News & Developments
September 2008: Sierra Club v. Johnson
The Eleventh Circuit issued an opinion in Sierra Club v. Johnson, 07-11537 upholding the ability of Title V permit issuing authorities to issue operating permits without incorporating terms to address unproven allegations of noncompliance even where the permittee is the subject of a pending Clean Air Act (“CAA”) enforcement action. The court’s decision contrast with the Second Circuit's opinion in NYPIRG v. Johnson, 427 F.3d 172 (2d Cir. 2005).
The case addressed whether the CAA required the USEPA to object to the issuance of Title V renewal permits to two power plants, both of which are currently defending a civil enforcement action brought by the EPA for alleged violations of the CAA’s New Source Review program. The civil enforcement action currently remains pending but has been administratively closed since 2001. The Eleventh Circuit acknowledged that plant owner has maintained a vigorous defense against EPA’s allegations, noting that the parties “remain locked in a protracted dispute over the applicability of [Prevention of Significant Deterioration] requirements.”
In denying the Sierra Club’s petition for review, the Eleventh Circuit decided that, even though the statute requires EPA to object to the issuance of Title V permits when faced with a demonstration that the permits do not comply with the CAA, EPA has the discretion to determine when such a “demonstration” is adequate under the Act. In this case, the plaintiffs’ demonstration of noncompliance consisted solely of EPA’s issuance of a Notice of Violation (“NOV”) and subsequent filing of a complaint in a civil enforcement action in federal district court.
The court acknowledged that, given the fact that both an NOV and a complaint need only be predicated on “any information available,” the allegations contained in the NOV and complaint do not conclusively establish the fact of noncompliance with the Act. Rather, they are “merely initial steps in an enforcement action.” Therefore, EPA reasonably concluded that, without more, they do not adequately demonstrate noncompliance. Consequently, a permit issued to the source need not include permit terms to address the alleged noncompliance.
The court explicitly stated that it was unpersuaded by the reasoning of the Second Circuit in NYPIRG v. Johnson. In addition to pointing to the “exceedingly low” standard of “any information available,” the court declined to assign heightened significance to a complaint filed by the EPA (as opposed to other plaintiffs in civil litigation) based on its “privileged” position with respect to monitoring permittees’ compliance with the Act and developing the basis for an enforcement action. Like any other complaint, the truth of the allegations made in an EPA-issued complaint “must be proven over the course of a proceeding.”
The Eleventh Circuit’s decision complements the July 2008 decision of the Seventh Circuit in a similar case involving Title V permit renewals issued to Midwest Generation facilities. Citizens Against Ruining the Environment v. EPA, Case Nos. 07-3197, 07-3198 & 07-3199, 2008 U.S. App. LEXIS 15975 (7th Cir.) (decided July 28, 2008). That case was factually distinct in that the NOV utilized in plaintiffs’ “demonstration” of noncompliance was not issued until after EPA had declined to object to issuance of the renewal permit. Therefore, unlike the Eleventh Circuit, the Seventh Circuit explicitly declined to comment on the Second Circuit’s decision in NYPIRG, concluding that, because of its factual distinctions, it would not resolve the matter currently before it. Nevertheless, consistent with the approach of the Eleventh Circuit, the Seventh Circuit upheld EPA’s decision not to object to issuance of the permits, deferring to EPA’s reasonable interpretation of what constitutes an adequate demonstration of noncompliance with the CAA. The Seventh Circuit also acknowledged the distinction between EPA’s complementary permitting and enforcement authorities, and found it reasonable for the EPA Administrator to engage in extensive fact-finding and analysis regarding contested violations in the enforcement context, rather than the permitting context.
