Environmental Law - Travis M. Trimble

• Jurisdiction: United States,Federal
• Publication year: 2006
• Citation: Vol. 57 No. 4

Environmental Lawby Travis M. Trimble^*

In 2005 the Eleventh Circuit courts addressed issues of regulatory interpretation of the Clean Air Act ("CAA");¹ compliance with the National Environmental Policy Act ("NEPA")² in connection with the development of wetlands; and a conflict between the Federal Emergency Management Agency's ("FEMA") coastal flood insurance program and the Endangered Species Act ("ESA").³ First, the Eleventh Circuit Court of Appeals invalidated a rule of the Alabama Department of Environmental Management that exempted certain stack emissions that otherwise violated the State Implementation Plan under the CAA.⁴ Also, the United States District Court for the Northern District of Alabama heard one of several cases arising out of an enforcement dispute between the Environmental Protection Agency ("EPA") and power companies over the companies' upgrades to existing power plants.⁵ The court held that, for purposes of the EPA's rule excluding routine maintenance, repair, or replacement projects from the CAA's pre-construction permit requirement, any project that is routine throughout the industry and does not increase the maximum hourly capacity of the plant to emit pollutants can qualify for the exclusion.⁶ In a case concerning the Clean Water Act ("CWA")⁷ and NEPA, the United States District Court for the Southern District of Florida ruled that the United States Corps of Engineers, in issuing a CWA section 404 permit allowing a county to fill jurisdictional waters for development, had improperly segmented a portion of the development from the larger development plan for permitting purposes.⁸ Additionally, the court held that the Corps improperly concluded that an Environmental Impact Statement was not even required for the segmented portion.⁹ Finally, in an ESA case, the Southern District of Florida enjoined FEMA from administering its National Flood Insurance Program in portions of the Florida Keys because the plan facilitated development that degraded the habitat of several endangered or threatened species.¹⁰

I. CLEAN AIR ACT

In Sierra Club v. Tennessee Valley Authority,¹¹ the Eleventh Circuit held that a regulatory safe harbor first established informally, and then formally, by the Alabama Department of Environmental Management ("ADEM"), which exempted "de minimis" violations of the stack emissions opacity requirement under Alabama's State Implementation Plan ("SIP") of the Clean Air Act ("CAA"),¹² was an illegal modification of the SIP and was thus invalid.¹³ The court also held that opacity data from a continuous opacity monitoring system ("COMS") could not be used to establish violations of the opacity rule prior to May 20, 1999.¹⁴ Finally, the court held that sovereign immunity protected the Tennessee Valley Authority ("TVA") from the assessment of civil penalties.¹⁵

Alabama maintains a SIP administered by ADEM to enforce the national ambient air quality standards developed by the EPA under the CAA.¹⁶ One of the SIP regulations prohibits the discharge of particu-late matter of greater than twenty percent opacity.¹⁷ Also, under the SIP, the approved method of measuring opacity is known as "Method 9," which is essentially a visual observation by a certified observer.¹⁸

Around October 2002, ADEM began informally applying a two percent de minimis rule as a safe harbor from the twenty percent opacity limit. Under this rule, stack emissions, as measured by COMS, were allowed to exceed the opacity limit for up to two percent of the plant's total operating hours in each quarter. ADEM formally adopted this rule as a regulation in October 2003.¹⁹

Also, in May 1999, ADEM adopted a "credible evidence rule" that allowed a regulatory violation of the SIP to be established by "any credible evidence or information."²⁰ The EPA mandated that each state with a SIP adopt such a rule to clarify that a test method expressly included in a SIP, such as Method 9, was not to be the exclusive method by which a violation could be established.²¹

The subject of the lawsuit in Sierra Club was a TVA operated power plant in Colbert, Alabama. As part of its operating permit, the TVA was required to install and maintain a COMS in each of the plant's stacks.²² The TVA used the COMS data, among other things, to take advantage of the two percent de minimis rule.²³ Seeking declaratory relief, injunctive relief, and civil penalities, the Sierra Club and the Alabama Environmental Council sued the TVA in September 2002, alleging that from 1997 through 2002 there were 8,933 violations of the twenty percent opacity limit set out in the SIP. The plaintiffs used the TVA's COMS data, which was submitted to ADEM in connection with the de minimis rule, to establish the violations.²⁴

The Eleventh Circuit court reversed the grant of summary judgment based on the two percent de minimis rule.²⁵ The court noted that the CAA prevents a state from unilaterally modifying a SIP regulation without EPA approval.²⁶ Because ADEM's two percent de minimis rule had never been submitted to the EPA for approval and because the rule effectively modified the twenty percent opacity limitation in the SIP by allowing emissions to exceed the limit for up to two percent of the plant's operating hours per quarter, the court held that the two percent rule was invalid.²⁷

As to the alleged violations that occurred prior to May 20, 1999,²⁸ however, the court affirmed the grant of summary judgment. The court held that prior to the adoption of the "credible evidence rule" on that date, Method 9 (visual observation by a certified inspector) was the sole method of determining compliance with the opacity limitation. Because the Sierra Club's case relied exclusively on COMS data to establish violations, it could not prove violations prior to the effective date of the credible evidence rule.²⁹

In United States v. Alabama Power Co. ("Alabama Power"),³⁰ the United States District Court for the Northern District of Alabama interpreted the scope of the EPA's exclusion from the CAA's pre-construction permit requirement for projects with the purpose of routine maintenance, repair, and replacement ("RMRR").³¹ The court held that the exclusion applies to projects that are routine within the industry, though not necessarily routine at any particular pollutant-emitting unit, and to projects that do not increase the maximum hourly emissions capacity of the unit.³²

Alabama Power is one of several power plant "life extension project" enforcement actions that the EPA began against various power companies in 1999.³³ In that case, as in others, the EPA contended that Alabama Power constructed new, or made modifications to, electrical power generating plants in Alabama without obtaining New Source Review permits, thereby violating the CAA's Prevention of Significant Deterioration ("PSD") provisions.³⁴

The court's interlocutory ruling in Alabama Power established the scope of the RMRR exclusion to be applied in the case.³⁵ The court described the issues as follows: "(1) the correct legal test for determining a physical change, including the correct legal test for determining routine maintenance, repair, and replacement; and (2) the correct legal test for determining a significant net emissions increase."³⁶ As to the first issue, the EPA contended that the RMRR exclusion applied only to projects that were routine at the particular unit under evaluation for a permit, while Alabama Power argued that "routine" meant routine in the industry, though not necessarily at any one unit.³⁷ As to the second issue, the EPA's procedure called for the plant operator to estimate the future actual annual emissions of the unit after the project, compared to its actual emissions before the project, to determine whether an increase in emissions would occur.³⁸ Alabama Power contended that a project resulted in an emissions increase only if it increased the maximum hourly emissions capacity at a plant.³⁹

The court reached its decision primarily by comparing two prior district court opinions that reached contrary holdings on the same two issues: United States v. Ohio Edison⁴⁰ and United States v. Duke Energy Corp.⁴¹ On the first question, whether the project constituted RMRR and thus did not require a pre-construction permit, the court in Ohio Edison ruled in favor of the EPA's position that the RMRR exclusion applied only to projects that were routine at the particular unit in question.⁴² The court based its holding on the fact that under the plain language of the CAA, the permit requirement applied to any physical change at a unit.⁴³ Therefore, any regulatory exemption to the statute must be narrowly construed to avoid conflicting with the statute's clear purpose.⁴⁴

On the other hand, in Duke Energy the court held that the RMRR exclusion applied to projects that were considered routine throughout the industry.⁴⁵ The court reasoned that prior to the CAA amendments of1977, which introduced the PSD pre-construction permit requirement, the EPA already excluded from its new source performance requirement regulations those modifications that were the result of maintenance, repair, or replacement that were "routine for a source category."⁴⁶ When Congress amended the CAA in 1977 with the PSD provisions, it explicitly defined "construction" under the 1977 provisions to include "modification" as defined in the 1970 CAA.⁴⁷ Thus, in Duke Energy the court held that Congress intended to amend the CAA within the existing regulatory framework, under which, for the purposes of the CAA, a modification did not include RMRR that was routine for an entire source category.⁴⁸

As to the second question, how to calculate an emissions increase for purposes of the permit requirement, the court again sided with the EPA in Ohio Edison, holding that the agency's "actual to projected future actual" emissions test was proper and consistent with the intent and purpose of the CAA.⁴⁹ The test captured as much new construction or...