Zen-Noh Grain Corp. v. Consol. Envtl. Mgmt. Inc.
| Decision Date | 17 July 2013 |
| Docket Number | CIVIL ACTION NO: 12-1011,c/w 12-1738 |
| Parties | ZEN-NOH GRAIN CORPORATION v. CONSOLIDATED ENVIRONMENTAL MANAGEMENT, INC. - NUCOR STEEL LOUISIANA THIS DOCUMENT RELATES TO MATTER 12-1738 |
| Court | U.S. District Court — Eastern District of Louisiana |
Plaintiff Consolidated Environmental Management, Inc. ("Nucor") filed this lawsuit against Zen-Noh alleging violations of the Clean Air Act ("CAA") and the federally enforceable Louisiana State Implementation Plan stemming from Zen-Noh's operation of a grain elevator in St. James Parish.1 Zen-Noh has filed a motion to dismiss all nine counts of Nucor's First Amended Complaint.2 Also before the Court is Nucor's motion for partial summary judgment on the issue of whether Zen-Noh's Air Permit has expired.3 For the foregoing reasons, the Court dismisses Counts I-III, Count V, and Counts VII-IX and denies the motion to dismiss Counts IV and VI of the First AmendedComplaint. The Court also denies Nucor's motion for partial summary judgment.
Congress enacted the CAA "to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare." 42 U.S.C. § 7401(b)(1). The Act is a comprehensive program for controlling and improving the nation's air quality. Under the Act, the Administrator of the Environmental Protection Agency identifies air pollutants that endanger the public health or welfare, determines what concentrations of those pollutants are safe, and codifies those safety determinations as National Ambient Air Quality Standards ("NAAQS"). See 42 U.S.C. §§ 7408, 7409. The Act then delegates to the states "primary responsibility for assuring air quality" within their respective boundaries, and requires each state to develop a State Implementation Plan ("SIP"), "which will specify the manner in which [the NAAQS] will be achieved and maintained." 42 U.S.C. § 7410(a). Upon approval by the EPA, an SIP becomes federally enforceable law. Louisiana Envtl. Action Network v. EPA, 382 F.3d 575, 579 (5th Cir. 2004); Kentucky Res. Council, Inc. v. EPA, 304 F. Supp. 2d 920, 923 (W.D. Ky. 2004); Sweat v. Hull, 200 F. Supp. 2d 1162, 1164 (D. Ariz. 2001).
Although the states "have 'wide discretion' in formulating their plans," Alaska Department of Environmental Conservation v. EPA, 540 U.S. 461, 470 (2004) (quoting Union Elec. Co. v. EPA, 427 U.S. 246, 250 (1976)), the CAA mandates that all State Implementation Plans include certain features. Of relevance here, the Act provides that each State Implementation Plan shall "meet the applicable requirements" of what is known as the Prevention of Significant Deterioration of Air Quality ("PSD") program. 42 U.S.C. § 7410(a)(2)(J); see also 42 U.S.C. § 7471. The PSD program, which applies to areas where the ambient level of air pollution already meets the NAAQS, see 42 U.S.C. § 7471, was "designed to ensure that the air quality in attainment areas or areas that are already 'clean' will not degrade." Alaska Department of Environmental Conservation, 540 U.S. at 470 (quoting BELDEN, CLEAN AIR ACT 43 (2001)). The CAA divides emission sources into major and minor pollution sources. 42 U.S.C. § 7479(1). The PSD requirements are triggered when a stationary source is a major source. La. Admin. Code tit. 33, pt. III, § 509. The CAA requires facilities constructing or modifying major sources to obtain a preconstruction permit from agencies administering EPA-approved state implementation programs. 42 U.S.C. §§ 7475(a)(1), 7479(2)(C). The PSD review process requires a demonstration that "emissions from construction or operation of such facility will not cause, or contribute to, air pollution"above the maximum allowable increment for the local air quality area, the national ambient air quality standards (NAAQS), or any other applicable emission standard. Id. § 7475(a)(3).
The PSD program relates to preconstruction permits for major sources, while Title V of the CAA deals with operating permits. 42 U.S.C. §§ 7661-7661f. As with the PSD program, Louisiana has a corresponding Title V operating permit program (also known as the Part 70 Permit program). La. Admin. Code tit. 33, pt. III, § 507. It is unlawful to operate a major source without a Part 70 operating permit or to operate except in compliance with an operating permit issued under Part 70. Id. In general, a stationary source requires a Part 70 operating permit if it directly emits or has the potential to emit 100 tpy or more of any regulated pollutant. Id. at § 502. The PSD and Part 70 permit programs are incorporated into Louisiana rules under Louisiana Administrative Code title 33, part II, chapter 5 ("Louisiana SIP"), which has been approved as satisfying the requirements of the CAA, 42 U.S.C. § 7411, et seq.
The Louisiana SIP also includes regulations for issuing permits for minor stationary sources, as well as regulations establishing emissions standards and work practice standards. Minor sources are facilities that emit less than a pre-identified amount, usually 100 tons per year, of a regulated contaminant after construction or modification. Understandably, Congress andthe EPA have devoted less attention to the regulation of minor sources compared to major sources for which PSD and Part 70 apply. See Texas v. U.S. E.P.A., 690 F.3d 670, 675 (5th Cir. 2012).
The CAA contains three citizen suit provisions. One of the provisions authorizes suits against the EPA Administrator for alleged failure of the Administrator to perform a non-discretionary duty under the CAA. 42 U.S.C. § 7604(a)(2). The other two provisions allow suit in federal district court against any person who is alleged to have violated an emission standard of the CAA. Section 7604(a)(3) authorizes immediate suit against any person who is alleged to be constructing or operating a major source of emissions without or in violation of a PSD permit. Section 7604(a)(1) permits suit based on a range of CAA violations, including violation of PSD permits, Part 70 permits, and the NAAQS. Although a 7604(a)(3) action can be brought immediately, suit under the broader 7604(a)(1) requires that the plaintiff give 60 days notice to the EPA Administrator, to the State in which the violation occurs, and to any alleged violator of the standard, limitation, or order. Id. § 7604(b)(1)(A).
The parties in this case are feuding neighbors with property next to each other on the Mississippi River in St. James Parish.Nucor is constructing a steel production facility that Zen-Noh has vigorously opposed. Zen-Noh was the first to bring the conflict between the parties into federal court. In 2009, Zen-Noh sought to enjoin the Louisiana Department of Environmental Quality ("LDEQ") from issuing air permits for a pig iron plant to Nucor. Then, in 2012, Zen-Noh sought to enjoin Nucor from constructing the first of two direct reduced iron ("DRI") plants under authority of other air permits issued by LDEQ to Nucor. Zen-Noh has also contested LDEQ actions granting Nucor permits for its steel plants and sued the EPA for objecting to, but failing to revoke, Nucor's air permits.
To seize the offensive, Nucor filed the complaint in this action alleging that Zen-Noh has itself run afoul of federal and state air quality laws in the operation of its grain elevator. Nucor issued to Zen-Noh, LDEQ, and the EPA, notice letters relating to Zen-Noh's alleged violations of the CAA and Louisiana SIP on April 30, 2012. Nucor filed its original complaint against Zen-Noh on July 3, 2012. That suit, Civil Action No. 12-1738, was consolidated with Zen-Noh's suit against Nucor under Civil Action No. 12-1011. Zen-Noh moved to dismiss the Nucor complaint.4 Nucor then filed its First Amended Complaint.5 The Court determined that Zen-Noh's motion to dismiss applies to Nucor's First AmendedComplaint as well as its original complaint.6 On the same day that it filed its First Amended Complaint, Nucor also provided amended notice letters to Zen-Noh, LDEQ, and the EPA.7
A. Nucor's Allegations
Nucor's complaints allege that Zen-Noh has submitted false information to LDEQ and improperly obtained permits for its grain elevator facility as a minor source when it is in fact a major source subject to Part 70 and PSD permitting programs.8 It alleges that Zen-Noh has failed to comply even with its LDEQ-issued minor source permit. Nucor seeks to enjoin Zen-Noh from operating its facility, allegedly a major source, without first obtaining Part 70 and PSD permits and to require Zen-Noh to comply with applicable conditions of the Louisiana SIP, the Part 70 rules, and the terms of the minor source permit ("Air Permit") issued by LDEQ. Nucor also urges the Court to assess civil penalties against Zen-Noh pursuant to 42 U.S.C. § 7604, and La. Rev. Stat. §§ 30:2025 and 30:2026(A)(2).
Nucor alleges that in 1979 Zen-Noh applied for approval of air emissions for its grain elevator and ship loading operation ("Grain Elevator") from the predecessor to LDEQ.9 Nucor alleges that Zen-Noh's initial application stated that the Grain Elevator would handle, on average, 190 billion bushels of grain and grain by-products per year and 3.1 million pounds of grain dust per year, and would emit 1.871 pounds per hour (1.949 tpy) of grain dust and 2.4 pounds per hour (1.73 tpy) of grain dryer emissions.10 The application also identified the pollution control equipment Zen-Noh would use. The Louisiana Air Control Commission issued a minor source permit (Permit 1258) to construct and operate the Grain Elevator on September 25, 1979.11 Nucor alleges that Zen-Noh began to operate the Grain Elevator in 1982.12
Nucor alleges that the predecessor to LDEQ inspected the Grain Elevator on September 21, 1983, and observed that Zen-Noh was operating a fourth shiploader.13 According to Nucor, Zen-Noh was not permitted to operate the fourth shiploader, which had...
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