The Nickel Report

In my October 16, 2018, post, I observed that a panel of the Fifth Circuit put another nail, though not the final nail, in the coffin of NSR enforcement for projects completed a long time (some of them, decades) before EPA or other plaintiffs filed a complaint alleging NSR violations. In United States v. Luminant, No. 17-10235 (5th Cir. Oct. 1, 2018), the panel unanimously ruled that the statute of limitations bars civil penalties for NSR violations that allegedly occurred more than five years before the filing of the complaint. But over a strong dissent by Judge Elrod, a 2-1 majority ruled that while injunctive relief is also barred in those circumstances for non-government plaintiffs (Sierra Club, in this case), injunctive relief is still “available” when the government is seeking to enforce the Clean Air Act.

Even still, the government’s loss was a big one. The panel’s decision added the Fifth Circuit to the substantial majority of Circuit Courts that had already ruled that the statute of limitations bars civil penalties in these circumstances. And the opinion explained well why an argument that the government and other plaintiffs have made for years—that the Fifth Circuit in United States v. Marine Shale Processors, 81 F.3d 1329 (5th Cir. 1996) had already decided the issue in their favor—was plainly wrong.

The government did not seek rehearing. The writing was on the wall, as far as it is concerned, and escaping an adverse decision on injunctive relief was all it could hope for. Indeed, even the majority went out of its way to indicate that injunctive relief should not be automatically granted here, given the passage of time. Seizing on Judge Elrod’s well-reasoned dissent, however, Luminant filed a motion for rehearing en banc. The Fifth Circuit granted Luminant’s motion, indicating a likelihood that the full court would affirm the district court on injunctive relief also. That appears to be how the government read the decision; shortly before briefing was to commence and argument would be heard, the government withdrew its appeal altogether.

This was, to be sure, a tremendous victory for Luminant. It is not every day that the federal government walks away from an enforcement action without so much as a face-saving settlement. But the grant of Luminant’s motion for rehearing en banc by the Fifth Circuit means the panel’s decision was vacated in its entirety. So the government not only avoided the likely result of a more resounding loss before the full court, it can also now say that the statute of limitation issue remains undecided in the Fifth Circuit.

It’s a strange result. If I were a betting man, though, I would not bet the government would prevail in the next case involving an application of the statute of limitations to alleged NSR violations, and almost certainly not in the Fifth Circuit.