The End of the EPA New Source Review Enforcement Initiative?

Sometimes the light at the end of the tunnel is the end of the tunnel. Yesterday, the U.S. District Court for the Eastern District of Pennsylvania granted summary judgment to Metropolitan Edison Company (“MetEd”) (represented by Akin Gump in this suit), in a Clean Air Act (CAA) citizen suit brought by the states of New Jersey and Connecticut. New Jersey v. RRI Mid-Atlantic Energy Holdings, LLC. et al., No. 07-cv-05298 (E.D. Pa. March 28, 2013) (“RRI Mid-Atlantic”). For over a decade, the Environmental Protection Agency (EPA), Northeastern states and environmental groups have waged a campaign to impose new interpretations of the CAA on coal-fired power plants for activities occurring as long as 30 years ago against parties like MetEd that have not owned or operated the plant for years. The decision in RRI Mid-Atlantic held that the federal statute of limitations barred claims against parties like MetEd.

The RRI Mid-Atlantic court applied the recent Supreme Court of the United States decision in Gabelli v. SEC (568 U.S. __, 133 S.Ct. 1216, __ L.Ed.2d __ (2013)) to bar citizen suits under the CAA for claims arising out of power plant construction projects that occurred more than five years before the complaint was filed. In Gabelli, the Supreme Court held that that “discovery rule” (under which the statute of limitations for bringing an action does not accrue until the underlying harm is discovered) does not apply to the general five-year federal statute of limitations, 24 U.S.C. § 2462. While Gabelli arose in the context of a civil enforcement action brought by the Security and Exchange Commission (SEC), the RRI Mid-Atlantic decision demonstrates the breadth of Gabelli.

The RRI Mid-Atlantic court ruled that Gabelli bars not only enforcement actions commenced by federal agencies, but also CAA citizen suits for alleged violations of the Prevention of Significant Deterioration (PSD) permitting program. The court reasoned that to hold otherwise “would make little sense,” both because it “would create an untenable scenario in which the statute of limitations would bar the government’s claim under the Clean Air Act, but the government could intervene in a citizen suit deemed timely based on the discovery rule” and because citizens “stand in the shoes” of the federal government. Slip op. at 30-31.

RRI Mid-Atlantic demonstrates the broad ramifications that Gabelli may have on all actions to which the general federal statute of limitations period applies, particularly in the context of citizen suit environmental enforcement actions. Moreover, RRI Mid-Atlantic went beyond Gabelli, holding that the doctrine of equitable tolling did not apply to salvage the claims by New Jersey and Connecticut. In rejecting the states’ arguments, the court ruled that they had presented no facts that MetEd had actively misled them and that, to support equitable tolling, they had to show that MetEd “took steps beyond the challenged conduct itself to conceal that conduct.” The states failed to make that showing and the court entered judgment for MetEd on all claims.

Contact Information

If you have any questions regarding this alert, please contact:

Paul E. Gutermann
pgutermann@akingump.com
202.887.4088
Washington, D.C.
David H. Quigley
dquigley@akingump.com
202.887.4339
Washington, D.C.