Seventh Circuit Dismisses EPA Claims Of Air Violations by Midwest Generation

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By Michael Bologna  

 

CHICAGO--The U.S. Court of Appeals for the Seventh Circuit July 8 affirmed a district court's dismissal of claims that Midwest Generation LLC violated the Clean Air Act after it purchased five Illinois coal-fired power plants that had not been properly fitted with best available control technology (BACT) (United States v. Midwest Generation LLC, 7th Cir., No. 12-1026 and No. 12-1051 7/8/13).

The federal government and the state of Illinois had argued that Midwest Generation should be held liable for violations of the new source review prevention of significant deterioration requirements after it acquired the facilities in 1999 from Commonwealth Edison Co.

Honoring such requirements would have permitted the power company to modify the plants only if BACT systems were also installed. Commonwealth Edison made the modifications between 1994 and 1999.

While the U.S. District Court for the Northern District of Illinois ruled in March 2010 and again in March 2011 that the government's action had not been timely filed, the government said that its claim was not affected by the five-year statute of limitations (53 DEN A-11, 3/18/11).

The government appealed the district court's ruling Jan. 5, 2012, (04 DEN A-1, 1/9/12).

The government claimed that its complaint could not be rejected based on a “continuing violation’’ of the law or a “continuing injury,’’ but the Seventh Circuit disagreed.

On the continuing violation question, the court noted that both the Eighth Circuit and the Eleventh Circuit had issued rulings in cases where a new or modified plant, despite failing to obtain a construction permit, had engaged in a new violation of Section 7475(a) of the Clean Air Act. In both cases, the court found the defendant had not engaged in a new or continuing violation of the law.

No Basis Seen for Injury Argument

In addition, the Seventh Circuit found no basis for the government's continuing injury argument.

“Plaintiffs' contention that a continuing injury from failure to get a preconstruction permit (really, from failure to use BACT) makes this suit timely is unavailing,’’ Chief Judge Frank Easterbrook wrote on behalf of the three-judge panel. “What these plants emit today is subject to ongoing regulation under rules other than §7475. Today's emissions cannot be called unlawful just because of acts that occurred more than five years before the suit began. Once the statute of limitations expired, Commonwealth Edison was entitled to proceed as if it possessed all required construction permits.’’

Anne Rowan, a spokeswoman for Region 5 of the Environmental Protection Agency in Chicago, said the government is still reviewing the decision and has no comment.

A spokesman for Midwest Generation did not respond to BNA's request for comment.

The Justice Department, EPA, and Illinois originally filed suit in 2009, alleging that Commonwealth Edison made numerous modifications to its plants that triggered PSD requirements under the Clean Air Act (165 DEN A-9, 8/28/09).

The government asserted the violations attached to Midwest Generation following its acquisition of the facilities. The lawsuit sought millions of dollars in civil penalties as well as remedial action to control emissions in line with federal law. The matter was appealed to the Seventh Circuit after the U.S. District Court for the Northern District of Illinois dismissed the case in March 2011.

Environmental Groups Frustrated by Ruling

Environmental groups expressed frustration with the ruling, noting that the power generator's improper modifications have created a pattern of public health problems that the court believes have no remedy.

“The Respiratory Health Association is extremely disappointed in the decision,’’ said Brian Urbaszewski, RHA's director of environmental health programs. “It seems that the Court is saying that if you don't get caught cheating by the government within five years, then you are free to continue polluting and harming the public, and continued operation of facilities that never got construction permits face no federal repercussions whatsoever for continuing to emit higher levels of air pollution.’’

Faith Bugel, a senior staff attorney with the Environmental Law and Policy Center, agreed and said the court failed to answer the question of remedies when communities see a continuing injury due to a Clean Air Act. Bugel told BNA the government may choose to appeal the ruling to the U.S. Supreme Court.

“There is always the option to appeal,” Bugel said. “I think there is a potential for arguing there is now a conflict between circuits, and that is one of the areas where the Supreme Court tends to pick up cases Beyond that, it is hard to say what DOJ and EPA would decide to do.’’

 


The opinion of the U.S. Court of Appeals for the Seventh Circuit in United States v. Midwest Generation LLC is available at http://op.bna.com/env.nsf/id/smiy-99epr3/$File/USvMidwest.pdf.