United States v. CEMEX, Inc.

• Citation: 864 F.Supp.2d 1040
• Decision Date: 30 March 2012
• Docket Number: Civil Action No. 09–cv–00019–MSK–MEH.
• Parties: UNITED STATES of America, Plaintiff, v. CEMEX, INC., Defendant.
• Court: United States District Courts. 10th Circuit. United States District Court of Colorado

864 F.Supp.2d 1040

UNITED STATES of America, Plaintiff,

v.CEMEX, INC., Defendant.

Civil Action No. 09–cv–00019–MSK–MEH.

United States District Court,

D. Colorado.

March 30, 2012.

James D. Freeman, John N. Moscato, U.S. Department of Justice–Co–Environmental Enforcement, Denver, CO, Leigh P. Rende, U.S. Department of Justice, Washington, DC, for Plaintiff.

Chet M. Thompson, David Patrick Ross, Richard E. Schwartz, Crowell & Moring LLP, Washington, DC, Derek A. Hahn, Crowell & Moring, LLP, Irvine, CA, Hugh Q. Gottschalk, Jessica Goneau Scott, Wheeler Trigg O'Donnell, LLP, Denver, CO, for Defendant.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT

MARCIA S. KRIEGER, District Judge.

THIS MATTER comes before the Court pursuant to Defendant Cemex, Inc.'s (“Cemex”) Motion to for Summary Judgment (# 147), the Government's response (# 158), Cemex's reply (# 165), and the Government's surreply (# 173). Having considered the same, the Court FINDS and CONCLUDES the following.

I. Background

This is an action pursuant to the Clean Air Act (“CAA”) and the State of Colorado's implementing regulations.

Cemex operates a cement manufacturing plant in Lyons, Colorado. Between 1997 and 1999, Cemex undertook modifications to that plant. The Government contends that Cemex failed to notify the U.S. Environmental Protection Agency (“EPA”) of the modifications. According to the Government, when the modifications were complete and the plant returned to operation, it began emitting pollutants at an increased rate. The EPA contends that it did not learn of the modifications—and thus, the ensuing increase in pollutants—until 2006.

The Government then commenced this action in January 2009, asserting a number of claims, two of which remain pending: Claims 1 and 2 of the First Amended Complaint (# 16). Broadly stated, both claims are based on the Government's contention that Cemex failed to obtain a preconstruction permit required by the CAA before it undertook the modification, thereby failing to undergo certain analyses and determinations regarding appropriate emissions levels to be implemented with the modification. Both claims are also based on the Government's position that this failure amounts to a violation of the requirements of the CAA with respect to a separately issued operating permit because preconstruction standards and requirements are to be incorporated in the operating permit. The Government seeks both civil penalties for these violations pursuant to 42 U.S.C. § 7413(b), as well as injunctive relief. Cemex asserts as an affirmative defense that the relevant statute of limitation bars these claims to the extent to the extent monetary penalties are requested, and, alternatively, that the claims are barred by the doctrine of laches to the extent equitable relief is requested.

In the motion for summary judgment, Cemex seeks judicial determination of several legal and factual issues regarding the viability of the claims and defenses: (1) that, as a question of law, accrual of a cause of action for violation of the preconstruction permit and other requirements occurs upon completion of the construction or modification, and the failure to comply with the preconstruction provisions of the CAA does not amount to a “continuing violation” for the purposes of the statute of limitation; (2) if the statute of limitation bars any aspect of the claims, that, as an issue of fact, the Government is not entitled to equitable tolling for its failure to bring an enforcement action within the appropriate time period; and (3) that, as a question of law, the failure to obtain a preconstruction permit does not amount to a violation of the operating permit requirements.

II. Standard of Review

Rule 56 of the Federal Rules of Civil Procedure facilitates the entry of a judgment only if no trial is necessary. See White v. York Intern. Corp., 45 F.3d 357, 360 (10th Cir.1995). Summary adjudication is authorized when there is no genuine dispute as to any material fact and a party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Substantive law governs what facts are material and what issues must be determined. It also specifies the elements that must be proved for a given claim or defense, sets the standard of proof and identifies the party with the burden of proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Kaiser–Francis Oil Co. v. Producer's Gas Co., 870 F.2d 563, 565 (10th Cir.1989). A factual dispute is “genuine” and summary judgment is precluded if the evidence presented in support of and opposition to the motion is so contradictory that, if presented at trial, a judgment could enter for either party. See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. When considering a summary judgment motion, a court views all evidence in the light most favorable to the non-moving party, thereby favoring the right to a trial. See Garrett v. Hewlett–Packard Co., 305 F.3d 1210, 1213 (10th Cir.2002).

When the movant has the burden of proof on a claim or defense, the movant must establish every element of its claim or defense by sufficient, competent evidence. SeeFed.R.Civ.P. 56(c). Once the moving party has met its burden, to avoid summary judgment the responding party must present sufficient, competent, contradictory evidence to establish a genuine factual dispute. See Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991); Perry v. Woodward, 199 F.3d 1126, 1131 (10th Cir.1999). If there is a genuine dispute as to a material fact, a trial is required. If there is no genuine dispute as to any material fact, no trial is required. The court then applies the law to the undisputed facts and enters judgment.

When the moving party does not have the burden of proof at trial, it must point to an absence of sufficient evidence to establish the claim or defense that the non-movant is obligated to prove. If the respondent comes forward with sufficient competent evidence to establish a prima facie claim or defense, a trial is required. If the respondent fails to produce sufficient competent evidence to establish its claim or defense, the claim or defense must be dismissed as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

At issue here, however, are not solely evidentiary matters but also questions about the law that governs the claims. “Statutory interpretation is a matter of law appropriate for resolution on summary judgment.” Thomas v. Metro. Life Ins. Co., 631 F.3d 1153, 1160 (10th Cir.2011). In interpreting a statute, a court begins with the plain language of the statute; the words should be read in their context and with a view to the overall statutory scheme. Wright v. Fed. Bureau of Prisons, 451 F.3d 1231, 1234 (10th Cir.2006) (citation omitted). If the statutory language is clear, the analysis ends and the plain meaning must be applied. Thomas, 631 F.3d at 1161. However, if the language is ambiguous, the court may look beyond the plain text and examine legislative intent and overall statutory construction to resolve the ambiguity. Id.

III. Framework of CAA and Colorado Implementing Regulations

The Clean Air Act's goals are accomplished through a partnership of federal authorities, led by the EPA, and state regulatory agencies. The EPA sets air concentration limits for various pollutants, and each state is charged with developing a regulatory regime called a “State Implementation Plan” (“SIP”) to meet those standards. See generally National Parks Conservation Ass'n v. Tennessee Valley Authority, 480 F.3d 410, 412–13 (6th Cir.2007) ( “TVA 6th Cir.”) (discussing statutory and regulatory framework). The SIP must be approved by the EPA. 42 U.S.C. § 7410. Colorado's SIP ¹, in the form relevant to these proceedings, was approved by the EPA in 1997. ²

Pursuant to the portion of the CAA at issue here, when a polluter wishes to construct or modify a facility that will produce regulated pollutants, it must obtain a state-issued “preconstruction permit”—either a “Prevention of Significant Deterioration” (“PSD”) permit, or a “Non-attainment New Source Review” (“NNSR”) permit.³TVA 6th Cir. at 412–13 & n. 1. During the PSD permitting process, state authorities examine EPA standards on the applicable pollutants, determine and direct an appropriate emissions limit for each pollutant, and provide for ongoing monitoring of the facility. Id. The Act contemplates that, following construction, polluters will apply for and obtain a state-issued and state-supervised “Title V” permit, sometimes referred to as an “operating permit.” 42 U.S.C. § 7661a(a).

The history of the CAA provides some context for this two-regime arrangement. The statute as it evolved amounts to a congressional compromise, balancing the interests related to reducing pollution with the economic concerns that would result from immediate imposition of strict standards on the industry. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 847, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). As a result, the CAA imposes less stringent regulations on existing regulated facilities, which are essentially “grandfathered” into less exacting standards, while newer facilities, or those making major changes, are required to implement measures to reduce pollution emissions. See United States v. Cinergy Corp., 458 F.3d 705, 709 (7th Cir.2006) (noting that CAA treats old plants more leniently than new ones, but with the expectation that old plants will wear out and be replaced with new facilities that will be subject to the more stringent requirements). Thus, as discussed below, the preconstruction permitting regime contains measures to ensure that the new facilities or modifications will comply with the stricter standards. Title V was enacted in 1990 to require “each covered facility to obtain a comprehensive operating permit...