Ryan Whaley Coldiron Shandy

In Sierra Club v. EPA, No. 07-4485 (6th Cir. Feb. 26, 2009) (E. Kentucky Power Coop.), a power company obtained an air quality operating permit in the 1970s for one of its coal-fired steam generators. Two decades later, the company operated the generator above its permitted output, but did not seek to revise its permit. When the company applied for a Title V permit, it did not make the state permitting agency aware of any changes in operation or to the underlying noncompliance. Nevertheless, the state agency granted the permit. After discovering the noncompliance several years later, EPA issued a notice of violation (NOV) and thereafter filed an enforcement lawsuit in federal court.

While EPA’s enforcement lawsuit was pending, the company sought to renew its Title V permit. After reviewing the application, the state agency submitted it to EPA. EPA did not object within the required 45 days. If EPA fails to act within the 45 day period, then “any person” may petition EPA within 60 days of the expiration of the period to object to the permit so long as that person demonstrates to EPA that the permit is not in compliance with the requirements of the Act. 42 U.S.C. § 7661d(b)(2). Because EPA failed to act, Sierra Club petitioned EPA to object to the permit based solely on the fact that EPA had issued the NOV three years earlier and had filed an enforcement action. Sierra Club claimed that those things alone “demonstrated” that the company’s permit was not in compliance with the requirements of the Act.

Sierra Club’s claim depended on the definition of “demonstrate.” The word is not defined in the Act or in its accompanying regulations. EPA suggested that to “demonstrate,” a petitioner must not only point toward a previously issued determination of compliance, but also must provide to EPA:
1. The information upon which the previous compliance decision was issued;
2. Additional information tending to show noncompliance;
3. Any factual and legal issues in dispute;
4. The amount of time that has lapsed between a previous compliance decision and the current objection; and
5. The likelihood that any pending enforcement case could resolve those issues.

The federal court found EPA’s definition of “demonstrate” to be convincing. Thus, two federal appeals courts, the Sixth and Eleventh Circuits, have agreed with EPA’s heightened definition of “demonstrate” in the context of third-party challenges to Title V operating permits. A challenger will need to do more than merely point toward a past compliance decision.
 
In addition to the above, the word “demonstrate” appears in the Act regarding numerous other provisions: promulgation of NAAQS; transportation air quality criteria; compliance with NESHAPs; exemption from noncompliance penalties; preconstruction requirements; protection of Class I areas; definition of “lowest achievable emission rate”; nonattainment plans and permits; ozone nonattainment plans; emission standards for motor vehicles; air quality monitoring; and state collection of fees.

To access the Sixth Circuit’s opinion, please click here: http://www.ca6.uscourts.gov/opinions.pdf/09a0071p-06.pdf.