The DOJ on November 26th, 2013 filed a petition for en banc review of the Third Circuit’s decision in United States v. EME Homer City Generation, 727 F.3d 274 (3d Cir. 2013), which held that New Source Review violations are one-time events and therefore enforcement actions must be brought within five years of the alleged violation. New Source Review applies to new institutions or upgrades which would result in a significant increase in a regulated pollutant. The EPA had argued that violating New Source Review preconstruction permit requirements, or failing to install BACT, were continuing violations and thus each day a source operated without the necessary permit or BACT it had engaged in a “fresh” violation of the Clean Air Act. Under this interpretation the EPA brought actions against industrial sources, often including utilities and refineries, alleging defects in modifications that were constructed many years in the past.
This interpretation, which the EPA has long used to bring belated enforcement actions against alleged NSR violators, has come under fire in a series of recent circuit opinions which have generally characterized NSR requirements as applying only to source construction and not continuing operation. The Third Circuit’s decision to this effect is consistent with earlier opinions from the Seventh, Eighth and Eleventh Circuits, which also found that failure to abide by New Source Review requirements were not continuing violations and thus must be brought within five years. See United States v. Midwest Generation, 720 F.3d 644 (7th Cir. 2013); Sierra Club v. Otter Tail Power Co., 615 F.3d 1008 (8th Cir. 2010); Nat’l Parks & Conservation Ass’n Inc. v. TVA, 502 F.3d 1316 (11th Cir. 2007). The Sixth Circuit, in Nat’l Parks & Conservation Ass’n Inc. v. TVA, 480 F.3d 410 (6th Cir. 2007), found a preconstruction NSR violation to be continuing in nature, but the Seventh and Third Circuits distinguished that case on the grounds that the Tennessee SIP at issue contained specific and unique language stating that NSR violations were continuous in nature.
In its November 26th petition for rehearing, the DOJ contends that the Third Circuit and others have “misread” the statutory language, which defines a BACT as an “emission limitation,” 42 U.S.C. § 7479(3), and in turn defines an “emission limitation” as a restriction on “emissions of air pollutants on a continuous basis, including any requirement relating to the operation or maintenance of a source to assure continuous emission reduction.” 42 U.S.C. § 7602(k). In the event the panel denies rehearing, it is possible that the DOJ will seek Supreme Court review either in this case or the Seventh Circuit’s Midwest Generation decision (where en banc review as denied on September 20 and a cert. petition would be due December 20).