ELR Citation: ELR 21497
No(s). 93-3538 (7th Cir. Sep 1, 1994)

The court holds that a district court properly dismissed acivil penalty action the U.S. Environmental Protection Agency (EPA) brought under §113(b)(5) of the pre-1990 version of the Clean Air Act (CAA) against a manufacturer that, after modifying its production process, allegedly emitted volatile organic compounds (VOCs) in amounts that violated Indiana's state implementation plan (SIP). The manufacturer modified its plant to produce an increased number of Hummers, successor to the army jeep, which requires protective paint that emits VOC's that lead to the creation of ground level ozone. Having already authorized the manufacturer to alter its plant and to increase production if and when the SIP for ozone was approved, the local health department rejected EPA's recommendation that it deny the manufacturer a permit to emit the increased level of VOCs. Four months after the SIP for ozone and the permit became effective, EPA issued a finding of violation to the manufacturer, the state, and the county, and one year later brought this action under §113(b)(5). Section 113(b)(5) authorizes suit whenever a person attempts to modify a stationary source with respect to which EPA has already made a finding of violation. It is undisputed that the change in the plant's operation is a modification within the meaning of the CAA. The court first holds that EPA's finding of violation was made after the manufacturer modified its plant, and that §113(b)(5) authorizes suit only where an attempt is made to modify a major source after a finding of violation has already been made. In this case, a valid state permit authorized the changes before EPA challenged the permit's validity. The court rejects EPA's argument that it had no alternative to bringing suit under §113(b)(5) until the 1990 amendments were enacted, because those amendments are inapplicable to this case, the suit is more likely authorized by §113(b)(2), and EPA could have appealed the county's grant of the permit to the appropriate state authority. The court holds that it would be a harsh remedy to interpret §113(b)(5) to allow EPA, in the absence of express or implied congressional intent, to attack collaterally a permit through a civil penalty action five years after the permit had been granted and the modification implemented, by which time defendant's accrued liability would exceed $40 million, even though it had been operating under a valid permit never before challenged.

Counsel for Plaintiff
Peter Appel
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Bryan G. Tabler
Barnes & Thornburg
1313 Merchants Bank Bldg.
11 S. Meridian St., Indianapolis IN 46204
(317) 638-1313

Before POSNER, Chief Judge, and EASTERBROOK and ROVNER, Circuit Judges.