United States v. General Motors Corp.

No. 87-1890 (W.D. La. February 2, 1989)

The court holds that a state implementation plan (SIP) under the Clean Air Act is not as a matter of law superseded by a site-specific permit issued by the state, and SIP compliance is still required. The court first observes that the SIP provides that approval of a particular project does not relieve the project from complying with the SIP. There is a substantial issue of fact whether the SIP requirements and the permit requirements are equivalent, making summary judgment inappropriate. Moreover, the permit was issued before the SIP had a provision dealing with the same topic, and the permitted project is the only site in the state to which this part of the SIP might apply; if the SIP were superceded by the permit, its issuance would have been superfluous. Although the SIP includes a provision authorizing the state to extend a compliance date, the parties have not argued that the permit is an implementation of this section.

Counsel for Plaintiff
John R. Haliburton, Ass't U.S. Attorney
3812 Federal Bldg., 500 Fannin St., Shreveport LA 71101-3088
(318) 226-5288

Counsel for Defendant
Gerald R. Harper
1700 Commercial National Tower, 33 Texas St., Shreveport LA 71101-3621
(318) 221-6277

[19 ELR 21310]

Stagg, J.:

Memorandum Ruling

The instant action was instituted against General Motors Corporation (hereinafter, "GM") at the request of the United States Environmental Protection Agency (hereinafter "EPA"). The complaint alleges violations of the Clean Air Act, 42 U.S.C. § 7401 et seq. and the Louisiana State Implementation Plan. Presently before the court is GM's motion for partial summary judgment and the United States' cross-motion for summary judgment.

Regulatory Background

In 1970, Congress substantially revised the nation's regulatory efforts to control air pollution, establishing an aggressive federal-state statutory scheme to protect the public health and welfare from the adverse effects of air pollution. See, generally, Clean Air Act Amendments of 1970, Pub. L. 91-604, 84 Stat. 1676 (1970). Under the Clean Air Act, the EPA establishes National Ambient Air Quality Standards (hereinafter, "NAAQS") for pollutants which cause or contribute to air pollution and may reasonably be anticipated to endanger public health or welfare. The relevant NAAQS in this case is for photochemical occidents, also known as ozone. In order to attain the ozone NAAQS, the states regulate emissions of volatile organic compounds (hereinafter, "VOCs"), an air pollutant that contributes to ozone formation.

In the Clean Air Act, Congress delegated primary authority to the states to regulate emissions of air contaminants. 42 U.S.C. § 7407(a) provides: "Each state shall have the primary responsibility for assuring air quality within the entire geographic area comprising such state by submitting an implementation plan for such state. . . ." Indeed, the United States Court of Appeal for the Fifth Circuit has recognized that the Clean Air Act allocates primary responsibility for the terms of air quality attainment and maintenance to the states. Florida Power & Light Company v. Costle, 650 F.2d 579, 582 [11 ELR 20836] (5th Cir. 1981). Pursuant to this authority, each state is required to develop and submit to the EPA for approval, a proposed State Implementation Plan (hereinafter, "SIP") designed to achieve and maintain federal standards. 42 U.S.C. § 7410. The EPA must then approve any SIP which meets the statutory requirements. As noted by the Fifth Circuit, "[t]he great flexibility accorded the states under the Clean Air Act is further illustrated by the sharply contrasting, narrow role to be played by EPA." Costle, supra, at 587. Thus, the EPA reviews a state's SIP for the limited purpose of insuring that it contains proper permitting procedures and is designed to attain the NAAQS. Once EPA approves a SIP, the state has primary authority for administering the SIP. The United States Supreme Court has commented upon the division of responsibilities as follows:

The Act gives the Agency no authority to question the wisdom of a state's choice of emission limitations if they are part of a plan which satisfies the standards of [the Clean Air Act]. . . . Thus, so long as the ultimate effect of a state's choice of emission limitations is compliance with the national standards for ambient air, the State is at liberty to adopt whatever mix of emission limitations it deems best suited to its particular situation.

Train v. Natural Resources Defense Council, 421 U.S. 60, 79, 95 S. Ct. 1470, 1482 [5 ELR 20264] (1975). Thus, it is clear that the state has primary authority under the Clean Air Act for administering a SIP, and the EPA is relegated to a secondary role. Upon EPA approval, the state regulations become the applicable SIP for the respective state and any violation of the SIP is actionable by the EPA, the state or private citizens in an appropriate United States District Court. 42 U.S.C. §§ 7410(d), 7413(b) and 7604.

The state's permitting authority for new facilities is derived in part from 42 U.S.C. §§ 7502(b)(6) and 7503, which grant the states authority to issue permits for new construction in "non-attainment areas." Non-attainment areas are regions of the state that have not yet achieved the NAAQS. In these areas, construction permits must set emission limits which represent the lowest achievable emission rate (hereinafter, "LAER"). LAER is the most stringent emission requirement under the Clean Air Act. 42 U.S.C. § 7501(3).

In its SIP, the Louisiana Department of Environmental Quality (hereinafter, "LDEQ") promulgated construction permitting procedures for new sources and emission limits for existing sources of VOCs. Louisiana Air Quality Reg. §§ 6.0 and 22.9.2. EPA formally approved these regulations after determining that they were designed to attain the ozone and other national standards. 47 Fed. Reg. 6017 (1982) (final approval). Section 6.0 contains detailed procedures for issuance of permits for construction of new facilities in non-attainment areas. Section 22.9.2(f) sets forth VOC emission limits for existing automobile coating processes.

Statement of Facts:

GM has owned and operated a light-duty truck assembly plant in Shreveport, Louisiana, since 1981. At the Shreveport plant, more than 2,800 employees manufacture 180,000 light-duty trucks per year. The manufacturing operations at the plant include several automobile coating operations. One of these coating operation is referred to as the topcoat process, which involves the application of color coatings to the trucks.

On August 8, 1977, prior to beginning construction of the Shreveport plant, General Motors applied to the Louisiana Air Control Commission (now called the Louisiana Department of Environmental Quality) for a permit to construct and operate the topcoat and other coating processes. The permit application contained a maximum rate of emissions, in pounds per hour and tons per year, of VOCs from the top coat operation.

At the time it submitted its application for a permit, GM anticipated using water-based topcoats containing an average of no more than 2.8 pounds of VOCs per gallon (minus water). The water-based VOC content was used to establish the maximum VOC emission rate in the permit. Affidavit of Gregory R. Peters PP4-6. LDEQ issued the permit to GM on September 7, 1977. LDEQ determined that the maximum emission rates contained in the permit application constituted LAER and therefore adopted those rates as the permit limits. Affidavit of Gustave Von Bodungen at P4.

At the time GM's permit was issued, the Shreveport area was a non-attainment area for ozone. Thus, GM was required to satisfy the requirements for approval of construction of new stationary sources in non-attainment areas as set out in EPA's December 21, 1976 interpretive ruling. 42 Fed. Reg. 55,534 (1876). Among other things, the ruling provided that permits issued thereunder must require facilities to meet LAER. GM's permit required it to achieve LAER with regard to the surface coating operations. Affidavit of George W. Kelley at P4.

After receiving the permit from LDEQ, GM determined that water-based topcoats were not a viable technology. Peters Affidavit at P9. The evidence presented to the court by GM shows that water-based topcoats are now obsolete and are not used by an American auto manufacturer at this time.

GM notified LDEQ in 1981 of its intent to use high solids topcoats to meet the permit emission limits. In a letter to LDEQ dated August 3, 1981, GM documented that the high solids top coats would result in VOC emissions equivalent to or less than those associated with water-based topcoats. In a letter dated March 2, 1982, LDEQ confirmed that the high solids topcoats would result in VOC emissions within the permit limits.

Although high solids coatings have a higher VOC content than water-based coatings, their method of application to the vehicle can result in identical or fewer VOC emissions. This is so, because water-based coatings can be applied at a transfer efficiency of only approximately 30-40 per cent, i.e., only 30-40 per cent of the paint sprayed actually adheres to the vehicle. High solids coatings, on the other hand, can be applied at a higher transfer efficiency than water-based coating, thus resulting in less VOC emissions.

On April 30, 1979, the governor of Louisiana submitted to the EPA proposed revisions to the Louisiana SIP. The proposed revisions included Reg. 22.9.2(f). That section limits VOC emissions from automobile and light-duty truck surface coating operations on the basis of pounds of VOC per gallon of coating (minus water). EPA [19 ELR 21311] approved Louisiana's SIP revisions, including the addition of Reg. 22.9.2(f), on February 14, 1980.

On January 16, 1986, the regional administrator of EPA Region VI issued a Notice of Violation to General Motors pursuant to 42 U.S.C. § 7413(a)(1), notifying GM of ongoing violations of the topcoat VOC coating limits contained in Reg. 22.9.2(f). According to the government, GM continued to operate its facility in violation of regulation 22.9.2(f) more than 30 days after the date of the issuance of the Notice of Violation. As a result, this action was commenced.

Analysis of Law and Facts:

Pursuant to Fed. R. Civ. P. 56(c), summary judgment shall be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." To sustain its initial burden, the moving party need only identify the lack of an essential element that the nonmoving party would be required to prove at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2554 (1986). Once the moving party has sustained its burden, the opponent must do more than simply show that there is some metaphysical doubt as to the material facts. Matsushita Electric Industrial Company v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 1356-57 (1986). In fact, the nonmoving party must come forward with "significant probative evidence demonstrating the existence of a triable issue of fact." Southmark Properties v. Charles House Corp., 742 F.2d 862, 877 (5th Cir. 1984). When the decision is to be made by the court, and there are no issues of witness credibility, the court may conclude on the basis of the affidavits, depositions, and stipulations before it, that there are no genuine issues of material fact even though the decision may depend on inferences to be drawn from what has been incontrovertably proved. Nunez v. Superior Oil Company, 572 F.2d 1119, 1124 (5th Cir. 1979). After reviewing the evidence and the arguments of both sides, the court believes that both motions should be denied.

GM argues that it is entitled to partial summary judgment because the complaint in this case does not allege that GM is permitting VOCs in excess of the permit limits. Thus, GM argues that the state-issued permit supersedes the requirements of § 22.9.2(f). The EPA argues, on the other hand, that GM's duty to comply with the terms of its permit is in addition to its duty to comply with the terms of the Louisiana SIP. In its cross-motion for summary judgment, the EPA contends that General Motors is in violation of § 22.9.2(f) and is liable for penalties of up to $ 25,000 per day pursuant to 42 U.S.C. § 413(b)(2).

GM has failed to satisfy the court that, as a matter of law, the requirements of § 22.9.2(f) have been superseded by its permit. Neither GM nor LDEQ has pointed to any specific statutory language to support such a proposition. Bald assertions, unsupported by either the terms of the Clean Air Act or the Louisiana SIP, are not sufficient to satisfy this court that GM is entitled to summary judgment as a matter of law on the topcoat claim. Page after page of redundant argument by both sides have done little to cast light on the issue.

As an initial matter, it appears that the terms of the Louisiana SIP are contrary to GM's position. Section 6.1.3 provides that approval by the Commission of any construction or modification or operation "does not relieve the owner or operator of responsibility to comply with regulations which are part of the applicable plan." Curiously, GM has failed to rebut the EPA's argument that this section mandates compliance with the provisions of the Louisiana SIP in addition to any state issued permit.

GM also argues that § 116 of the Clean Air Act provides independent authority for the topcoat emission limits contained in the GM permit. That section provides:

[N]othing in this chapter shall preclude or deny the right of any state or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutant or (2) any requirement respecting control or abatement or air pollution; except that if an emission standard or limitation is in effect under an applicable implementation plan . . ., such state or political subdivision may not adopt or enforce any emission standard or limitation which is less stringent than the standard or limitation under such plan or section.

42 U.S.C. § 7416 (emphasis added). GM argues that the permit limits satisfy § 22.9.2(f) because the State determined that the two standards are "equivalent." Thus, GM argues that its permit supersedes § 22.9.2(f) because the permit emission limits are at least as stringent. The EPA disagrees. In its most recent brief, the EPA points out several "serious deficiencies" in Louisiana equivalency determination. These deficiencies include the use of an unjustified baseline transfer efficiency figure for water-borne coatings and GM's failure to demonstrate equivalency for each type of coating to be used at the plant. According to the EPA, different coatings have different VOC contents and, therefore, different transfer efficiencies. It is the EPA's position that § 22.9.2(f) required continuous compliance in order to ensure maintenance of the NAAQS for ozone. Although the court believes that GM's equivalency arguments raises a substantial issue of material fact sufficient to deny the United States' cross-motion for summary judgment, the evidence before the court at this point is insufficient to conclude, as a matter of law, that the permit limits are equivalent to the limits contained in § 22.9.2(f).

GM's argument that the permit supersedes § 22.9.2(f) also appears to be inconsistent with the timing of the passage of § 22.9.2(f), vis-a-vis the issuance of GM's permit. GM applied for and received its permit on September 7, 1977. On April 30, 1979, the Governor of Louisiana submitted § 22.9.2(f) to the EPA as a proposed revision to the Louisiana SIP. The EPA conditionally approved § 22.9.2(f) on February 14, 1980. Thus, at that time the GM permit was approved by the State, the Louisiana SIP contained no regulation limiting VOC emissions from light-duty truck surface coating operations.

Section 22.0 of the Louisiana SIP is entitled "Control of Emission of Organic Compounds from New Sources and Existing Sources." (Emphasis added.) The evidence before the court indicates that GM's Shreveport plant is the only facility in the state subject to § 22.9.2(f). To accept GM's argument that its permit supersedes that section would render the limits in § 22.9.2(f) superfluous. GM would not be subject to the new limits because GM is already governed by the state-issued permit. Moreover, since it appears that GM was the only "existing source" of VOCs to which § 22.9.2(f) applied, accepting GM's argument would leave this court to conclude that § 22.0 does not mean what it says.

In a recent supplement, GM places heavy reliance on United States v. General Motors Corp., Civil Action No. 4-87-580-E [19 ELR 20628] (N.D. Tex. 1988), which involved the interpretation of the Texas SIP. Unlike the Louisiana SIP, the Texas SIP contains a provision which specifically grants the executive director of the Texas Air Control Board authority to approve, without consent or approval of the EPA, substantially equivalent Alternative Methods of Control (hereinafter, "AMOC") as an alternative to the controls originally set forth in the SIP. 31 T.A.C. § 115.401(a). Pursuant to this authority, the executive director issued an AMOC to GM which permitted the use of higher VOC content coatings. Judge Mahon found that the VOC content specifications in the Texas SIP were superseded by the AMOC issued to GM. Since the issuance of the AMOC was an implementation of the Texas SIP and not a modification, submission to the EPA for approval as a SIP provision was unnecessary. GM's compliance with the AMOC established, as a matter of law, that GM had not violated the Texas SIP andGM's motion for judgment on the pleadings was granted.

There is little doubt that Judge Mahon's decision is correct. Indeed, the result was required by the specific language of the Texas SIP. Nevertheless, such a result provides little solace to GM in the instant case because the Louisiana SIP does not contain an AMOC provision. The Louisiana SIP does have a provision that is only marginally similar to the Texas AMOC provision. Section 22.9.3(b) allows a source to request a compliance date extension based on its intent to develop an unproven low solvent technology. GM, however, has not argued that it has complied with § 22.9.3(b) or that this section justifies GM's equivalency argument. The existence of that section does show that the Louisiana SIP is not inflexible in its terms. Be that as it may, whether this section provides independent justification for GM's equivalency argument is far from clear, and the court is unwilling to grant a partial summary judgment on the present state of the record.

[19 ELR 21312]

Although each side has argued zealously that its motion should be granted, neither side has presented persuasive evidence in support of its position. At this point, it appears the crux of GM's argument is that of "equivalency." If GM can indeed demonstrate, after full discovery and a trial on the merits, that the Louisiana SIP and the Clean Air Act permit compliance through equivalency, it may well be entitled to judgment in its favor. To date, the EPA has not satisfied the court otherwise. Nevertheless, raising the issue at this point satisfies the court that there exists a substantial issue of material fact sufficient to deny the United States' cross-motion for summary judgment. Additionally, because the EPA has raised serious issues as to Louisiana's equivalency determination, GM is not entitled to partial summary judgment on the topcoat claim.

Accordingly, the motion for partial summary judgment filed by GM and the cross-motion for summary judgment filed by the United States are DENIED.

THUS DONE AND SIGNED at Shreveport, Louisiana, this 31st day of January, 1989.