment of SSM activity. See Tex. SIP § XIV, Rule 12 (Jan. 26, 1972) (providing emissions during “upsets” and “start-up or shutdown ... may not be required to meet the allowable emission levels”). The revised SIP submitted by Texas in 2000 provided that emissions from SSM activity were “exempt from compliance with air emission limitations established in permits, rules, and orders of the commission” so long as the owner or operator complied with certain reporting, record keeping, and operational requirements. See General Air Quality Rules, 25 Tex. Reg. 6727, at § 101.11(b) (July 14, 2000). Further, the exceptions were limited to SSM emissions that “could not have been prevented through planning and design,” that “were not part of a recurring pattern,” and that did “not cause or contribute to a condition of air pollution.” See id.

The EPA approved the 2000 SIP revision, determining that the exemptions for emissions during SSM activity contained in the plan met the requirements of the CAA. SeeApproval and Promulgation of Implementation Plans; Texas; Excess Emissions During Startup, Shutdown, Malfunction and Maintenance, 65 Fed.Reg. 70,792 (Nov. 28, 2000). In its approval, the EPA noted that “under the [CAA], all excess emissions during SSM episodes are violations of applicable emission limitations [however,] we believe it would be inequitable to penalize a source for occurrences beyond the company's control. A source has the burden of proving that the excess emissions were due to circumstances beyond the control of the operator or the owner.” Id. at 70,793. Additionally, the EPA found that the 2000 SIP revision comported with past EPA guidance contained in its policy statements regarding emissions from SSM activity. Id. at...

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