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July 10, 2013
NSR violation not continuous, says court

The limitations of enforcement options available to federal and state governments under the major source preconstruction requirements of the Clean Air Act (Section 7475) were highlighted by the U.S. Court of Appeals for the 7th Circuit in its opinion in United States and State of Illinois v. Midwest Generation, et al.

Specifically, the 7th Circuit affirmed a district court ruling that the U.S. EPA and Illinois could not assess violations on a continuing basis against energy companies for a failure to comply with new source review (NSR) permitting requirements.

Statute of limitations

The EPA and Illinois argued that between 1994 and 1999, Commonwealth Edison Co. modified five of its coal-fired power plants without obtaining needed NSR permits.  The company argued that changes did not trip the major modification threshold that triggers the NSR requirement to install the best available control technology (BACT), and therefore, permitting was not required.

Commonwealth Edison then sold the modified plants to Midwest Generation.  The plaintiffs asserted that as Commonwealth’s successor, Midwest Generation and its corporate parent Edison Mission Energy are liable for the violations.  The district court disagreed, citing among other things the initiation of the suit against the energy companies more than a decade after the modifications had been completed; the statute of limitations in such cases is 5 years. 

Continuing injury

In their appeal, EPA and Illinois stated that failure to obtain the type of construction permit required under Section 7475 of the CAA is a continuing violation because injury continues after the first day of the violation.  In other words, fresh violations occur every day the facilities operate without a Section 7475 permit.  The 7th Circuit was not persuaded.

The court noted that Congress sometimes writes provisions into law that do indeed specify continuing noncompliance after a violation occurs, “but Section 7475 is not among them.”  According to Chief Judge Frank Easterbrook, who wrote the opinion, a violation under Section 7475 is complete when construction commences without a permit in hand.

“Nothing in the text of Section 7475 even hints at the possibility that a fresh violation occurs every day until the end of the universe if an owner that lacks a construction permit operates a completed facility,” wrote Easterbrook.  “Section 7475(a)(4) specifies what must be built, not how the source operates after construction.  If the owners ripped out or deactivated the best available control technology after finishing construction, that would not violate Section 7475.”

Judge Easterbrook added that today’s emissions cannot be called unlawful just because of acts that occurred more than 5 years before the suit began.  “Once the statute of limitations expired,” writes Easterbrook, “Commonwealth Edison was entitled to proceed as if it possessed all required construction permits.” 

The judge emphasizes that the companies may be in violation of some other statute, regulation, or implementation plan prescribing how polluters run their facilities, but not under the preconstruction requirements of Section 7475.

Tennessee law

The plaintiffs also contended that Illinois law operates the same way as a Tennessee law that requires that sources use BACT.  The 7th Circuit left this determination to the district judge in ongoing litigation.

Click here for Easterbrook’s opinion.

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