5th Circuit sides with EPA in Clean Air Act case brought by Texas environmental groups

NEW ORLEANS – The U.S. Court of Appeals for the Fifth Circuit has issued its third opinion in an emissions case brought by the U.S. Environmental Protection Agency and a number of Texas environmental groups.

The court, which sided with the EPA. withdrew two of its previous opinions in the case. The first was published July 30, 2012 and replaced with an opinion from Oct. 12, 2012. Now the October opinion has been withdrawn and replaced by a ruling published March 25. All of the opinions reach the same conclusion.

The dispute arises from the EPA’s partial split opinion on the State of Texas’s “State Implementation Plan,” or SIP. This plan is required under the federal Clean Air Act, and is designed to give states the power to enact and regulate their own programs to limit harmful emissions.

States have wide discretion in creating and implementing an SIP, but changes must ultimately be approved by the EPA.

This case stems from the EPA’s partial approval and partial disapproval of Texas’s SIP in 2006.

Two opposing groups, environmental and industry groups, took issue with the EPA’s ruling.

The environmental petitioners included the Environmental Integrity Project, Sierra Club, Environment Texas Citizen Lobby Inc., Citizens for Environmental Justice, Texas Environmental Justice Advocacy Services, Air Alliance Houston and Community In-Power and Development Association. These groups opposed a portion of the SIP that the EPA approved.

Industry petitioners, which included Luminant Generation Co. LLC, Oak Grove Management Co. LLC, Big Brown Power Co. LLC and Sandow Power Co. LLC, objected to the EPA’s partial disapproval.

The portion of the SIP at issue is a section that creates an affirmative defense against civil penalties for emissions created during planned and unplanned start-up, shutdown and maintenance/malfunction (SSM)  events. The EPA approved of the affirmative defense for unplanned SSM events but disapproved of its use in planned events, saying that “because these events are planned,we believe that sources should be able to comply with applicable emission limits during these periods of time.”

The environmental groups claimed that the agency’s approval of the affirmative defense for unplanned SSM events is arbitrary and capricious. They argue that the EPA’s ruling conflicts with language of the Clean Air Act that authorizes civil penalties in EPA and citizen enforcement actions. The EPA answers that in this case the affirmative defense is “narrowly tailored to address unavoidable, excess emissions and consistent with the penalty assessment criteria” in the Act.

Chief Judge Carl E. Stewart, writing on behalf of concurring Circuit Judges Fortunato P. Benavides and James E. Graves, agreed with the EPA on this point and said the agency did not act arbitrarily or capriciously in its partial approval of the changes to the SIP.

The industry petitioners' main argument was that the disapproved provision of the SIP fully complies with the Clean Air Act and that the EPA’s disapproval is contrary to law.

Alternatively, they argued, the EPA should have approved affirmative defenses for planned shutdown and start-up activity, even if it disapproved of it for planned maintenance activity.

The EPA argued that it is not infeasible for sources to meet applicable limits during planned activity.

The court sided with the EPA although it declined to address the issue of severing shutdown and start-up activity from maintenance activity.

The panel denied both groups petitions for review writing that “the EPA did not act arbitrarily or capriciously, contrary to law, or in excess of its statutory authority, in its partial approval and partial disapproval of Texas’s SIP revision."

Case No. 10-60934.