United States District Court, Southern District of Illinois
February 19, 2003
UNITED STATES OF AMERICA, PLAINTIFF,
ILLINOIS POWER COMPANY AND DYNEGY MIDWEST GENERATION, INC., DEFENDANTS.
The opinion of the court was delivered by: Michael J. Reagan, District Judge
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT
In its latest complaint, the United States of America ("the
Government") brings suit against Defendants, Illinois Power Company
("Illinois Power") and Dynegy Midwest Generation, Inc. ("Dynegy")
pursuant to the Clean Air Act, 42 U.S.C. § 7401-7671q ("the Act"), for
injunctive relief and the assessment of civil penalties for violations of
the Prevention of Significant Deterioration ("PSD") provisions of the
Act, 42 U.S.C. § 7470-92, the New Source Performance Standards
("NSPS") of the Act, 42 U.S.C. § 7411, and the federally approved and
enforceable Illinois State Implementation Plan ("Illinois SIP").
In general, the Government alleges that Illinois Power modified three
electric generating units at the Baldwin Power Station coal-fired
electricity generating power plant in Randolph County, Illinois which was
operated by Illinois Power and then later by Dynegy without obtaining
appropriate permits and without installing the best available control
technology to control emissions of nitrogen oxides, sulfur dioxide, and
particulate matter as the Clean Air Act, applicable federal regulations,
and the Illinois SIP require.
Specifically, the Government makes three claims for relief. First, the
Government alleges that nine construction projects undertaken between
1982 and 1994 were done without obtaining a construction permit and were
operated thereafter without an operating permit. Second, the Government
alleges that two of the nine construction projects were done without
notifying the United States Environmental Protection Agency ("EPA") of
the projects before they began, without conducting a performance test
within the regulatory time period, without informing the EPA of the test
results, and without ensuring that the modifications complied with the
NSPS emissions requirements. Third, the Government alleges that the nine
construction projects were done without state construction permits and
were thereafter operated without operating permits in violation of
Illinois' federally enforceable State Implementation Plan.
Now before the Court is Illinois Power and Dynegy's Joint Motion for
Partial Summary Judgment (Doc. 338) on the Government's first and third
claims for relief, as well as a portion of the second claim.
II. STANDARD OF REVIEW
As the United States Supreme Court as stated, summary judgment is not a
procedural shortcut disfavored under the law, but rather is an integral
part of the federal rules as a whole, which are designed to secure the
just, speedy, and inexpensive determination of every action. Celotex
Corp. v. Catrett, 477 U.S. 317, 327 (1986). See also United Ass'n of
Black Landscapers v. City of Milwaukee, 916 F.2d 1261, 1267-68 (7th Cir.
1990), cert. denied, 111 S.Ct. 1317 (1991). Motions for summary judgment
are governed by Rule 56(c) of the Federal Rules of Civil Procedure, which
provides in relevant part:
The judgment sought shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
a judgment as a matter of law.
Once a party has made a properly-supported motion for summary
judgment, the opposing party may not simply rest upon the pleadings but
must instead submit evidentiary materials which "set forth specific facts
showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). A
genuine issue of material fact exists whenever "there is sufficient
evidence favoring the nonmoving party for a jury to return a verdict for
that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The nonmoving party bears the burden of demonstrating that such a genuine
issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586-87 (1986). See also Oliver v. Oshkosh
Truck Corp., 96 F.3d 992, 997 (7th Cir. 1996), cert. denied, 520 U.S. 1116
(1997). It is not the duty of the Court to scour the record in search of
evidence to defeat a motion for summary judgment; rather, the nonmoving
party bears the responsibility of identifying the evidence upon which he
relies. Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th
Cir. 1996). When the moving party has met the standard of Rule 56,
summary judgment is mandatory. Celotex, 477 U.S. at 322-23. See also
Shields Enters., Inc. v. First Chi. Corp., 975 F.2d 1290, 1294 (7th Cir.
In evaluating a motion for summary judgment, a court should draw all
reasonable inferences from undisputed facts in favor of the nonmoving
party and should view the disputed evidence in the light most favorable to
the nonmoving party. Estate of Cole v. Fromm, 94 F.3d 254, 257 (7th
Cir. 1996), cert. denied, 519 U.S. 1109 (1997). The mere existence of a
factual dispute, by itself, is not sufficient to bar summary judgment.
Anderson, 477 U.S. at 248; See also JPM Inc. v. John Deere Indus. Equip.
Co., 94 F.3d 270, 273 (7th Cir. 1996). Only factual disputes that might
affect the outcome of the suit in light of the substantive law will
preclude summary judgment. Id. Irrelevant or unnecessary facts do not
deter summary judgment — even when in dispute. Clifton v.
Schafer, 969 F.2d 278, 281 (7th Cir. 1992).
III. STATUTORY FRAMEWORK
The Clean Air Act establishes a regulatory scheme designed "to protect
and enhance the quality of the Nation's air so as to promote the public
health and welfare and the productive capacity of its population."
42 U.S.C. § 7401(b)(1). To accomplish this goal, the Act requires
the Administrator of the EPA to identify and prepare air quality criteria
for each air pollutant, emissions of which may endanger public health or
welfare, and the presence of which results from numerous or diverse
mobile or stationary sources. 42 U.S.C. § 7409. Thereafter, the EPA
is required to promulgate regulations establishing national ambient air
quality standards ("NAAQS") specific to each air pollutant. Id.
To promote the NAAQS, each state is required to designate those areas
within its boundaries where the air quality is better or worse than the
NAAQS for each criteria pollutant. An area that meets the NAAQS for a
particular pollutant is an "attainment" area, an area that does not meet
the NAAQS is a "nonattainment"
area, and an area that cannot be
classified due to insufficient data is "unclassifiable." To ensure that
the attainment areas continue to maintain the national standards, the Act
sets forth requirements for the prevention of significant deterioration
("PSD") of air quality in these areas. 42 U.S.C. § 7470-7492. The
federal PSD regulations are set forth at 40 C.F.R. § 52.21.
In furtherance of the goal to prevent deterioration of the current air
quality, the Act also requires the Administrator of the EPA to publish a
list of categories of stationary sources that emit or may emit any air
pollutant and to promulgate regulations establishing federal standards of
performance for "new sources" of air pollutants within each of these
categories. 42 U.S.C. § 7411(b)(1)(A)-(B). "New sources" are defined
as stationary sources, the construction or modification of which is
commenced after the publication of the regulations or proposed
regulations prescribing a standard of performance applicable to each
source. 42 U.S.C. § 7411(a)(2). These standards are known as New
Source Performance Standards ("NSPS") and are designed to assure that any
new construction or modification of an existing structure is completed
within the regulations of the Clean Air Act.
To accomplish these goals, the Act mandates that each state adopt a
State Implementation Plan ("SIP") that provides for the maintenance,
implementation, and enforcement of the NAAQS, such as emission
limitations and such other measures as may be necessary to prevent
significant deterioration of air quality. 42 U.S.C. § 7410. Each
state's SIP is enforceable by the EPA. 42 U.S.C. § 7413(a)(1). In
1972, Illinois complied with the Act and adopted its SIP. As mandated,
Illinois' SIP contains a provision prohibiting the commencement of
construction of a new emission source or modification of an existing
source without first obtaining a construction permit. 35 IAC §
A. Preconstruction Permits Claims
(First Claim & Portion of Third Claim)
As stated above, the Government alleges that nine modification projects
constructed at Baldwin Station between 1982 and 1994 were done without
obtaining preconstruction permits. In support of their motion, Defendants
argue that all of the alleged violations at issue occurred more than five
years before the Government filed its initial complaint and are barred by
the five-year statute of limitations provided under the general federal
statute of limitations, 28 U.S.C. § 2462.
In opposition, the Government concedes that the five-year statute of
limitations period applies, but argues that the alleged violations are
continuing in nature and toll the statute of limitations. In other
words, the Government argues that each day of operation at Baldwin
Station constitutes additional violations of the Clean Air Act provisions
under which this suit is brought. The Court disagrees.
The Clean Air Act specifies no period during which claims of violation
may be brought. Thus, the general federal statute of limitations,
28 U.S.C. § 2462, is applicable to the Act. United States v. Murphy
Oil USA, Inc., 143 F. Supp.2d 1054, 1080 (W.D.Wis. 2001); United States
v. Westvaco Corp., 144 F. Supp.2d 439, 442 (D.Md. 2001). Title 28 of
U.S.C. § 2462 provides:
Except as otherwise provided by Act of Congress, an
action, suit or proceeding for the enforcement of any
civil fine, penalty, or forfeiture, pecuniary or
otherwise, shall not be entertained unless
commenced within five years from the date when the claim first
accrued, if, within the same period, the offender or
the property is found within the United States in
order that proper service may be made thereon.
A claim "first accrues" under § 2642 on the date
that a violation first occurs. 3M Co. v. Browner,
17 F.3d 1453, 1462 (D.C. Cir. 1994). However, where a
violation is ongoing, the statute of limitations is
tolled for as long as the violation continues. Havens
Realty Corp. v. Coleman, 455 U.S. 363, 380 (1982).
The Government makes three allegations within its
first claim for relief. First, the Government alleges
that Defendants violated and continue to violate
42 U.S.C. § 7475(a) and § 7477 of the Act and
the PSD regulations set forth by the EPA in
40 C.F.R. § 52.21 by "undertaking . . . major
modifications and/or operating the Baldwin Station
facility after the modifications without first obtaining
a PSD permit as required by 40 C.F.R. § 52.21(i)(1)
and 52.21(r)(1)." Compl. ¶ 64. Second, the Government
alleges that Defendants have not installed and operated
the best available control technology ("BACT") for the
control of nitrogen oxide ("NOx"), sulfur dioxide
("SO2"), and particulate matter ("PM") as required by
40 C.F.R. § 52.21(j) ("BACT violations"). Third,
the Government alleges that Defendants failed and
continue to fail to demonstrate that the modifications
"would not cause or contribute to air pollution in
violation of any ambient air quality standard or any
specified incremental amount as required by
40 C.F.R. § 52.21(k); to perform an analysis of
ambient air quality in the area as required by
40 C.F.R. § 52.21(m); and, to submit to Illinois or
EPA all information necessary to perform any analysis or
make those determinations required under
40 C.F.R. § 52.21 as required by
40 C.F.R. § 52.21(n)" ("preconstruction analysis
Although the latest complaint refers to Defendants'
failure to obtain a permit before undertaking "major
modifications and/or operating the Baldwin Station
facility after the modifications," the specific
provisions of the Clean Air Act that the Government cites
Defendants with violating contain preconstruction permit
requirements, not operation permit requirements. For
whatever reason, the Government chose to allege a
violation of the Act's preconstruction permit
requirements contained in 42 U.S.C. § 7475 rather
than a violation of the Act's operating permit
requirements as set forth in 42 U.S.C. § 7661, et
seq. Therefore, the only issue presented in the first
claim is whether Defendants violated the Act's
preconstruction permit requirements.
In contrast, the Government has alleged violations of
the Illinois SIP's preconstruction permit and operating
permit requirements under 35 IAC § 201.142 and §
201.143 in its third claim. Compl. ¶ 81. The Court
will address the SIP operating permit requirements infra
in § C.
Under the Clean Air Act, owners are required to obtain
a preconstruction permit prior to commencing
construction of a major modification. Section 7475,
"Preconstruction requirements," provides in relevant
(a) No major emitting facilities . . . may be
constructed in any area to which this part applies
(1) a permit has been issued for such proposed
facility in accordance with this part setting forth
emission limitations for such facility which conform
to the requirements of this part; and
(4) the proposed facility is subject to the best
available control technology for each pollutant
subject to regulation under this chapter emitted
from, or which results from, such facility.
42 U.S.C. § 7475(a) (emphasis added).
The relevant EPA regulations provide:
No stationary source or modification to which the
requirements of paragraphs (j) through (r) of this
section apply shall begin actual construction without
a permit which states that the stationary source or
modification would meet those requirements. The
Administrator has authority to issue any such permit.
. . . [A]ny owner or operator of a source or
modification subject to this section who commences
construction after the effective date of these
regulations without applying for and receiving
approval hereunder, shall be subject to appropriate
40 C.F.R. § 52.21(i)(1); (r)(1). 40 C.F.R. § 52.21(k);(m); and
(n) require the facility owner to demonstrate that allowable emission
increases from the proposed source or modification would not cause or
contribute to air pollution in violation of the NAAQS.
In effort to enforce this federal scheme, the Illinois SIP provides:
No person shall cause or allow the construction of any
new emission source or any new air pollution control
equipment, or cause or allow the modifications or any
existing emission source or air pollution control
equipment, without first obtaining a construction
permit from the Agency . . .
35 IAC § 201.142.
Because these provisions require certain limitations
in emissions and application of the best available
control technology before a preconstruction permit can
be obtained, the Government argues that any violation of
the preconstruction permit provisions is ongoing. As
stated above, the Court disagrees.
Although the Seventh Circuit has not addressed this
issue, every district court which has, except two,*fn1
has concluded that preconstruction permit violations do
not constitute violations that continue past the
completion of construction. United States v. Brotech
Corp., No. 00-2428, 2000 WL 1368023, at *3 (E.D. Penn.
Sept. 19, 2000); Westvaco Corp., 144 F. Supp.2d at 444;
United States v. Campbell Soup Co., No. S-95-1854, 1997
WL 258894, at *1-2 (E.D.Cal. March 11, 1997); Murphy
Oil, 43 F. Supp.2d 1084.*fn2
Even without this precedence, the same result is
gleaned from this Court's review of the Act itself.
First, it is important to note that the Act provides
separate requirements for preconstruction permits and
operating permits. See 42 U.S.C. § 7475
(preconstruction permits) and § 7661, et seq.
(operation permits). That itself supports treating the
statute of limitations on preconstruction violations
differently than on operational permit violations.
Preconstruction permits have a finite existence while
operational permits can be ongoing violations.
Second, the plain language of the provisions
demonstrates that any preconstruction violation occurs
when the actual construction is commenced, and not at
some later point in time. Under 42 U.S.C. § 7475(a)(3)
and (4), the operator of a modified source is required
to install the best available control technology and to
demonstrate that the construction or operation of the
modified source will not violate certain emissions
standards. However, these requirements, along with all
of the requirements enumerated in § 7475, must be
undertaken prior to the construction or modification of
the facility. See § 7475(a) (providing "[n]o major
emitting facilities . . . may be constructed in any area
to which this part applies unless" certain conditions
are met) and § 7477 (providing the "administrator
shall . . . take such measures . . . as necessary to
prevent the construction or modification of a major
emitting facility which does not conform to the
requirements of this part") (emphasis added).
The same result is reached under the preconstruction
permit requirement found in the federal regulations
contained in 40 C.F.R. § 52.2. United States v.
Louisiana-Pacific Corp., 682 F. Supp. 1122, 1130
(D.Colo. 1987). See also § 52.21(i)(1) (providing
"[n]o stationary source or modification . . . shall
begin actual construction without a permit") (emphasis
Since nothing in the Illinois SIP preconstruction
permit requirements found at 35 IAC § 201.142
mandates anything other than obtaining a construction
permit from the EPA, the Court finds that a failure to
comply with the Illinois SIP preconstruction permit
requirements also occurs upon construction of the source
Although the Court recognizes that the underlying
intent behind the Act, the EPA regulations, and the
Illinois SIP is to assure continuing air quality, these
provisions cannot reasonably be construed to mean that
building or altering a machine without a permit is a
violation that continues as long as the machine exists
or is operated. Therefore, the Court finds that a
violation of the Clean Air Act's preconstruction permit
requirements under 42 U.S.C. § 7475, a violation of
the EPA regulations implementing the Act, or a violation
of the Illinois SIP under 35 IAC § 201.142 occurs at
the time of the construction or modification and is not
continuing in nature.
Accordingly, Defendants' alleged failure to comply
with any preconstruction permit requirements resulted,
if at all, in discrete violations that were complete at
the time of construction from 1982 to April, 1994.
Since this case was brought in November, 1999, more than
five years after the latest modification in April,
1994, the civil penalties*fn3
requested under the
Government's first and third claims for relief for
preconstruction permit violations brought under
the Clean Air Act, EPA regulations, and the Illinois SIP for
modifications at the Baldwin Station undertaken between
1982 and 1994 are barred by the statute of limitations.
As such, the Court grants Defendants' motion for partial
summary judgment in this regard.
B. NSPS Claim — Failure to Notify EPA of Construction
and Failure to Conduct a Performance Test or Inform the EPA of
the Test Results (Portion of Second Claim)
In its second claim for relief, the Government alleges
that Defendants violated the New Source Performance
Standards ("NSPS"). The claims relevant to this motion
allege that two of the nine construction projects at
Baldwin Station were done without notifying the EPA of
the projects before they began in violation of
40 C.F.R. § 60.7(a)(4), without conducting a
performance test within the regulatory time period or
informing the EPA of the test results in violation of
40 C.F.R. § 60.8, and without conducting the
performance test within the methods described in
40 C.F.R. § 60.48a.*fn4
In support of their motion for summary judgment,
Defendants again argue that these alleged violations are
barred by the five year statute of limitations.
Likewise, the Government again argues that these are
continuing violations which toll the statute of
limitations. The Court agrees with Defendants.
The relevant regulations provide as follows:
40 C.F.R. § 60.7
(a) Any owner or operator subject to the provisions of
this part shall furnish the Administrator written
notification or, if acceptable to both the
Administrator and the owner or operator of a source,
electronic notification, as follows:
(4) A notification of any physical or operational
change to an existing facility which may increase the
emission rate of any air pollutant to which a standard
applies, unless that change is specifically exempted
under an applicable subpart or in § 60.14(e). This
notice shall be postmarked 60 days or as soon as
practicable before the change is commenced and shall
include information describing the precise nature of
the change, present and proposed emission control
systems, productive capacity of the facility before and
after the change, and the expected complete date of
40 C.F.R. § 60.8
(a) Within 60 days after achieving the maximum
production rate at which the affected facility will be
operated, but not later than 180 days after initial
startup of such facility . . ., the owner or operator
of the facility shall conduct performance test(s) and
furnish the Administrator a written report of the
results of such performance test(s).
For the reasons and analysis given above in § A, as well as the
plain language of the relevant provisions, the Court again finds that
Defendants' alleged failure to comply with the New Source Performance
Standards resulted, if at all, in discrete violations that were complete
at the time of construction on the two heating units in question in
1985, 1988, 1990, and 1991.
Since this case was brought in 1999, more
than five years after the latest modification, the civil penalties
requested under the Government's second claim for relief for NSPS
violations are barred by the statute of limitations. As such, the Court
grants Defendants' motion for partial summary judgment in this regard.
C. Illinois SIP claim — Failure to Obtain Operating
Permit (Remaining Part of Third Claim)
In the remaining part of its third claim for relief, the Government
alleges that Defendants operated Units 1, 2, and 3 at Baldwin Station
(upon which the nine modifications at issue were made) without applying
for or obtaining operating permits for those modifications as required by
the Illinois SIP, 35 IAC § 201.143. Compl. ¶ 81. In support of
their motion for summary judgment, Defendants argue that it is undisputed
that operating permits were in effect for all three of the units at the
time of the alleged modification projects. In response, the Government
concedes that Defendants had various operating permits during the time of
the modifications, but argues that Defendants never obtained new or
revised operating permits after the modifications were completed.
Upon review of the parties' submissions, there appears to be a genuine
issue of material fact regarding whether the permits in effect at the
time of the modifications were sufficient to cover the modifications
made. Therefore, summary judgment regarding this issue is not
appropriate. Accordingly, the Court denies Defendants' motion with regard
to this portion of the third claim for relief.
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART
Defendants' motion for partial summary judgment (Doc. 338).
Specifically, the Court grants summary judgment with regard to the
civil penalties requested under the Government's first and third claims
for relief for preconstruction permit violations brought under the Clean
Air Act, EPA regulations, and the Illinois SIP for modifications at the
Baldwin Station undertaken between 1982 and 1994 as these claims are
barred by the statute of limitations. The Court also grants summary
judgment with regard to the civil penalties requested under a portion of
the Government's second claim for relief for NSPS violations as these
claim are also barred by the statute of limitations. The Court denies
summary judgment with regard to the alleged Illinois SIP operating permit
violations set forth in the third claim for relief.
The effect of this Order leaves the Government with a claim for civil
penalties and injunctive relief for NSPS emissions violations under
40 C.F.R. § 60.42a(a), 40 C.F.R. § 60.43a(a), and
40 C.F.R. § 60.44a(a) as set forth in the remaining portion of the
second claim for relief; a claim for civil penalties and injunctive
relief for Illinois SIP operating permit violations under 35 IAC §
201.143 as set forth in the remaining portion of its third claim for
relief; and claims for injunctive relief under all three claims for
Accordingly, the Government is ORDERED to file an amended complaint in
compliance with this Order by March 10, 2003. The Government shall set
forth no new allegations without leave of Court. Defendants are ORDERED
to answer the amended complaint 14 days thereafter. Defendants shall not
amend the substance of their answers given to the previous complaint
without leave of Court.
IT IS SO ORDERED.