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April 28, 2003


The opinion of the court was delivered by: William M. Skretny, United States District Judge


Plaintiffs State of New York and Erin M. Crotty ("the State") bring this action as parens patriae pursuant to the citizen suit provisions of the Clean Air Act, 42 U.S.C. § 7604(a) and 7477, seeking redress for alleged violations of the federal Clean Air Act and related state environmental conservation laws by Defendants Niagara Mohawk Power Corp. ("Niagara Mohawk") and nine other defendants*fn2 (the "NRG Defendants").

Presently before this Court are two separate Motions to Dismiss the State's Amended Complaint:*fn3 one filed by Niagara Mohawk, the other filed jointly by the NRG Defendants.*fn4 This Court heard oral argument on both motions on July 16, 2002, and took the matters under advisement at that time. For the reasons stated below, this Court will grant in part and deny in part Niagara Mohawk's Motion to Dismiss, and grant the NRG Defendants' Motion to Dismiss in its entirety.


A. Regulatory Background: The Clean Air Act

The Clean Air Act, 42 U.S.C. § 7401 et seq., was originally enacted in 1955. Congress has since enacted significant amendments to the Act, most notably in 1970, 1977 and 1990. The federal regulations implementing the Clean Air Act are codified at 40 C.F.R. § 50 et seq. Though somewhat of a work in progress, the objective of the Clean Air Act has remained constant: for the federal government to work with the states to promote the public health and welfare by protecting and enhancing the quality of the nation's air, and to encourage and assist in the development and operation of regional air pollution prevention and control programs. 42 U.S.C. § 7401(b)(1) and (4).

While the Clean Air Act is a piece of federal legislation, the Act itself recognizes that air pollution prevention and control measures must be directed at the source of the pollution. 42 U.S.C. § 7401(a)(3). Primary responsibility for implementation of the Act therefore falls on state and local governments. Id. Accordingly, the interplay and cooperation of the federal and state governments is crucial to meet the objectives of the Clean Air Act. See, e.g., 42 U.S.C. § 7402.

Under the Act, the United States Environmental Protection Agency is charged with establishing primary and secondary national ambient air quality standards for particular air pollutants.*fn5 See 42 U.S.C. § 7408, 7409. Each state must submit a "state implementation plan" ("SIP") providing for the implementation, maintenance, and enforcement of these primary and secondary national ambient air quality standards. 42 U.S.C. § 7410. New York has complied with this requirement. See 6 N.Y.C.R.R. §§ 200-317.

The Act also provides for "new source review," which is intended to control emissions from new and modified stationary sources.*fn6 For "nonattainment areas,"*fn7 the plan requirements codified at 42 U.S.C. § 7501-7515 govern; for "attainment areas,"*fn8 the provisions for the prevention of significant deterioration of air quality ("PSD") codified at 42 U.S.C. § 7470-7492 control.

At issue here are the PSD provisions. These provisions were enacted in 1977 to ensure that attainment areas continue to maintain the national air quality standards. United States v. Illinois Power Co., No. 99-CV-833-MJR, 2003 WL 367214, at *2, (S.D.Ill. Feb. 19, 2003); LaFleur v. Whitman, 300 F.3d 256, 260-61 (2d Cir. 2002). The express purpose of these provisions, inter alia, is to protect public health and welfare from any adverse effects from air pollution and to ensure economic growth while preserving clean air resources. 42 U.S.C. § 7470(1) and (3).

Under 42 U.S.C. § 7475(a), no major emitting facilities*fn9 on which construction*fn10 is commenced after August 7, 1977, may be constructed unless the preconstruction requirements of 42 U.S.C. § 7475 have been satisfied. Those requirements include, among others, that a preconstruction permit setting forth emissions limitations for the proposed facility be obtained, that the proposed facility be subject to the best available control technology*fn11 ("BACT") for each pollutant subject to regulation, that there be an analysis of any air quality impacts projected due to the growth of the proposed facility, and that the person who owns or operates the proposed facility agree to conduct such monitoring as may be necessary to determine the effect of any emissions. See 42 U.S.C. § 7475(a)(1), (4), (6) and (7).

B. The State's Amended Complaint

At this stage, this Court assumes the truth of the factual assertions contained in the State's Amended Complaint. See Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 740, 96 S.Ct. 1848, 1850, 48 L.Ed.2d 338 (1976); see also Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton Coll., 128 F.3d 59, 63 (2d Cir. 1997).

1. Niagara Mohawk

The State alleges that Niagara Mohawk constructed or modified two major emitting facilities — the Dunkirk and Huntley power plants (the "Facilities") — without securing the proper preconstruction permits and implementing the proper pollution emissions controls required by federal and state law. (Amended Complaint, ¶¶ 1, 2.) The Dunkirk facility is located in Dunkirk, New York; the Huntley facility is located in Tonawanda, New York. (Amended Complaint, ¶¶ 2, 18, 19.)

Beginning in the early 1980s, Niagara Mohawk instituted a program to extend the operational lives of its aging power-generating boiler units at the Facilities. (Amended Complaint, ¶ 63.) Each of the ten boiler units in question were nearing their anticipated retirement dates.*fn12 (Amended Complaint, ¶¶ 48, 49, 56, 57, 58.) Extending the operational lives of these units would allow Niagara Mohawk to recoup lost generating capacity and decrease the occurrences of forced outages. (Amended Complaint, ¶¶ 63, 70.)

In 1985, Niagara Mohawk developed a two-phase approach for examining the boiler units at the Facilities. (Amended Complaint, ¶ 67.) The first phase consisted of inspecting high energy components such as turbine generators, steam and mud drums, economizer inlet headers and piping subject to creeping. (Amended Complaint, ¶ 67.) The second phase involved inspecting boilers, major equipment and piping susceptible to corrosion, electrical, instrumentation and control items. (Amended Complaint, ¶ 67.)

In 1987, Niagara Mohawk organized a life extension project team to coordinate life extension modifications at the Facilities. (Amended Complaint, ¶ 69.) Niagara Mohawk determined that extending the operational lives of the Facilities would cost approximately nine times less than building three new coal-fired units. (Amended Complaint, ¶ 69.) It therefore continued modifying the Facilities as part of its life extension program. (Amended Complaint, ¶ 70.)

Between 1982 and 1999, each of the boiler units at the Facilities underwent modification upgrades. (Amended Complaint, ¶¶ 71-75 (Unit 1), 101-108 (Unit 2), 134-142 (Unit 3), 168-173 (Unit 4), 64,199-204 (Unit 63), 231-236 (Unit 64), 262-266 (Unit 65), 292-295 (Unit 66), 321-326 (Unit 67), 352-361 (Unit 68).) Each of these modifications constituted a "major modification" or "construction of a major emitting facility" requiring the issuance of a preconstruction permit prior to commencement of construction. (Amended Complaint, ¶¶ 77,110, 144, 175, 206, 238, 268, 297, 328, 363.) Niagara Mohawk never applied for or obtained the appropriate permits for any of these modifications. (Amended Complaint, ¶¶ 78, 111, 145, 176, 207, 239, 269, 298, 329, 364.) Nor did Niagara Mohawk implement BACT for the emissions of nitrogen oxides and sulfur dioxide from the Facilities. (Amended Complaint, ¶¶ 87, 119, 154, 185, 216, 248, 278, 307, 338, 373.)

Niagara Mohawk owned and operated the Facilities until June 11, 1999, at which time it transferred ownership to the NRG Defendants. (Amended Complaint, ¶¶ 2, 13.)

2. NRG Defendants

Defendant NRG Energy, Inc., currently owns and operates the Dunkirk facility through its subsidiaries Defendants NRG Eastern, LLC, NRG Northeast Generating, LLC, NRG Operating Services, Inc., Dunkirk Power, LLC and NRG Dunkirk Operations, Inc. (Amended Complaint, ¶ 2.) Defendant NRG Energy, Inc. also currently owns and operates the Huntley facility through its subsidiaries NRG Eastern, LLC, NRG Northeast Generating, LLC, NRG Operating Services, Inc., Huntley Power, LLC and NRG Huntley Operations, Inc. (Amended Complaint, ¶ 2.)

Although the State has generally lumped Niagara Mohawk and the NRG Defendants together in its Amended Complaint, it is clear from oral argument that the State does not assert that the NRG Defendants actually made any modifications to the Facilities. Rather, the State alleges that the NRG Defendants are liable for continuing to operate the Facilities without preconstruction permits and without implementation of BACT.


A court may dismiss an action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure only if "`it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which will entitle him to relief.'" Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)); Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). All well-pleaded allegations are accepted as true and construed in the non-movant's favor. Christopher v. Harbury, 536 U.S. 403, ___, 122 S.Ct. 2179, 2182, 153 L.Ed.2d 416 (2002). If it appears from the face of the Complaint that a cause of action has not been brought within the applicable statute of limitations period, the defense of limitations "may be raised in a pre-answer motion pursuant to Fed.R.Civ.P. 12(b)(6)." Santos v. Dist. Council of New York City, 619 F.2d 963, 967 n. 4 (2d Cir. 1980); Ghartley v. St. John's Queens Hosp., 869 F.2d 160, 162 (2d Cir. 1989).

A. Niagara Mohawk's Motion to Dismiss

At the outset, it is important to note that the Clean Air Act contains separate programs and provisions for construction permits and operation permits. Compare 42 U.S.C. § 7475, with 42 U.S.C. § 7661 et seq.; see Illinois Power, 2003 WL 367214, at *5 (recognizing the importance of the Act's separate requirements for preconstruction permits and operating permits). In the context of the present motions, the distinction is critical. Cf. United States v. Southern Indiana Gas and Elec. Co., No. IP 99-1692-C-M/F, 2002 WL 1760752, at *4 (S.D.Ind. July 26, 2002) (noting that distinction between the two types of permits is "crucial"). Here, the State has elected to civilly prosecute this case under the Clean Air Act's construction permit requirements, rather than under the Act's operation permit requirements. Among other allegations, the State alleges that Niagara Mohawk completed major modifications at the Facilities without securing the proper preconstruction permits. While the State contends that "[preconstruction] permits are primarily operating permits" (see State's Memorandum in Opposition, at 7), the language and structure of the Act reveals otherwise.

The pertinent provisions of the Clean Air Act's preconstruction requirements provide:

(a) Major emitting facilities on which construction is commenced
No major emitting facility on which construction is commenced after August 7, 1977, may be constructed in any area to which this part applies unless —
(1) a permit has been issued for such proposed facility in accordance with this part setting forth emission limitations for such facility which conform to the requirements of this part;
(2) the proposed permit has been subject to a review in accordance with this section, the required analysis has been conducted in accordance with regulations promulgated by the Administrator, and a public hearing has been held with opportunity for interested persons including representatives of the Administrator to appear and submit written or oral presentations on the air quality impact of such source, alternatives thereto, control technology requirements, and other appropriate considerations;
(3) the owner or operator of such facility demonstrates, as required pursuant to section 7410(j) of this title, that emissions from construction or operation of such facility will not cause, or contribute to, air pollution in excess of any (A) maximum allowable increase or maximum allowable concentration for any pollutant in any area to which this part applies more than one time per year, (B) national ambient air quality standard in any air quality control region, or (C) any other applicable emission standard or standard of performance under this chapter;
(4) the proposed facility is subject to the best available control technology for each pollutant subject to regulation under this chapter emitted from, or which results from, such facility
(5) the provisions of subsection (d) of this section with respect to protection of class I areas have been complied with for such facility;
(6) there has been an analysis of any air quality impacts projected for the area as a result of growth associated with such facility;
(7) the person who owns or operates, or proposes to own or operate, a major emitting facility for which a permit is required under this part agrees to conduct such monitoring as may be necessary to determine the effect which emissions from any such facility may have, or is having, on air quality in any area which may be affected by emissions from such source; and
(8) in the case of a source which proposes to construct in a class III area, emissions from which would cause or contribute to exceeding the maximum allowable increments applicable in a class II area and where no standard under section 7411 of this title has been promulgated subsequent to August 7, 1977, for such source category, the Administrator has approved the determination of best available technology as set forth in the permit.
42 U.S.C. § 7475(a).

By its plain terms, this section governs the conditions under which a major emitting facility "may be constructed." 42 U.S.C. § 7475(a). Thus, these requirements must be fulfilled prior to construction. The companion federal regulation, 40 C.F.R. § 52.21, also supports the conclusion that this section applies at the preconstruction or construction phase:

(2) Applicability procedures.

(i) The requirements of this section apply to the construction of any new major stationary source . . . or any project at an existing major stationary source in an area designated as attainment or unclassifiable under section 107(d)(1)(A)(ii) and
(iii) of the Act.
(ii) The requirements of paragraphs (j) through (r) of this section apply to the construction of any new major stationary source or the major modification of any existing major stationary source, except as this section otherwise provides.
(iii) No new major stationary source or major modification to which the requirements of paragraphs (j) through (r)(5) of this section apply shall begin actual construction without a permit that states that the major stationary source or major modification will meet those requirements. The Administrator has authority to issue any such permit.
40 C.F.R. § 52.21(a)(2)(i)-(iii) (emphasis added).

In stark contrast, the operation permit provisions provide, inter alia, that:

[I]t shall be unlawful for any person to violate any requirement of a permit issued under this subchapter, or to operate . . . a major source . . . except in compliance with a permit issued by a permitting authority under this subchapter.
42 U.S.C. § 7661a (emphasis added). The goal of the operating permit program is to collect all of the "applicable requirements" under the Clean Air Act that govern the operation of a "major source" into a single operating permit, and to provide for monitoring and other methods of determining compliance with those requirements. 42 U.S.C. § 7661c(a), (b). The operating permits must include limitations on emissions and other conditions necessary to ensure compliance with the provisions of the Clean Air Act, including the PSD program. LaFleur, 300 F.3d at 262 (citing 42 U.S.C. § 7661a(a), 7661c(a); 40 C.F.R. § 70.1(b), 70.2).

Even in the operating permit provisions, it is parenthetically recognized that preconstruction permits under § 7475 are distinct, and must be obtained prior to construction. See 42 U.S.C. § 7661a (noting that "(Nothing in this subsection shall be construed to alter the applicable requirements of this chapter that a permit be obtained before construction or modification.")).

1. Preconstruction Permit Violations: 42 U.S.C. § 7475(a)(1)

a. Citizen Suit Provisions of the Clean Air Act

Niagara Mohawk first moves for dismissal of the State's claims for violations of the preconstruction permit requirements on the ground that the Act's citizen suit provisions do not authorize such claims. The State brings this action pursuant to the citizen suit provisions of the Clean Air Act, 42 U.S.C. § 7604(a) and 7477. (Amended Complaint, ¶¶ 1, 9).

The applicable provisions of 42 U.S.C. § 7604(a) provide as follows:
Except as provided in subsection (b) of this section, any person*fn13 may commence a civil action on his own behalf —
(1) against any person . . . who is alleged to have violated (if there is evidence that the alleged violation has been repeated) or to be in violation of (A) an emission standard or limitation under this chapter or (B) an order issued by the Administrator or a State with respect to such a standard or limitation,
(3) against any person who proposes to construct or constructs any new or modified major emitting facility without a permit required under part C of subchapter I of this chapter (relating to significant deterioration of air quality) or part D of subchapter 1 of this chapter (relating to nonattainment) or who is alleged to have violated (if there is evidence that the alleged violation has been repeated) or to be in violation of any condition of such permit.
42 U.S.C. § 7604(a)(1) and (3).

Niagara Mohawk asserts that the State's causes of action alleging that it failed to obtain preconstruction permits in violation of 42 U.S.C. § 7475(a)(1) must be dismissed because the citizen suit provisions of the Clean Air Act do not authorize suits for wholly past violations of the preconstruction permit requirement. This Court disagrees, and finds that the State's action fits squarely within the citizen suit provisions of 42 U.S.C. § 7604(a)(3).

The starting point for this Court's analysis is the plain language of the statute itself. See Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 409, 113 S.Ct. 2151, 2157, 124 L.Ed.2d 368 (1993); United States v. Nelson, 277 F.3d 164, 193 (2d Cir. 2002). In reviewing the language of 42 U.S.C. ยง 7604(a)(3), this Court must "determine whether the language at issue has a plain and unambiguous meaning." Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 846, 136 L.Ed.2d 808 (1997). If it does, this Court's analysis ends, ...

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