Luminant Generation Co. v. United States Envtl. Prot. Agency
| Decision Date | 30 July 2012 |
| Docket Number | No. 10-60934,10-60934 |
| Parties | LUMINANT GENERATION CO. LLC, ET AL., Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Petitions for Review of Orders of the
Environmental Protection Agency
Before BENAVIDES, STEWART, and GRAVES, Circuit Judges.
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. § 7401et 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.
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 (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 (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 (). 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. See 40 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 dayfor 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).
In its final rule4 which became effective on January 10, 2011, the EPA partially approved and partially disapproved the most recent revision to Texas'sSIP 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. See 75 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) (). 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. See Approval 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 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 70,792-93. These policy statements can be found in a collection of memos that we will refer to as the "Bennett Memos" (19826 & 19837 ) the "Herman Memo" (19998 ). Id. at 70,792.
Additionally, in accordance with the EPA's request, 28 Tex. Reg. 5787, 5787 (July 25, 2003) (proposed), Texas's 2004 SIP revision omitted the language indicating that SSM emissions were "exempt," and substituted language that such emissions would be "subject to an affirmative defense." 29 Tex. Reg. 118, 120 (Jan. 2, 2004) (final). Further, as a result of changes in state law, Texas also distinguished between emissions resulting from planned SSM activity and all other emission events and proposed providing an affirmative defense for these emissions. Id. at 134 (§ 101.222(b),(c)). The proposed affirmative defense for scheduled SSM activity required the owner or operator prove "the period ofunauthorized emissions . . . could not have been prevented through planning and design." Id. at 134 (§ 101.222(c)(2)). All other emissions would only be protected if they were "caused by a sudden breakdown of equipment or process, beyond the control of the owner or operator." Id. at 134 (§ 101.222(b)(2)). The proposed rules stated that the affirmative defense provision would...
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