Sierra Club v. Otter Tail Power Company

Aug 12: In the U.S. Court of Appeals, Eighth Circuit, Case No. 09-2862. Sierra Club brought this Clean Air Act (CAA) citizen suit against Otter Tail Power Company, MDU Resources Group, and Northwestern Energy, who own and operate the Big Stone Generating Station, a coal fired power plant near the border between South Dakota and Minnesota. Sierra Club alleged that Otter Tail violated the CAA by failing to obtain permits for a series of modifications to the plant and by exceeding applicable emission limits. The district court granted Otter Tail's motion to dismiss, and Sierra Club timely appealed. The Appeals Court affirmed the district court opinion.

 

    By way of background, the Appeals Court explains that the Big Stone Generating Station is a 450 megawatt coal fired power plant located in Big Stone City, South Dakota. Otter Tail Power Company operates the plant. Big Stone has undergone various physical and operational modifications since it began operating in 1975. Sierra Club alleges that three of those modifications triggered PSD and NSPS obligations which Otter Tail has violated.

 

    The Appeals Court indicates that Sierra Club commenced this suit in June 2008 under the CAA's "citizen suit" provision, 42 U.S.C. § 7604(a), seeking assessment of civil penalties against Otter Tail as well as declaratory and injunctive relief. It alleged that Otter Tail had violated the CAA by failing to obtain PSD permits before commencing the three modifications described above. It also claimed that Otter Tail continued to violate the CAA by operating without permits and without abiding by the BACT emission limits which would have been imposed as part of the PSD permitting process. Finally, Sierra Club alleged that Big Stone was operating in violation of NSPS limits triggered by the 2001 ethanol plant project.

 

    Otter Tail moved to dismiss, arguing that Sierra Club's PSD claims were untimely and that the NSPS claim was an impermissible collateral attack on Otter Tail's operating permit. The district court granted the motion. It interpreted the CAA's PSD provisions as imposing upon operators only a one time obligation to obtain a permit before construction or modification of a facility, as opposed to imposing ongoing conditions on its operation. It reasoned that any violation of these provisions would have thus occurred when modifications were commenced. Since the last modification was begun in 2001, Sierra Club's PSD civil penalty claims were barred by the five year statute of limitations in 28 U.S.C. § 2462. Although § 2462 does not apply to equitable relief, the district court decided that Sierra Club's claims for equitable relief were foreclosed under the concurrent remedy doctrine because its civil penalty claims were time barred.

 

    The district court dismissed the NSPS claim for lack of subject matter jurisdiction. Because that claim essentially attacks the terms of Otter Tail's amended Title V permit rather than Otter Tail's compliance with the permit, the district court concluded that Sierra Club should have raised the NSPS issue in administrative proceedings during the permitting process. Since judicial review of issues that may be raised through that process is vested exclusively in the courts of appeals, the district court determined that it lacked jurisdiction over the NSPS claim.

 

    On one issue, the Appeals Court explained its rationale and said, "Sierra Club may be correct that the district court's interpretation of §§ 7661d and 7607 restricts the permit shield's applicability, but this does not persuade us that its interpretation is erroneous. While § 7661c(f) is a statutory defense to liability, §7607(b)(2) limits district court subject matter jurisdiction. To the extent the two provisions are in tension, the jurisdictional limit is paramount. See Am. Fire & Cas. Co. v. Finn, 341 U.S. 6, 17–18 (1951) ('The jurisdiction of the federal courts is carefully guarded against expansion by judicial interpretation . . . .'); Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994) ('It is to be presumed that a cause lies outside [the] limited jurisdiction' of the federal courts.). Sierra Club argues that our interpretation of the jurisdictional provisions should not curtail the scope of the permit shield, but the more fundamental rule of construction holds that we must not expand federal court jurisdiction in service to a broad reading of the permit shield.

 

    "Moreover, our interpretation of § 7607(b) does not render the permit shield entirely superfluous. Our holding is limited to the circumstances of this case. While we decline to delve into other contexts in which the permit shield may play a role, we note that the considerations underlying our decision would not necessarily be present . . . We conclude that because Sierra Club could have obtained judicial review of its NSPS claim through the process established by 42 U.S.C. § 7661d, district court review of that claim is foreclosed by § 7607(b)(2). Accordingly, the district court did not err in dismissing the claim."

 

    Access the complete opinion (click here).