Sierra Club v. Franklin County Power of Illinois

• Court: U.S. Court of Appeals — Seventh Circuit
• Writing for the Court: Williams
• Citation: Sierra Club v. Franklin County Power of Illinois, 546 F.3d 918 (7th Cir. 2008)
• Decision Date: 27 October 2008
• Docket Number: No. 06-4045.,06-4045.
• Parties: SIERRA CLUB, Plaintiff-Appellee, v. FRANKLIN COUNTY POWER OF ILLINOIS, LLC, formerly known as EnviroPower of Illinois, LLC, EnviroPower, LLC, and Khanjee Holding (US), Inc., Defendants-Appellants.

546 F.3d 918

SIERRA CLUB, Plaintiff-Appellee, v. FRANKLIN COUNTY POWER OF ILLINOIS, LLC, formerly known as EnviroPower of Illinois, LLC, EnviroPower, LLC, and Khanjee Holding (US), Inc., Defendants-Appellants.

No. 06-4045.

United States Court of Appeals, Seventh Circuit.

Argued October 29, 2007.

Decided October 27, 2008.

Lester A. Pines, Kira E. Loehr (argued), Cullen, Weston, Pines & Bach, Madison, WI, for Plaintiff-Appellee.

Nathan Z. Dershowitz (argued), Dershowitz, Eiger & Adelson, New York, NY, Stephen M. Soble, Soble International Law, Washington, DC, for Defendants-Appellants.

Before BAUER, RIPPLE, and WILLIAMS, Circuit Judges.

WILLIAMS, Circuit Judge.

Franklin County Power of Illinois, LLC, wants to build a coal power plant in southern Illinois. Because the plant will emit a significant amount of air pollution, the Company must first obtain a "Prevention of Significant Deterioration" (PSD) permit from the Illinois Environmental Protection Agency (IEPA), the agency that the federal EPA has designated as the issuer of PSD permits in Illinois. Although the IEPA granted the Company a PSD permit in 2001, the IEPA has since made a "preliminary determination" that the permit has expired.

Sierra Club is a non-profit environmental organization that sought to enjoin the Company from building the power plant by bringing this suit against the Company, its parent company EnviroPower, LLC, and Khanjee Holding (US), Inc., under a citizen suit provision of the Clean Air Act. Sierra Club alleged that the Company's 2001 PSD permit had expired because the Company had neglected to "commence construction" of the plant within an 18-month window required under the permit. Sierra Club also claimed the permit was invalid under EPA regulations because the Company had discontinued construction of the plant for over 18 months. The district court agreed with Sierra Club on both points and granted summary judgment in its favor. The court also permanently enjoined the Company from building the plant until it obtained a new PSD permit, and the defendants appealed to this court.

We agree with the district court that Sierra Club has standing to pursue this lawsuit and that its claim is ripe and permissible under the Clean Air Act. We also agree that the 2001 PSD permit has expired and that the district court properly granted permanent injunctive relief in favor of Sierra Club. Therefore, we affirm the district court's grant of summary judgment in favor of Sierra Club.

I. BACKGROUND

A. Statutory and regulatory framework

Sierra Club brought this suit under 42 U.S.C. § 7604(a)(3), a citizen suit provision of the Clean Air Act, which provides in relevant part:

[A]ny person may commence a civil action on his own behalf ...

(3) against any person who proposes to construct or constructs any new or modified major emitting facility without a permit required under [42 USCS §§ 7470 et seq.] (relating to significant deterioration of air quality) ... or who is alleged to have violated (if there is evidence that the alleged violation has been repeated) or to be in violation of any condition of such permit.

The parties agree that the coal power plant that the Company seeks to build is a "major emitting facility" that requires a PSD permit. Such a permit contains an emission limitation that is set by the IEPA and represents the "best available control technology" for pollution. See 42 U.S.C. § 7475(a).

Once issued, a PSD permit can expire and become invalid in three different ways:

[a] [I]f construction is not commenced within 18 months after receipt of such approval,

[b] if construction is discontinued for a period of 18 months or more, or

[c] if construction is not completed within a reasonable time.

40 C.F.R. § 52.21(r)(2). The IEPA Administrator "may extend the 18-month period upon a satisfactory showing that an extension is justified," id.; otherwise, the PSD permit terminates by "automatic expiration." 40 C.F.R. § 124.5(g)(2) ("PSD permits may be terminated only by recission under § 52.21(w) or by automatic expiration under § 52.21(r)(2).").

B. Factual background

On August 15, 2000, the Company applied to the IEPA for a PSD permit to build a 600 megawatt¹ coal-fired power plant in Benton, Illinois, on land for which it had a 99-year lease. The IEPA concluded the project would be a major air pollution source subject to PSD review. On July 3, 2001, the IEPA issued a PSD permit for the plant. The permit states it will become invalid if:

construction of CFB [circulating fluidized bed] boilers is not commenced within 18 months after this permit becomes effective, if construction of these boilers is discontinued for a period of 18 months or more, or if construction of these boilers is not completed within a reasonable period of time.

The permit defines "commence" and "construction" in terms of 40 C.F.R. § 52.21(b)(9) and § 52.21(b)(8), respectively, which are provisions we will discuss in more detail later.

On December 2, 2002, the Company entered into an agreement with Black &amp Veatch (B & V), an engineering and construction company, that required the parties to "work together on an exclusive basis ... in order to draft and negotiate the EPC [Engineering, Procurement and Construction] Contract." On about December 18, 2002, the Company contracted with Alberici Constructors, Inc., for on-site excavation and foundation work. Alberici was to dig a hole at the site down to the bedrock and pour concrete to lay part of the foundation for the plant. On January 3, 2003, four Alberici employees began delivering equipment to the site, and five days later, they began excavating.

On February 14, 2003, Alberici stopped the excavation after a dispute arose regarding payment. Alberici's bills after that date include one day where workers showed up but did no work. All other days only include a supervisor's hours spent maintaining a protective barricade around the site.

In July 2004, the Company's landlord had the hole refilled, apparently because the Company did not make a payment on its lease. In September 2004, the Company signed another contract for excavation and concrete work, which began anew on September 29, 2004. An IEPA inspector visited the plant site shortly thereafter and determined that construction had commenced.

In the meantime, co-defendant Khanjee Holding (US), Inc. had obtained an option to buy the Company and all its assets. In June 2003, Khanjee affirmed its obligation to adhere to the Company's contract with B & V. In January 2004, the Company secured a mandate letter from its lead financial arranger indicating that financing for the project was available.

On November 19, 2004, the IEPA notified the Company that it had "made a preliminary finding" that its PSD permit had expired. The Company challenged this preliminary determination and as far as we know, that matter remains pending before the IEPA.

On May 20, 2005, Sierra Club filed this suit, alleging that the 2001 PSD permit had expired and was invalid. The defendants moved to dismiss, claiming that the citizen suit provision of the Clean Air Act did not provide a basis for this suit. They also moved for summary judgment, claiming that Sierra Club lacked standing and that the permit was valid. Sierra Club countered with its own motion for summary judgment.

The district court denied the defendants' motions and found the permit to be invalid. It entered summary judgment in Sierra Club's favor and permanently enjoined the defendants from building the plant until they obtained a valid permit. The defendants then filed this appeal.

II. ANALYSIS

A. Sierra Club had standing.

An organization has standing to sue if (1) at least one of its members would otherwise have standing; (2) the interests at stake in the litigation are germane to the organization's purpose; and (3) neither the claim asserted nor the relief requested requires an individual member's participation in the lawsuit. See Friends of the Earth, Inc. v. Laidlaw Env'l Servs. (TOC), Inc., 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977)). The defendants do not seriously contest that Sierra Club satisfies prongs (2) and (3). Sierra Club is a nonprofit organization formed and operated to "preserve, protect, and enhance the natural environment," which is also its stated goal in bringing this lawsuit. The defendants also do not suggest this proceeding requires an individual Sierra Club member to participate; rather, they claim that Sierra Club has not presented an individual member with standing. So the dispute here turns on prong (1).

To have standing, an individual must satisfy three requirements. First, she must have suffered an "injury in fact" that is both (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical. Second, the injury must be fairly traceable to the challenged action. Third, it must be likely, not just speculative, that a favorable decision will redress the injury. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Because these elements "are not mere pleading requirements but rather an indispensable part of the ... case, each element must be supported ... with the manner and degree of evidence required at the successive stages of the litigation." Id. at 561, 112 S.Ct. 2130.

To survive a defendant's motion for summary judgment (or to win on a cross-motion for summary judgment), a plaintiff cannot rely on mere allegations but must support each element by specific facts via affidavits or other evidence. See id. We review de novo the district court's determination that Sierra Club has standing. See Disability Rights Wis. Inc. v. Walworth County Bd. of Supervisors, 522 F.3d 796, 800 (7th Cir.2008).

1. Sierra Club member Barbara McKasson will suffer injury in fact.

Sierra Club relies on one of its...