US v. AM General Corp.

• Decision Date: 09 December 1992
• Docket Number: No. S87-377.,S87-377.
• Citation: 808 F. Supp. 1353
• Parties: UNITED STATES of America (EPA), Plaintiff, v. AM GENERAL CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Indiana

808 F. Supp. 1353

UNITED STATES of America (EPA), Plaintiff, v. AM GENERAL CORPORATION, Defendant.

No. S87-377.

United States District Court, N.D. Indiana, South Bend Division.

December 9, 1992.

COPYRIGHT MATERIAL OMITTED

Michael Rowe, J. Steven Rogers, F. Henry Habicht, II, Maureen Katz, Land and Natural Resources Div., Dept. of Justice, Andrew Baker, Ass't U.S. Atty., Erica Rosenberg, Office of General Counsel, U.S.E.P.A., Franklin Bentkover, Washington, DC, Arthur Smith, Andre Daugavietis, Office of Regional Counsel, U.S.E.P.A., Chicago, IL, for plaintiff.

Bryan G. Tabler, Joyce Martin, Indianapolis, IN, Charles V. Sweeney, Jean L. Doyle, South Bend, IN, for defendant.

MEMORANDUM AND ORDER

MILLER, District Judge.

Briefly stated, this case involves the EPA's challenge to AM General's modifications of its Mishawaka, Indiana plant in February 1986. AM General made those modifications pursuant to a permit issued by the St. Joseph County Health Department to which the EPA and the State of Indiana have delegated the authority to issue such permits. The EPA contends that the permit should not have been issued because AM General provided too little information as to whether the modifications would result in violation of applicable air quality control standards. For the reasons that follow, the court concludes that AM General is entitled to judgment on the EPA's claim because AM General made the modifications after the County Health Department had issued a permit for the modifications but before the EPA took formal action finding the permit to be in violation of Indiana's pollution standards. The court also concludes that the 1990 amendments to the Clean Air Act render moot AM General's requests that the court order the EPA to decide the requests that St. Joseph County be redesignated as an "attainment area" for purposes of the Clean Air Act.

The case is before the court on four motions for dispositive relief and one motion to compel discovery. Defendant AM General Corporation ("AM General") has filed two motions for summary judgment and a motion to reconsider this court's September 21, 1990 order denying AM General's prior summary judgment motion. AM General also has filed a motion to compel discovery pursuant to Fed.R.Civ.P. 37. AM General's dispositive motions address both the allegations of the plaintiff's complaint and those in the defendant's counterclaim. AM General's motion to compel seeks discovery of information it contends is relevant to the defense of the government's claim against it. The plaintiff, the United States Environmental Protection Agency ("EPA"), has moved for judgment on the pleadings with respect to AM General's counterclaim.

I. BACKGROUND

This action concerns AM General's alleged violations of emission standards promulgated under the Clean Air Act, 42 U.S.C. § 7401 et seq. Some background of that legislation is necessary before discussing the case's factual history.

A. The Clean Air Act

In 1970, Congress amended the Clean Air Act of 1963, substantially increasing the federal role in controlling air pollution. Union Electric Co. v. EPA, 427 U.S. 246, 257, 96 S.Ct. 2518, 2525, 49 L.Ed.2d 474 (1976); Train v. Natural Resources Defense Council, 421 U.S. 60, 64, 95 S.Ct. 1470, 1474, 43 L.Ed.2d 731 (1975). Congress also made substantial changes to the Act in 1977, reasserting the federal government's final responsibility for achieving the statute's goals. Ohio Environmental Council v. EPA, 593 F.2d 24, 31 (6th Cir. 1979). Congress adopted the most recent amendments to the Clean Air Act in November 1990. Because the parties have consistently referred to the pre-1990 version of the Clean Air Act, the court, when referring to the Act in the discussion below, addresses the pre-1990 version unless otherwise indicated. Where the 1990 amendments effect the court's analysis, the court so indicates.

The Clean Air Act enacts a federal program for pollution control to be administered by the states in accordance with adopted goals for air quality. Under the scheme, local authorities are required to establish state implementation plans ("SIPs") aimed at achieving National Ambient Air Quality Standards ("NAAQS") and emission controls required by the Clean Air Act. See generally Council of Commuter Organizations v. Gorsuch, 683 F.2d 648, 651 (2nd Cir.1982); United States v. Continental Group, U.S.A., 595 F.Supp. 1021 (E.D.Wis.1984). SIP's are adopted in accordance with those procedures and timetables established in § 110(a) of the Act, 42 U.S.C. § 7410(a). That section provides in pertinent part:

(a)(1) Each state shall, after reasonable notice and public hearings, adopt and submit to the Administrator, within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof) ... for any pollutant, a plan which provides for implementation, maintenance, and enforcement of such primary standard in each air quality control region (or portion thereof) within each State. In addition, such State shall adopt and submit to the Administrator (either as a part of a plan submitted under the preceding sentence or separately) within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national ambient air quality secondary standard (or revision thereof), a plan which provides for implementation, maintenance, and enforcement of such secondary standard in each air quality control region (or portion thereof) within each State. Unless a separate public hearing is provided, each State shall consider its plan implementing such secondary standard at the hearing required by the first sentence of this paragraph.

* * * * * *

(k)(2) Within 12 months of a determination by the Administrator ... that a State has submitted a plan or plan revision (or, in the Administrator's discretion, part thereof) that meets the minimum criteria established, the Administrator shall act on the submission....

42 U.S.C. § 7410.

As part of the goal of improving air quality through SIPs, states and localities receive a designation under the Act according to whether they have met the NAAQS for particular air pollutants or emissions. Three types of designations are possible:

(i) nonattainment, any area that does not meet (or contributes to ambient air quality in a nearby area that does not meet) the national primary or secondary ambient air quality standard for the pollutant,

(ii) attainment, any area (other than an area identified in clause (i)) that meets the national primary or secondary ambient air quality standard for the pollutant, or

(iii) unclassifiable, any area that cannot be classified on the basis of available information as meeting or not meeting the national primary or secondary ambient air quality standard for the pollutant.

42 U.S.C. § 7407(d)(1). If federal or state authorities determine that an area should be redesignated because of a change in the level of pollutants, a change in designation may be sought through procedures outlined in 42 U.S.C. § 7407(d)(3)(D):

The Governor of any State may, on the Governor's own motion, submit to the Administrator a revised designation of any area or portion thereof within the State. Within 18 months of receipt of a complete State redesignation submittal, the Administrator shall approve or deny such redesignation. The submission of a redesignation by a Governor shall not affect the effectiveness or enforceability of the applicable implementation plan for the State.

SIPs must include specific requirements for issuing permits to individuals who intend to modify or construct major pollution sources located in nonattainment areas. Under the Act, a state's SIP must provide that a permit to construct or operate in these nonattainment areas may be issued only if the permitting agency determines that (1) the increase in emissions will be offset by emission reduction from other sources; (2) all other sources of the operator in the state are in compliance with the Act; and (3) the source is required to comply with the lowest achievable emission rate. 42 U.S.C. §§ 7502-7503.

In 1978, the EPA designated St. Joseph County, Indiana as a nonattainment area. In 1981, Indiana submitted a revised SIP to the EPA, designed to achieve the national standards for ozone. The EPA approved the SIP revisions on February 16, 1982. Pursuant to the revised SIP, persons in a nonattainment area seeking to modify a facility so as to result in the potential increase of emissions must demonstrate that devices or techniques used by such facility achieve the lowest achievable emission rate ("LAER"). 42 U.S.C. § 7502.

The EPA has given the State of Indiana the authority to issue permits required under the Act. The state has delegated its permitting authority to the St. Joseph County Health Department for the county ("County Health Department"). 40 C.F.R. § 52.770 et seq. Indiana's SIP — APC-19, codified at 326 Indiana Administrative Code 2-1-1 et seq. — sets out the substantive and procedural requirements for obtaining permits in a nonattainment area such as St. Joseph County as required under 42 U.S.C. §§ 7502-7503 of the Act. APC-19 § 4 prohibits the construction, modification, or reconstruction of any facility, unless it can be demonstrated to the Board that the facility will meet the requirements set forth in the Act's nonattainment provisions, 42 U.S.C. §§ 7502-7503. APC-19 § 4(b)(4) provides in relevant part that, "Any person proposing the construction, modification or reconstruction of a major facility which will impact on the air quality of a nonattainment area or which will be located in a nonattainment area shall comply with the requirements of Section 8...." Section 8(a)(3) of APC-19 provides that:

(a) No person proposing the construction, modification or reconstruction of a major facility in a nonattainment area ... shall receive a construction or operation permit

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