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Court Rejects EPA Affirmative Defense for Malfunctions in Private Citizen Suits


On April 18, 2014, the United States Court of Appeals for the D.C. Circuit invalidated an affirmative defense provided in EPA’s 2013 National Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry. The affirmative defense provided in the rule would have been available in private citizen suits seeking to enforce compliance where an unavoidable malfunction had resulted in impermissible emissions from a facility. The court differentiated between EPA’s authority to determine whether penalties should be assessed in an administrative action and its authority to determine whether penalties should be assessed in a citizen suit action.

The court acknowledged that EPA has the authority to compromise, modify, or remit, with or without conditions, administrative penalties, but found that under the statutory scheme, in a citizen suit action the authority to limit civil penalties rests solely with the court and not with EPA in its regulatory function. EPA had argued that an affirmative defense was necessary to account for the tension between requirements that emissions limitations be “continuous” and the practical reality that control technology can fail unavoidably. However, the court responded that such arguments could be made in a judicial action to be determined by the court but that EPA does not have the authority to regulatorily create an affirmative defense in private actions

Environmental groups have responded to the court’s decision by requesting removal of affirmative defense provisions in various rules. On June 17, 2014, the Sierra Club filed a lawsuit in the United States Court of Appeals for the D.C. Circuit requesting review of nine different EPA rules promulgated in 2011 and 2012 which contain an affirmative defense against civil penalties where a malfunction occurs. On the same day, Sierra Club filed a petition with EPA requesting revision of regulations promulgated with affirmative defense provisions. The list of rules covered by the petition includes new source performance standards for electric utility steam generating units, commercial and industrial solid waste incineration units and sewage sludge incineration units. The petition also covers various national emissions standards for hazardous air pollutants including, among others, those relating to Group 1 polymers and resins, chemical manufacturing area sources, printing and publishing, natural gas transmission and storage facilities, industrial, commercial and institutional boilers and process heaters and coal and oil-fired electric utility steam generating units.

Although the D.C. Circuit Court specifically noted that it did not confront the question of whether an affirmative defense is appropriate in a state implementation plan for other regulations, the decision is having an impact on EPA’s consideration of 36 state implementation plans (SIPs), including Indiana and Kentucky, which contain exemptions for startup, shutdown and malfunction events. In response to environmental group legal action requesting that EPA remove such provisions, on Feb. 22, 2013, EPA proposed a rule that would find those SIPs deficient and require changes to the startup, shutdown and malfunction provisions that were in line with EPA’s affirmative defense provisions in other rules.  In light of the April court decision, EPA and the petitioner environmental groups have agreed to delay final action on those state implementation plans until May 2015.

A revised proposed rule is currently under review at the White House Office of Management and Budget, the last EPA internal review process before publication.

To view a complete PDF of the Second Quarter 2014 Air Quality Letter, please click here.

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