The Nickel Report

In my April 2, 2018, post, I asked whether the US Court of Appeals for the Fifth Circuit would put another 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. A three-judge panel of the Court of Appeals answered in United States v. Luminant, No. 17-10235 (5th Cir. Oct. 1, 2018), by unanimously ruling 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 in a 2-1 decision, the 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. In her dissent in part, Judge Elrod said she would have affirmed the district court’s dismissal of the case in all respects, characterizing any “injunctive” relief sought by the government as “really just time-barred penalties in disguise.”

After this decision, there is now a very clear majority of circuit courts that have held that NSR violations are one-time violations that first accrue during construction of a project that allegedly required pre-construction permitting and not continuous or repeated violations for operating without BACT. The federal five-year statute of limitations thus bars civil penalties for construction that allegedly occurred before the limitations period. The Fifth Circuit joined the Third, Seventh, Eighth, Tenth and Eleventh in this conclusion. This removes an important point of leverage for the government in NSR enforcement cases alleging violations for long-ago completed projects. Only the Sixth Circuit has, to date, ruled otherwise, but the Luminant court—and several of the other circuits—distinguished it on the grounds that that decision dealt with a unique provision of the Tennessee SIP that explicitly requires a post-construction permit in some circumstances. The Fifth Circuit’s decision is perhaps even more significant than just adding to the majority view in that the it puts a final nail in 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.

On injunctive relief, the panel agreed that the concurrent remedy doctrine bars Sierra Club’s claims for injunctive relief. But the majority held that the same bar does not apply to the government’s claims for injunctive relief because there is no “congressional enactment clearly imposing it.” The majority also rejected the district court’s holding that it lacked jurisdiction to “consider any aspect of the injunctive relief requested,” finding that the Clean Air Act “plainly gives district courts jurisdiction to restrain a violation, require compliance, and award any other appropriate relief whenever a person has committed a § 7475 violation.” The majority distinguished United States v. EME Homer City Generation, L.P., 727 F.3d 274 (3d Cir. 2013), on grounds that it “addressed injunctive relief against former owners of a facility who cannot violate the [CAA] in the future.”

The majority’s discussion of injunctive relief on remand appears to evince, however, some skepticism—or perhaps at least an open invitation if not instruction to the district court—to consider whether injunctive relief “is appropriate and proper under the legal and factual circumstances of th[e] case in which the legal relief has been time barred.” Although declining to give the district court any more specific instruction on how to make that determination (and wishing the lower “good luck” in making that determination), the majority directs the district court—“without further comment”—to Judge Easterbrook’s statement from United States v. Midwest Generation, LLC, 720 F.3d 644, 648 (7th Cir. 2013), that “‘[o]nce the statute of limitations expired, [the defendant-facility] was entitled to proceed as if it possessed all required construction permits.’” (footnote 26 of majority opinion).

In her partial dissent, Judge Elrod would have held that injunctive relief is not available under the Clean Air Act for a wholly past violation—which the court had already held is the case for a PSD violation—because an injunction necessarily must be directed at stopping “ongoing or future unlawful conduct.” Otherwise, what the government is seeking as injunctive relief—surrender of allowances, alleged “mitigation” of “illegal emissions” and installation of controls—is nothing more than “time-barred penalties in disguise.” Judge Elrod also predicted that, although the majority took great pains to tell the district court that it can still find injunctive relief inappropriate under the circumstances of this case, “this is all but a foregone conclusion.”

The Fifth Circuit has put another nail in the coffin of NSR enforcement for ancient projects, but not the final nail—not even in the Fifth Circuit states. So the NSR enforcement initiative against electric generating companies continues to churn on, albeit at a slower pace. Soon it will be 20 years old!