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Nucor Steel-Arkansas v. Pruitt

United States District Court, District of Columbia

March 31, 2017

SCOTT PRUITT, in his official capacity as Administrator, U.S. Environmental Protection Agency, Defendant.



         This case is nominally a procedural action that Plaintiffs Nucor Steel-Arkansas and Nucor-Yamato Steel Company (collectively, “Nucor”) have filed against the Administrator of the Environmental Protection Agency (“EPA”) pursuant to one of the citizen-suit provisions of the Clean Air Act (“CAA”), 42 U.S.C. §§ 7401-7671q. See id. § 7604(a)(2) (authorizing lawsuits against the Administrator of the EPA where the agency has allegedly failed to perform a non-discretionary duty). But in the broader scheme of things, this matter is actually one of many battlegrounds in a multi-front conflict between two competing steel-manufacturing companies with facilities in Mississippi County, Arkansas. Nucor operates two manufacturing facilities near Blytheville, Arkansas, which is approximately twenty miles from a site in Osceola, Arkansas, at which Big River Steel Company (“Big River Steel”) has proposed to build a new manufacturing facility. (See Nucor's Second Suppl. & Am. Compl. (“Compl.”), ECF No. 40, ¶¶ 4-5, 10.)[1] Big River Steel obtained a permit from the Arkansas Department of Environmental Quality (“ADEQ”) that authorized the construction and operation of its planned facility, and Nucor responded by launching legal attacks against the permit, both in the Arkansas state court system and in the U.S. District Court for the Eastern District of Arkansas. See Nucor Steel-Arkansas v. Ark. Pollution Control & Ecology Comm'n (Nucor I), 478 S.W.3d 232 (Ark. 2015); Nucor Steel-Arkansas v. Big River Steel, LLC (Nucor II), 825 F.3d 444 (8th Cir. 2016).[2]

         Significantly for present purposes, Nucor has also sought to challenge Big River Steel's permit by petitioning the EPA to object to the permit under Title V of the CAA, 42 U.S.C. §§ 7661-7661f. Per Title V, the EPA may object to any operating permit that a state permitting authority issues if the permit does not comply with the CAA, id. § 7661d(b)(1), and if EPA fails to object on its own, any person may petition the agency to issue an objection, id. § 7661d(b)(2). When the EPA failed to respond timely to Nucor's petition for an objection to Big River Steel's permit, Nucor filed this lawsuit, seeking a court order that compels the EPA to respond to Nucor's petition. (See Compl., Prayer for Relief, ¶ B.)

         Before this Court at present is the EPA's motion to dismiss Nucor's complaint. (See EPA's Mot. to Dismiss Second Suppl. & Am. Compl. for Lack of Jurisdiction (“Mot.”), ECF No. 43.) In the motion, the agency contests Nucor's various stated bases for Article III standing, only one of which this Court finds worthy of discussion here.[3] Specifically, Nucor's complaint asserts that, by operation of a set of rules within the CAA known as the Prevention of Significant Deterioration (“PSD”) program, the permitted emissions from the new Big River Steel mill will cause a construction project that Nucor has planned to undertake at one of its Arkansas facilities to be subject to more stringent emissions limitations than would have applied to Nucor's project otherwise. (See Compl. ¶¶ 63, 71-81.) The EPA argues that Nucor has not adequately alleged that Big River Steel's permit will cause Nucor imminent injury in this way, because the complaint does not sufficiently assert that Nucor has any imminent construction plans that will require PSD-program review or that such plans would actually be affected by Big River Steel's emissions. (See Mot. at 18-23.)[4]

         For the reasons explained below, this Court agrees with Nucor that certain allegations in the complaint are sufficient to demonstrate (for the purpose of the pleading stage of this litigation) that Big River Steel's permit works a plausible and imminent injury to Nucor in the form of more stringent limitations under the PSD program. (See, e.g., Compl. ¶ 78 (alleging that one of Nucor's facilities “is currently pursuing permit modifications that may require PSD review”); id. ¶ 28 (asserting that Big River Steel's emissions “will impact the overall air quality of Mississippi County, including the air quality in and around Nucor's facilities”).) Consequently, this Court finds that the complaint adequately alleges Nucor's standing to bring the instant lawsuit, which means that the EPA's motion to dismiss for lack of standing must be DENIED. A separate order consistent with this Memorandum Opinion will follow.

         I. BACKGROUND

         This Memorandum Opinion addresses the EPA's contention that Nucor lacks Article III standing because its complaint does not adequately allege that Nucor has imminent construction plans that the emissions from Big River Steel's new facility will affect by operation of the PSD program. Notably, the EPA appears to accept Nucor's suggestion that an injury of the type Nucor alleges can constitute a concrete, particularized injury that would confer Article III standing if an entity that has imminent construction plans demonstrates that it actually would be harmed in this way. In order to evaluate the EPA's assertion that Nucor's complaint fails to make an adequate showing of imminent injury, it is important to understand how the operation of the PSD program could possibly inflict a cognizable injury-in-fact for standing purposes, and achieving that understanding requires background knowledge of the overall CAA scheme and the contours of the PSD program, both of which are sketched out below.

         A. The Clean Air Act Framework

         With the CAA Amendments of 1970, Congress enacted a “comprehensive national program that made the States and the Federal Government partners in the struggle against air pollution.” Gen. Motors Corp. v. United States, 496 U.S. 530, 532 (1990). At the heart of the CAA are the National Ambient Air Quality Standards (“NAAQS”), which are specified numerical thresholds for the concentration of particular pollutants in the outdoor air (also known as the “ambient” air). See 42 U.S.C. § 7409. Because of their role within the overall statutory scheme, the NAAQS are generally considered to be “the engine that drives nearly all of Title I of the CAA.” Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 468 (2001).

         The CAA requires the EPA “to promulgate NAAQS for each air pollutant” about which the agency has made certain findings, id. at 462; see also 42 U.S.C. § 7409(a), and the agency must set these uniform, nationally applicable pollution standards at the levels necessary “to protect the public health, ” 42 U.S.C. § 7409(b)(1), while also providing for “an adequate margin of safety, ” id., and “accurately reflecting] the latest scientific knowledge” about the effects on public health from the presence of each pollutant in the ambient air, id. § 7408(a)(2). To date, the EPA has promulgated NAAQS for six types of air pollutants. Util. Air Regulatory Grp. v. EPA (UARG), 134 S.Ct. 2427, 2435 (2014); see 40 C.F.R. pt. 50. As pertinent here, there are two NAAQS that relate to a pollutant called “particulate matter”: one that applies to PM2.5 and another that applies to PM10. See 40 C.F.R. §§ 50.6 (setting NAAQS for PM10), 50.13, 50.18 (setting NAAQS for PM2.5).[5]

         1. The States' Role In The Regulation Of New And Modified Stationary Sources Under The CAA

         Once the EPA establishes a NAAQS for a particular pollutant, each state assumes the lead role in implementing that air quality standard, with each state adopting (subject to EPA approval) “a plan which provides for implementation, maintenance, and enforcement” of that NAAQS. 42 U.S.C. § 7410(a)(1).[6] Each state's implementation plan (“SIP”) is subject to certain minimum requirements laid out in the CAA, see Id. § 7410(a)(2), but “[i]t is to the States that the CAA assigns initial and primary responsibility for deciding what emissions reductions will be required from which sources” in order to achieve the NAAQS. Am. Trucking Ass'ns, 531 U.S. at 470; see also 42 U.S.C. § 7407(a) (“Each State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such State by submitting [a SIP] which will specify the manner in which [the NAAQS] will be achieved and maintained within each air quality control region in such State.”).

         As a general matter, through its SIP, each state implements a permit program that requires each new and modified major stationary source of pollution to seek a pre-construction permit that sets emissions limitations for that source. See Texas v. EPA, 726 F.3d 180, 183-84 (D.C. Cir. 2013); see also 42 U.S.C. §§ 7410(a)(2)(C). For example, in Arkansas, the ADEQ issues pre-construction permits, Nucor II, 825 F.3d at 447; see Ark. Code §§ 8-4-201, 203, and any entity that plans to build a new major emitting facility, or modify an existing one, must apply to the ADEQ for a permit that, if granted, contains allowable emissions levels pertaining to that source, Nucor II, 825 F.3d at 447.

         Importantly, the particular emissions limitations that apply to a new or modified source depend on where the source is located. The EPA divides the country into “air quality control regions” and classifies each region as being in “attainment, ” or in “non-attainment, ” or treats the region as “unclassifiable, ” with respect to each NAAQS. 42 U.S.C. § 7407(d)(1)(B); see 40 C.F.R. pt. 81, subparts B-C. And these designations dictate which emissions limitations the states must impose in any pre-construction permits that they issue in a particular region. See 42 U.S.C. §§ 7475 (setting permit requirements for sources in “attainment” and “unclassifiable” regions), 7503 (setting permit requirements for sources in “non-attainment” regions).

         In essence, “the [CAA] triggers more or less stringent [emissions] requirements depending on the quality of an area's ambient air.” Catawba Cty, N.C. v. EPA, 571 F.3d 20, 26 (D.C. Cir. 2009). Furthermore, the EPA can change a region's designation “at any time[, ]” based on “any . . . air quality-related considerations the Administrator deems appropriate[.]” 42 U.S.C. § 7407(d)(3)(A).

         2. The PSD Program

         In regions that have been designated “attainment” or “unclassifiable, ” the CAA requires states to implement the statute's Prevention of Significant Deterioration (“PSD”) program. See Id. § 7471. The PSD program is so named because, in attainment and unclassifiable regions, the pre-construction permits that states issue have to impose the emissions limitations that are “necessary . . . to prevent significant deterioration of air quality, ” 42 U.S.C. § 7471 (emphasis added); hence, the pre-construction permits that the states issue in those regions are known as “PSD permits, ” Alaska Dep 't of Envtl. Conservation v. EPA, 540 U.S. 461, 470, 472 (2004). When a major new or modified emitting facility seeks a PSD permit, it is required to certify that it will comply with a number of requirements. See 42 U.S.C. § 7475. One such requirement is that the new or modified facility must employ the best available control technology (“BACT”) for each pollutant subject to the PSD program. Id. § 7475(a)(4). Another is that the facility must “demonstrate[]” that its emissions “will not cause, or contribute to, air pollution in excess of any . . . [NAAQS] in any air quality control region[.]” Id. § 7475(a)(3).

         In addition, and importantly for this case, the applicant must also “demonstrate[]” that its emissions “will not cause, or contribute to, air pollution in excess of any . . . maximum allowable increase or maximum allowable concentration for any pollutant in any area [subject to the PSD program] more than one time per year[.]” Id. With respect to this last requirement, the “maximum allowable increase” for a particular pollutant is known as the PSD “increment.” Alaska Dep't of Envtl. Conservation, 540 U.S. at 473; see also 42 U.S.C. § 7473 (setting “increments” for specific pollutants).

         The PSD increment is a number that is expressed as an ambient concentration of a given pollutant in micrograms per meter cubed (µg/m3), and it reflects “the maximum allowable increase in concentration[ of a pollutant] . . . over the baseline concentration.” 42 U.S.C. § 7473(b)(2); see also 40 C.F.R. § 52.21(c) (setting PSD increments). The EPA establishes the “baseline concentration” for a given pollutant, and the baseline, which varies from region to region, is generally equal to the concentration of the pollutant that was present in the ambient air at the time the first application for a PSD permit in a particular region was submitted. See 42 U.S.C. § 7479(4); see also 40 C.F.R. § 52.21(b)(13)-(15). The PSD increment-which, as explained, is the maximum allowable increase above the baseline-is a single number that the EPA fixes for each pollutant, and it applies to all regions that have been designated as “attainment” or “unclassifiable” with respect to that pollutant; for example, in the case of PM2.5 and PM10, the established PSD increments are 4 and 17 µg/m3, respectively. See 40 C.F.R. § 52.21(c).[7] What this means, as a general and practical matter, is that all new or modified stationary sources of pollution in attainment and unclassifiable areas must be mindful not to construct facilities whose emissions of a pollutant would cause the region to exceed the PSD increment for that pollutant.

         The method by which a new or modified facility must demonstrate that it will not “cause or contribute to” air pollution in excess of the PSD increment, 42 U.S.C. § 7475(a)(3), is critical to Nucor's PSD-related theory of injury in this case. In brief, each PSD-permit applicant must begin by conducting an air quality impact analysis that identifies the area in which the proposed new or modified facility will have a significant impact on air quality. See 42 U.S.C. § 7475(a)(6); 40 C.F.R. § 52.21(m); see also Environmental Protection Agency, New Source Review Workshop Manual C.26-31 (Draft, Oct. 1990) (hereinafter “NSRWM”). This “impact area” is “a circular area” that is centered on the proposed facility and has a radius that extends out either 50 kilometers or to the most distant point where air modeling suggests that a significant impact will occur, whichever is less. See NSRWM at C.26. Next, the PSD permit applicant must develop an inventory of “all increment-affecting sources located in the impact area” as well as “all increment-affecting sources located within 50 kilometers of the impact area . . . if they, either individually or collectively, affect the amount of PSD increment consumed.” Id. at C.35. Sources are “increment-affecting” (and thus must be included in the inventory) if they have caused a change in emissions subsequent to the setting of the baseline concentration. See id.

         Finally, after assembling this inventory of nearby sources that already affect the PSD increment, the permit applicant must demonstrate that its proposed facility, in conjunction with the pre-existing facilities, will not cause the PSD increment to be exceeded. See 40 C.F.R. § 52.21(k)(ii); see also Id. § 52.21(b)(13)(ii)(a) (explaining that emissions from other sources constructed after the baseline concentration has been set “affect the applicable maximum allowable increase[]” that a new facility must take into account when applying for a PSD permit). Put another way, once the baseline concentration of a given pollutant has been set in a particular region, any facility constructed thereafter that increases the ambient concentration of that pollutant “consumes” a portion of the PSD increment, leaving less of the increment available for subsequent new facilities in the region to use. NSRWM at C.10.

         B. Underlying Facts And Procedural History

         Big River Steel is currently constructing a steel mill near the town of Osceola in Mississippi County, Arkansas. (Compl. ¶¶ 1, 9.) Mississippi County is part of the Northeast Arkansas Intrastate Air Quality Control Region, see 40 C.F.R. § 81.139, which the EPA has classified as “attainment” or “unclassifiable” with respect to PM2.5 and PM10, see Id. § 81.304, and thus the area is subject to the PSD program, see 42 U.S.C. § 7471.

         In January of 2013, Big River Steel applied to ADEQ for a pre-construction PSD permit related its new mill, and it did so at the same time that it sought an operating permit under Title V of the CAA with respect to the proposed new facility. See Nucor I, 478 S.W.3d at 237-38 & n.1. The basic requirements for seeking and receiving a PSD permit are described above, see supra, Part I.A.2, while the purpose and procedures for operating permits under Title V-which is the vehicle pursuant to which the instant case is brought-are as follows.

         1. The Title V Permitting Process

         Title V of the CAA mandates that each major stationary source obtain a facility-wide operating permit that lays out all federally enforceable emissions limitations applicable to that facility. See Sierra Club v. EPA, 551 F.3d 1019, 1022 (D.C. Cir. 2008); 42 U.S.C. §§ 7661-7661f. Title V “is designed to facilitate compliance and enforcement by consolidating into a single document all of a facility's obligations under the Act.” UARG, 134 S.Ct. at 2436. Title V operating permits are distinct from PSD permits, see Id. at 2435-36, but PSD-permit requirements are among the obligations that must be included in a Title V permit, see 40 C.F.R. § 70.2 (defining “applicable requirement” for the purposes of Title V to include “[a]ny term or condition of any preconstruction permits” issued under the PSD program). The EPA allows states to consolidate their PSD and Title V permits, see EPA, Operating Permit Program, 57 Fed. Reg. 32, 250, 32, 259 (July 21, 1992), and Arkansas has done so, see Nucor II, 825 F.3d at 453; Nucor I, 478 S.W.3d at 238 n.1. Moreover, having a Title V permit shields a facility from the charge of operating in violation of the CAA, because once a facility obtains a Title V permit, Title V's “permit shield” provision dictates that “compliance with the permit shall be deemed compliance with” the statute. 42 U.S.C. § 7661c(f); see also Sierra Club, 551 F.3d at 1022.

         Significantly for present purposes, Title V establishes that a state permitting authority must subject each Title V permit application to public comment and judicial review by the state's courts, 42 U.S.C. § 7661a(b)(6), and it must also transmit all proposed Title V permits to the EPA for review, id. § 7661d(a)(1). If, upon review of a Title V application, the EPA determines that the proposed Title V permit would violate the CAA in any respect, it “shall . . . object to its issuance” and “provide a statement of reasons for the objection” to the state permitting authority and to the permit applicant. Id. § 7661d(b)(1). If the state permitting authority receives an EPA objection, it may respond by submitting a revised permit to the EPA, but it must refrain from issuing the permit. 42 U.S.C. § 7661d(b)(3). And once it has objected, the EPA makes the final decision whether to deny the permit or issue it with revisions, id. § 7661d(c); consequently, an objection from the EPA is effectively a “veto[.]” Operating Permit Program, 57 Fed. Reg. at 32, 256.

         However, if the EPA does not object within forty-five days of receiving a proposed Title V permit, “any person” may petition the EPA to object on any ground that was raised during the state permitting authority's public comment period. 42 U.S.C. § 7661d(b)(2). The EPA must grant or deny any such petition for an objection within sixty days of receiving it, and “shall issue an objection [i.e. grant the petition] within such period if the petitioner demonstrates . . . that the permit is not in compliance” with the CAA. Id.[8] The EPA's denial of a petition for an objection is subject to judicial review in the appropriate Court of Appeals. Id.; see also Id. § 7607(b)(1).[9] In addition, if the EPA fails to take any action on the petition, the CAA's citizen-suit provision supplies a ...

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