On August 21, 2013, the 3rd Circuit Court of Appeals became the fourth federal appellate court to definitively limit USEPA’s enforcement authority to five years after an alleged Prevention of Significant Deterioration (PSD) violation.  In U.S. v. EME Homer City Generation, L.P., the 3rd Circuit upheld the US District Court for the Western District of Pennsylvania’s decision to dismiss USEPA’s claims that the current and former owners of the EME Homer City Generation power plant violated PSD and Title V permitting requirements.

The power plant became operational in 1969, and the alleged modifications that EPA argued should have triggered PSD permitting requirements (including the installation of best available control technology) occurred in 1991, 1994, 1995 and 1996.  The Court never determined whether PSD permitting requirements were triggered; instead, it held that because USEPA failed to bring an enforcement action until 2011, the five-year statute of limitation had long run on all of USEPA’s claims.

Specifically, the Court determined that injunctive relief was not appropriate against the former owner of the plant because the Court could not require a former owner to obtain a PSD permit and install pollution controls on a plant that it no longer owned.  The Court also held that USEPA could not obtain civil penalties or injunctive relief from the current owner of the plant because the current owner neither owned nor operated the plant when the allegedly illegal modifications occurred.  This decision is consistent with several Circuit decisions that require USEPA to bring enforcement claims related to PSD permitting within five years of the alleged violation.  See U.S. v. Midwest Generation, LLC, 720 F.3d 644 (7th Cir. 2013); Sierra Club v. Otter Tail Power, 615 F.3d 1008 (8th Cir. 2010); and Nat’l Parks and Conservation Ass’n v. TVA, 502 F.3d.1316 (11th Cir. 2007); see also previous frESH blog posts analyzing this issue – Seventh Circuit Affirms Dismissal Of NSR / PSD Claims and More PSD Decisions Pending.

The 6th Circuit remains the only Circuit to uphold USEPA’s interpretation that a violation of a PSD permitting requirement is ongoing and is not subject to a five-year statute of limitation.   This is a very narrow holding as it interprets the specific language in Tennessee’s state implementation plan.  In a recently filed district court case within the 6th Circuit, Sierra Club v. City of Holland, No. 1:08-cv-01183-PLM (W.D. Mich.), the defendant challenges the 6th Circuit’s understanding of USEPA’s enforcement authority and asks the court to follow the holding of the 7th Circuit in Midwest Generation.  Squire Sanders will continue to monitor this litigation to see whether the 6th Circuit will align with those other Circuits enforcing a five-year statute of limitation period for PSD enforcement cases.