Environmental Law - Travis M. Trimble

• Publication year: 2009

Environmental Lawby Travis M. Trimble^*

The United States Court of Appeals for the Eleventh Circuit decided cases in 2008 that addressed the scope of agency discretion in several contexts. In an issue of first impression under the Clean Air Act (CAA),¹ the court held that the Environmental Protection Agency (EPA) properly exercised its discretion in not objecting to the issuance of an operating permit to a power company that the agency had earlier formally accused of violating the CAA.² In another case, the court held that the Federal Emergency Management Agency had the discretion to protect endangered species while administering the National Flood Insurance Act³ and thus was required to comply with the Endangered Species Act⁴ to ensure that its actions did not jeopardize endangered species.⁵ In a case involving the National Environmental Policy Act (NEPA),⁶ the court held that the United States District Court for the Southern District of Florida had not afforded the EPA the proper deference in reviewing the agency's Environmental Impact Statement prepared pursuant to NEPA, and the agency's subsequent decision to issue Clean Water Act⁷ permits allowing mining in wetlands.⁸ The court also held that the EPA did not act arbitrarily or capriciously in issuing a final rule altering the obligations of operators of underground injection wells under the Safe Drinking Water Act.⁹ Finally, the court held that the government's remediation plan at a federal facility that had not been listed on the National Priorities List was selected pursuant to provisions of the Comprehensive Environmental Response, Compensation, and Liability Act¹⁰ that deprived the federal district court of jurisdiction to hear a citizen suit challenging the sufficiency of the plan.¹¹

I. CLEAN AIR ACT

In Sierra Club v. Johnson,¹² in an issue of first impression, the Eleventh Circuit held that the EPA had discretion not to object to the Georgia Environmental Protection Division's (EPD) issuance of a Clean Air Act (CAA)¹³ Title V operating permit to a power company when the EPA had previously issued a notice of violation and filed a civil enforcement action against the power company for alleged violations of the CAA.¹⁴

The CAA creates a comprehensive regulatory scheme to prevent and control air pollution.¹⁵ Under Title V of the CAA, every major source of air pollution must obtain an operating permit specific to that source.¹⁶ The permit sets out emissions limits and monitoring requirements for that source.¹⁷ An operating permit may also include limits for the prevention of significant deterioration (PSD) of air quality in certain geographical areas of the country; however, sources in existence as of August 7, 1977, are not required to comply with PSD limits.¹⁸

In states in which the EPA has delegated permitting authority, such as Georgia, the state issues Title V operating permits, but the EPA retains the right (and the duty) to object to state-issued permits that do not comply with the CAA.¹⁹ The EPA itself may challenge a permit, or, if the EPA does not object to a permit, any person may challenge this decision by petitioning the EPA.²⁰ In this circumstance, the CAA provides that "'[t]he Administrator [of the EPA] shall issue an objection

. . . if the petitioner demonstrates to the Administrator that the permit is not in compliance with the requirements of [the CAA].'"²¹

At issue in this case were operating permits issued by the Georgia EPD to two of Georgia Power Company's electric generating plants: Bowen and Scherer.²² Georgia Power added two steam emission units to Plant Scherer in the 1970s and modified a boiler at Plant Bowen in the 1990s without obtaining operating permits that applied PSD limits to the plants. In 1999 the EPA issued a notice of violation to Georgia Power, stating that these upgrades constituted major modifications to the plants that triggered the PSD requirements. Georgia Power did not correct the alleged violations, and in the same year, the EPA filed a civil enforcement action seeking an injunction and penalties. Georgia Power answered, contending that the units at Scherer were exempt from PSD requirements because Georgia Power began construction on the units in 1974. Additionally, Georgia Power contended that the Bowen modifications had not resulted in net emission increases and therefore were not major modifications. The United States District Court for the Northern District of Georgia administratively closed the enforcement action pending a decision from a multidistrict litigation panel relevant to the issues raised by the parties. In 2002 the court denied without prejudice a motion by the United States to reopen the case. Subsequently, the United States did not attempt to reopen the case.²³

In 2004 Georgia Power applied for—and the EPD issued—renewed Title V permits for the plants without including PSD requirements. The EPA did not object to the renewed permits. The petitioners petitioned the EPA to object to the permits, basing their challenge on the EPA's earlier violation notice and civil enforcement action.²⁴ The EPA denied the petition, concluding that the violation notice and civil enforcement action were not conclusive evidence of a CAA violation but merely "initial steps in the process" of determining whether a violation had occurred.²⁵ Thus, the EPA concluded that it had the discretion not to object to the permits because the petitioners failed to sufficiently demonstrate that the permits were not in compliance with the CAA.²⁶

The Eleventh Circuit affirmed the agency's denial of the petition, holding that the EPA did not act arbitrarily or capriciously in concluding that the petitioners had not demonstrated that the permits were not in compliance with the CAA.²⁷ First, the court agreed with the EPA that the second prong of the CAA's permit review provision,²⁸ which requires the EPA to object to a permit "'if the petitioner demonstrates . . . that the permit is not in compliance with the . . . [CAA],'"²⁹ is both discretionary and ambiguous: the EPA must judge whether a petitioner has demonstrated noncompliance, and neither the CAA nor its regulations define the term "demonstrates."³⁰ Thus, the court concluded that it must defer to the EPA's judgment that the petitioners failed to demonstrate noncompliance so long as the agency's decision was reasonable.³¹

Second, the court determined that the EPA's interpretation was reasonable.³² The petitioners' only evidence that the Georgia Power permits were not in compliance with the CAA was the EPA's 1999 notice of violation and subsequent civil enforcement action.³³ The court noted that, under the CAA, the EPA could issue a notice of violation based on "'any information available'" to the agency, such as, "'a staff report, newspaper clipping, [or] anonymous phone tip,'"—a standard the court described as "exceedingly low."³⁴ Thus, a notice of violation would not necessarily indicate that a violation had occurred.³⁵

Furthermore, the court concluded that the dormant civil enforcement action did not necessarily demonstrate the permits' noncompliance.³⁶ The court noted that the EPA's allegations in the action were "fiercely contested" by Georgia Power and that there had been no determination on the merits of the case.³⁷ The court acknowledged that by denying the petition of the petitioners, the EPA had put itself "in the peculiar position of defending its decision not to object to the operating permits without backing away from its violation notice or enforcement action,"³⁸ but the court concluded nonetheless that the agency's decision was reasonable.³⁹

The court also acknowledged (but rejected) the United States Court of Appeals for the Second Circuit's reasoning in New York Public Interest Research Group, Inc. v. Johnson,⁴⁰ that reached the opposite conclu-sion.⁴¹ In Johnson the Second Circuit held that the petitioners' evidence, which consisted of a state-issued violation notice and a pending civil enforcement action, was sufficient to demonstrate to the EPA that the permits at issue did not comply with the CAA.⁴² According to the Eleventh Circuit, the Second Circuit based its holding on four rationales: first, the agency must make a finding that a violation of the CAA occurred before issuing a notice of violation; second, an agency's civil enforcement complaint is more significant than other complaints because of procedures undertaken by the agency before issuing the complaint; third, the agency is in a "'privileged position to monitor and regulate'" permitees and thus could claim to be uncertain of which permit requirements applied; and fourth, private parties should not be required to duplicate an agency's findings of noncompliance.⁴³

The Eleventh Circuit was not persuaded by these arguments.⁴⁴ First, it explained that the agency's findings to support a notice of violation could be supported by "any information available," which as the court already noted, was a low standard of proof.⁴⁵ Second, the court refused to distinguish an agency complaint from any other because, as with all complaints, "the allegations it contains must be proven."⁴⁶ Third, in addressing the agency's "privileged position" to monitor permittees, the court explained that the agency was also in a privileged position to assess "the current strength of its case" in evaluating whether the issue had been resolved.⁴⁷ Finally, the court challenged the Second Circuit's reasoning that a private petitioner should not be required to duplicate an investigation already made by the agency.⁴⁸ According to the court, allowing a private petitioner merely to rely on an agency-issued notice of violation would "render meaningless" the statutory provision's directive that the petitioner "demonstrate" noncompliance.⁴⁹ Further, the court added that "[h]ad Congress intended the Administrator to object to an operating permit every time a violation notice is issued, it could have easily made that an explicit...