Court: Court of Appeals for the Seventh Circuit; July 28, 2008; Federal Appellate Court
In the case 535 F.3d 670 (2008), environmental groups and the Illinois Attorney General challenged the EPA's failure to object to operating permits proposed by the Illinois EPA under the Clean Air Act (CAA). The petitioners argued that the EPA Administrator was required to object due to a clear demonstration of non-compliance with the CAA. Conversely, the EPA contended that the Administrator exercised discretion appropriately, as the petitioners' claims warranted further investigation better handled through the CAA's enforcement mechanisms.
Title V of the CAA mandates that major stationary pollution sources obtain operating permits that consolidate all applicable requirements to ensure compliance. In Illinois, after a permit application process involving public comment, the IEPA submits a draft permit to the EPA, which has 45 days to object. If no objection is raised, individuals may petition the EPA to intervene within 60 days. The EPA must object if the petitioner can demonstrate non-compliance. The CAA also outlines compliance plan requirements for permit applications and stipulates that sources must report any deviations from permit terms. Additionally, the EPA has enforcement authority to issue a notice of violation if a source is found to be in violation of permit requirements.
The Administrator has three enforcement options: (1) issue a compliance order, (2) impose an administrative penalty, or (3) initiate a civil action, which allows the EPA to seek an injunction and recover civil penalties. A citizen's suit provision permits individuals to sue for violations of emission standards under the Clean Air Act (CAA). The case involves six coal-fired power plants operated by Midwest Generation in Illinois, originally permitted by Commonwealth Edison in 1995. The Illinois Environmental Protection Agency (IEPA) proposed operating permits, which led to petitions requesting the Administrator's objection due to concerns over opacity limits and new source review (NSR) compliance.
The EPA found the IEPA did not adequately respond to public comments regarding compliance schedules for opacity and NSR violations. However, the revised permits proposed by the IEPA lacked a compliance schedule. The Administrator denied the petitions, stating that petitioners did not prove ongoing violations necessitating a compliance schedule, as the IEPA reviewed opacity data and found no basis for such a requirement. Regarding NSR, the Administrator noted that Midwest had not applied for NSR permits, indicating no violations of the CAA had been established. Consequently, the Administrator deemed the petitions insufficient and stated that further investigation would be conducted by the EPA's enforcement arm. The IEPA then added a condition to the permits to prevent them from being shielded from enforcement actions. Following the denial of the petitions, the EPA issued a Notice of Violation (NOV) to Midwest for opacity and NSR violations. The Illinois Attorney General and environmental groups subsequently appealed the Administrator's decisions, focusing on both opacity and NSR issues, and only the opacity issue, respectively.
The absence of a standard of review in the Clean Air Act (CAA) necessitates evaluating the EPA's decision under the Administrative Procedure Act (APA), which allows for agency actions to be overturned if deemed arbitrary, capricious, or unlawful. The Chevron framework applies, requiring an initial assessment of whether Congress clearly addressed the issue at hand. If the statute is clear, it must be followed; if ambiguous, agency interpretation is permissible unless it fails the APA's standards. Petitioners argue the CAA is unambiguous, negating the need for further Chevron analysis. They also contend that the Administrator's rationale does not interpret the CAA but rather applies an inconsistent agency policy. The EPA asserts that it deserves deference in interpreting its regulations and highlights ambiguities in the term "demonstrates" within the permit-objection process.
A key jurisdictional issue is whether the Illinois attorney general has standing, which requires establishing (1) injury-in-fact, (2) causation, and (3) redressability. The attorney general must substantiate her standing as if she were a plaintiff in a district court. The petitioners' brief only briefly mentions standing, and while a more detailed discussion appears in their reply brief, the EPA argues this late assertion is improper as it denies the agency a chance to respond. The standing of the attorney general is complicated by her challenge to decisions made by the Illinois EPA, creating a conflict within the executive branch. Ultimately, the attorney general did not adequately demonstrate her standing early in the proceedings, and even considering her late arguments, insufficient grounds for standing were established.
Petitioners argue that Illinois has standing to sue both as a sovereign state and in a parens patriae capacity. They reference Davis v. U.S. E.P.A., which granted California standing due to direct consequences from an EPA order. In contrast, the Illinois Environmental Protection Agency (IEPA) issued permits to Midwest, which were approved by the EPA, indicating no conflict with Illinois’ interests. Regarding parens patriae standing, it is generally ruled that a state cannot sue the federal government to represent its citizens' interests, as established in Massachusetts v. Mellon. However, the petitioners cite Massachusetts v. E.P.A. to illustrate a state's right to assert claims under federal law, noting that Massachusetts had a clear injury from climate change affecting it as a landowner. Conversely, the alleged injury to Illinois remains unspecified, lacking supporting declarations, and the IEPA's actions seem to represent the state's interests. The attorney general has not demonstrated jurisdiction over this internal dispute within state agencies, and no actions have been taken to alter the IEPA's decisions. Although the attorney general possesses broad authority to protect public rights, the requirement for independent standing has not been satisfied. As a result, the petition is dismissed, and the focus shifts to the environmental groups' challenge regarding the Administrator's decision on the permits. Both parties reference New York Public Interest Research Group, Inc. v. Johnson as relevant to their arguments.
An NOV was issued by New York's permitting authority to two power plants for operating without necessary PSD permits. When the EPA did not object to draft operating permits, NYPIRG petitioned for an objection, which the EPA denied, citing that the source did not concede to PSD limits and the permitting authority had discretion under Title V not to include yet undetermined PSD limits. The court of appeals vacated the EPA's decision, stating that the NOV and initiation of a CAA citizen's suit demonstrated non-compliance for the Title V permit review process. Petitioners advocate following this precedent, while the EPA contends its reasoning is flawed. The current case differs because the NOV was issued after the Administrator's decision, thus not part of the initial record. The court refrains from deciding if a prior NOV obligates the Administrator to object to a permit. Title V mandates the Administrator to object if a petition demonstrates noncompliance, but "demonstrates" is not defined in the CAA. The EPA has discretion to interpret what constitutes adequate demonstration. The petitioners argue the Administrator did not properly assess noncompliance but merely deferred to enforcement. However, the Administrator explicitly stated that the petition did not demonstrate noncompliance at permit issuance. The disagreement centers on the meaning of "demonstrate," which remains undefined, leading to an examination of whether the Administrator's interpretation is a permissible statutory construction. The timeline for Title V suggests the Administrator acted reasonably, as permitting authorities must follow streamlined procedures and the Administrator has 45 days to object upon receipt of a proposed permit if it does not comply with the CAA.
The Administrator has a 60-day period to respond to petitions after the EPA’s 45-day review of proposed permits, as outlined in 42 U.S.C. § 7661d(b)(2). This short timeframe suggests that the EPA is not expected to conduct extensive investigations or resolve all allegations during the permitting process. Instead, the EPA retains broad enforcement authority under Section 113, allowing it to act upon any information available regarding violations, issue orders, impose penalties, or initiate civil actions. Section 114 grants the EPA the ability to issue administrative requests and seek civil penalties if necessary. Title V reserves the EPA's right to enforce violations of the Clean Air Act (CAA) unless explicitly shielded by the permit, indicating that the permitting process is not the sole avenue for addressing alleged violations.
The Administrator's determination that the petitioners did not demonstrate noncompliance regarding opacity was supported by the Illinois EPA's review, which found no grounds for a compliance schedule and relied on the source’s compliance certifications. This reliance was deemed appropriate and not arbitrary or capricious under the Administrative Procedure Act. The findings underscore that Title V is intended to complement, rather than limit, the EPA’s enforcement capabilities. As a result, the petitions for review from the attorney general were dismissed, and the environmental groups’ petition was denied, highlighting the EPA's discretion in handling contested evidence of potential violations.
The attorney general's claims encompass all six power plants, while the environmental groups focus solely on the Fisk and Crawford stations. Opacity, which measures the percentage of light blocked by smoke, has specific regulatory limits in Illinois: a general limit of 30 percent opacity with allowances for temporary exceedances, and a stricter 20 percent limit for facilities constructed or modified after April 14, 1972. The New Source Review (NSR) program includes prevention of significant deterioration (PSD) and nonattainment NSR, requiring permits for substantial emissions. Although the Clean Air Act mandates a 60-day decision period for petitions, a decision took 19 months in this case, resulting in a consent decree. The EPA does not contest the standing of the environmental groups, meeting Article III's case-or-controversy requirement, but their appeal is limited to the opacity issue concerning only two plants. The Illinois attorney general retains exclusive authority to represent the State in litigation when it is the sole real party in interest. The case diverges from NYPIRG v. Johnson, as the Notice of Violation (NOV) was issued by the EPA rather than the permitting authority. Compliance certifications are serious; false filings can lead to criminal sanctions. Despite petitioners' claims, adequate demonstrations of noncompliance can be made, and the EPA has cited contexts where this is possible, though the status of prior NOVs regarding noncompliance remains undecided.
