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Sixth Circuit Affirms EPA's Denial of Sierra Club Petition

On February 26, 2009, the Sixth Circuit Court of Appeals affirmed the United States Environmental Protection Agency’s (EPA) decision to deny Sierra Club’s petition to object to a Title V air permit issued by the Kentucky Division for Air Quality (DAQ) to East Kentucky Power Cooperative (EKPC) for its Hugh L. Spurlock Generating Station.  Sierra Club v. U.S. EPA,  No. 07-4485 (6th Cir.,  February 26, 2009). 

The case arose out of the renewal of EKPC’s Title V permit for its Spurlock operation, which was issued by DAQ on July 31, 2006.  Because EPA did not object to the draft permit during its 45-day exclusive-review window, Sierra Club petitioned EPA to object to the permit arguing that it was defective because it failed to address Prevention of Significant Deterioration (PSD) requirements.  In support of its petition, Sierra Club relied solely on the fact that EPA had previously issued a Notice of Violation (NOV) and had filed a civil enforcement action based on the same allegations of PSD noncompliance.  EKPC and EPA then reached a settlement in the enforcement lawsuit and entered into a consent decree, which contained no admission of liability on the part of EKPC.  Subsequently, EPA denied Sierra Club’s petition for review explaining that the issuance of an NOV and the filing of an enforcement action constituted “initial steps” in the enforcement process and did not reflect EPA’s final position as to whether the Title V permit was required to contain a PSD compliance schedule

Sierra Club then appealed EPA’s decision not to object to the permit to the Sixth Circuit for review.  Although the Sixth Circuit found that Section 505(b)(2) of the Clean Air Act imposes a mandatory duty on EPA to object to a permit if any person “demonstrates” to EPA that “the permit is not in compliance” with the requirements of the Clean Air Act, the court found that the prior issuance of an NOV and the filing of an enforcement action do not constitute a “demonstration” that “the permit is not in compliance” with the Clean Air Act.  In reaching its decision, the court deferred to EPA’s reasonable construction of Section 505(b)(2).  The court noted that an initial finding of noncompliance triggering an NOV is “only the beginning of a process designed to test the accuracy of the agency’s initial conclusions.”

If you have questions regarding environmental law issues, please contact a member of Greenebaum’s Environmental and Natural Resources Team.

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