United States v. AM General Corp.

No. S87-377 (32 ERC 1334) (N.D. Ind. September 21, 1990)

[21 ELR 20376]

The court holds that the Environmental Protection Agency (EPA) may proceed with a Clean Air Act (CAA) enforcement action even though EPA failed to act within 60 days on a state's request to redesignate the air quality control region in which an alleged CAA violation occurred. EPA had commenced enforcement proceedings against a military vehicle manufacturer for allegedly failing to utilize emission limitation techniques to achieve the lowest achievable emission rate for volatile organic compounds required in nonattainment areas. Relying on the U.S. Supreme Court's decision in General Motors Corp. v. United States, 20 ELR 20959, the court holds that EPA was not required to review within 60 days Indiana's state implementation plan revisions that would redesignate the attainment status of the county where defendant's facility is located. EPA is entitled to enforce the existing state implementation plan during its review of Indiana's proposed revisions.

Counsel for Plaintiff
Andrew Baker
Attorney General's Office
Federal Bldg., 507 State St., 4th Fl., Hammond IN 46320
(219) 937-5215

Counsel for Defendant
Lawrence Vanore, Brian Tabler
Barnes & Thornburg
1313 Merchants Bank Bldg., 11 S. Meridian, Indiana IN 46204
(317) 638-1313

Miller, J.:

Memorandum and Order

This cause is before the court on the defendant's motion for summary judgment on the plaintiff's complaint and on Count I of the counterclaim filed in response to that complaint. The United States Environmental Protection Agency ("EPA") filed this action alleging that defendant AM General Corporation ("AM General") was in violation of the Clean Air Act's emissions standards, as adopted for the State of Indiana. The EPA seeks to enjoin AM General's violations of those federally enforced state regulations. 42 U.S.C. §§7410, 7413(b). As both an affirmative defense and counterclaim to the complaint, AM General alleges that the EPA's failure to consider, within sixty days, a request by the State of Indiana for revisions in the emission standard (revisions that would have allowed the AM General plant's pollutant levels) bars the EPA from bringing Clean Air Act enforcement proceedings against it. 42 U.S.C. §7407(d). AM General now seeks summary judgment on the grounds that the EPA may not bring this action against the defendant [21 ELR 20377] and that they should have reviewed Indiana's proposed revision within time limits proscribed by statute.

During the extensive and excessive time in which this matter has been under advisement, the United States Supreme Court has resolved the challenging issues raised by the summary judgment motion. In light of General Motors Corporation v. United States, 110 S. Ct. 2528 [20 ELR 20959] (1990), AM General's motion must be denied.

I. Factual Background

The facts set forth below appear to be without substantial dispute. When it moved for summary judgment, AM General filed its statement of material facts as to which it contends no genuine issue exists, pursuant to District Rule 11. That rule provides that the court will assume that facts so set forth exist without controversy except to the extent contested in a statement of genuine issues filed by the opponent. See Skagen v. Sears, Roebuck & Co., No. 89-2081 (7th Cir. 1990); Tatalovich v. City of Superior, 904 F.2d 1135 (7th Cir. 1990). The EPA filed no such statement; accordingly, the court assumes that the facts set forth by AM General are without dispute.

Pursuant to Rule 56(d), the court specifies that the facts set forth in Part I of this memorandum appear without substantial controversy; upon the trial of this action, those facts shall be deemed established, and the trial shall be conducted accordingly.

Seven years after its adoption in 1963, the Clean Air Act was amended, substantially increasing the federal role in controlling air pollution. Section 110 of the Clean Air Act requires the states to hold hearings and adopt state implementation plans ("SIPs") designed to ensure the attainment and maintenance of air quality standards required under the amendments. 42 U.S.C. §7410(a)(2). Pursuant to Section 107(d)(1) of the Act, the states must submit to the EPA lists of regions within the state classified as attainment, non-attainment, or those which could not be labeled as either.¹

The states also may request revisions to the designation lists pursuant to Section 107(d)(5) of the Act, 42 U.S.C. §7407(d)(5).

Enforcement of the Clean Air Act and its federally-approved SIPs is initiated by the issuance of a Notice of Violation ("NOV") by the EPA. 42 U.S.C. § 7413(a)(1). If the violation continues for more than thirty days after the issuance of the NOV, the EPA may issue an administrative order directing compliance with the SIP or bring a civil action. 42 U.S.C. §§7413(a) and (b).

St. Joseph County, Indiana was designated as a nonattainment area by the EPA in a SIP of 1978, pursuant to the request of the State of Indiana. In 1981, the State of Indiana submitted a revised SIP to the EPA, designed to achieve the national air quality standards for ozone. The EPA approved the SIP revisions on February 16, 1982. Pursuant to the revised SIP, persons in a nonattainment area seeking to modify a facility so as to result in the potential increase of emissions must demonstrate that devices or techniques used by such facility achieve the lowest achievable emission rate ("LAER"). 42 U.S.C. §7502.

AM General began producing military vehicles for the United States Armed Forces at its Mishawaka facility in St. Joseph County, Indiana in 1983. As part of this production, AM General modified its painting facilities to include spray booths and drying ovens, resulting in the emission of volatile organic compounds ("VOCs"). When production of the vehicles first began, the VOC emission levels were not sufficiently significant to subject AM General to requirements of Indiana's revised SIP. However, it was expected that sometime in the future, the VOC emission levels would reach such a level of significance.

On February 8, 1985, the State of Indiana submitted a request to the EPA to redesignate St. Joseph and Elkhart Counties as ozone attainment areas, pursuant to Section 107(d) of the Clean Air Act, 42 U.S.C. §7407(d). The EPA proceeded with the process of review over this request for redesignation, but as of the parties' last submissions to this court, had not issued a final decision.

On February 6, 1986, the St. Joseph County Health Department issued a construction permit to AM General's Mishawaka, Indiana facility allowing an increase in VOC emissions. On June 19, 1986, the EPA issued a notice of violation to AM General for failing to utilize emission limitation techniques to achieve LAER for VOCs required in non-attainment areas. The government then commenced this civil action on July 27, 1987.

The court has jurisdiction over this cause pursuant to 28 U.S.C. §1331 and 42 U.S.C. §7413.

II. The Summary Judgment Motion

A. The Parties' Arguments

AM General seeks summary judgment on Count I of its counterclaim and on the EPA's complaint. AM General contends that the EPA has a mandatory duty under Section 107(d)(2) of the Clean Air Act, 42 U.S.C. §7407(d)(2), to act upon a state's request to redesignate an air quality control region no later than sixty days after the state submits its request. AM General argues that the EPA's failure to act on the proposed revision within the sixty day period bars that agency from enforcing emission standards affected by the proposal. Hence, AM General contends that summary judgment on the government's complaint is appropriate, citing, Bethlehem Steel Corp. v. EPA, 723 F.2d 1303, 1306 [14 ELR 20090] (7th Cir. 1983); Western Oil & Gas v. EPA, 633 F.2d 803, 805 [10 ELR 20985] (9th Cir. 1980); NRDC v. Train, 545 F.2d 320, 324-25 [7 ELR 20004] (2d Cir. 1976);² American Cyanamid Company v. EPA, 810 F.2d 493 [17 ELR 20642] (5th Cir. 1987).³

Additionally, in Count I of its counterclaim, AM General claims entitlement to an order compelling the EPA to perform its mandatory duty to consider and promulgate Indiana's redesignation of St. Joseph County, pursuant to Section 304(a)(2) of the Clean Air Act, 42 U.S.C. §7604(a)(2).

In response, the EPA contends that the Clean Air Act contains no mandatory duty for the agency to act on a redesignation request within sixty days. The EPA argues that the sixty day time limit applies only to original designation requests and not to subsequent requests for redesignation. Specifically, the EPA points out that Section 107(d)(2) provides a time limit for originally proposed plans submitted under Section 107(d)(1) and not revisions to those plans requested under Section 107(d)(5). The government further asserts that even if such a mandatory duty existed, dismissal or stay of enforcement proceedings is an inappropriate remedy for the time delay. The EPA refers the court to the statutory language of Sections 107(d)(1), (2), and (5), 42 U.S.C. §7407(d), and the holdings of the First and Sixth Circuits on this issue.

B. Standard of Review for Summary Judgment

A party seeking summary judgment must demonstrate that no genuine issue of fact exists for trial and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Certain Underwriters of Lloyd's v. General Accident Ins. Co. of America, 909 F.2d 228, 231 (7th Cir. 1990). If that showing is made and the motion's opponent would bear the burden at trial on the matter that forms the basis of the motion, the opponent must come forth with evidence to show what facts are in actual dispute. Lujan v. National Wildlife Federation, 110 S. Ct. 3177, 3186 [20 ELR 20962] (1990); Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Sims v. Mulcahy, 902 F.2d 524, 540 (7th Cir. 1990). If the motion's opponent fails to do so, summary judgment is proper. Tatalovich v. City of Superior, 904 F.2d 1135, 1142 (7th Cir. 1990). A genuine factual issue exists only when there is sufficient evidence for a jury to return a verdict for the motion's opponent. Hines v. British Steel Corp., 907 F.2d 726, 728 (7th Cir. 1990). Summary judgment should be granted if no reasonable jury could return a verdict for the motion's opponent. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); Baucher v. Eastern Indiana Production Credit Ass'n, 906 F.2d 332, 334 (7th Cir. 1990).

The parties cannot rest on mere allegations in the pleadings, [21 ELR 20378] Koclanakis v. Merrimack Mut. Fire Ins. Co., 899 F.2d 673, 675 (7th Cir. 1990), or upon conclusory allegations in affidavits. Mestayer v. Wisconsin Physicians Service Ins. Corp., 905 F.2d 1077, 1079 (7th Cir. 1990). The court must draw any permissible inferences from the materials before it in favor of the non-moving party, Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); Illinois Bell Telephone Co. v. Hanes and Co., Inc., 905 F.2d 1081, 1087 (7th Cir. 1990), as long as the inferences are reasonable. Renovitch v. Kaufman, 905 F.2d 1040, 1044 (7th Cir. 1990). The non-moving party must show that the disputed fact is material, or outcome-determinative, under applicable law. Johnson v. Pelker, 891 F.2d 136, 138 (7th Cir. 1989).

III. Applicable Law

In General Motors Corporation v. United States, 110 S. Ct. 2528 [20 ELR 20959] (1990), the Supreme Court considered (1) whether the four month time limit on EPA review of an original state implementation plan or SIP under the Clean Air Act⁴ also applies to its review of a SIP revision, and (2) whether, if the EPA fails to complete its review of a SIP revision in a timely manner, the EPA may enforce an existing SIP. The Court answered both questions in the negative. Hence, this recent Supreme Court case squarely dealt with issues raised by AM General's motion for summary judgment in this cause and, therefore, is the controlling law for application by this court.

The General Motors Court held that the four month time limit for the EPA to make its determinations concerning a SIP plan applies only to the originally submitted plan and not to any subsequently proposed revisions of that plan. 110 S. Ct. at 2534-35. In so holding, the Court noted the lack of a time limit in Section 110(a)(3) (which deals with the state's proposed revisions) or reference in subsection (3) to the four month time limit in Section 110(a)(2). The Court also discussed how the urgent need, at the adoption of these statutory sections, was for initial approval of SIPs for the different states and not for immediate revision of those plans. 110 S. Ct. at 2533.

Finding that the EPA was not required to review proposed plan revisions within a certain time period, the Court turned to General Motors Corporation's claim that the EPA is barred from enforcing the requirements of the applicable SIP during the pendancy of revisions. The Court stated:

There is nothing in the statute that limits EPA's authority to enforce the "applicable implementation plan" solely to those cases where EPA has not unreasonably delayed action on a proposed SIP revision.

110 S. Ct. at 2536-37. Further, the Court found it significant that Congress enacted an enforcement bar elsewhere in the Clean Air Act, 42 U.S.C. § 7413(d)(10),⁵ but failed to include one in those sections dealing with proposed plan revisions. 110 S. Ct. at 2537.

General Motors Corp. v. United States defeats AM General's argument and overrules those precedents upon which the defendant relies. The EPA was under no duty to review Indiana's proposed revisions of its SIP within any time frame other than a reasonable one. The reasonableness of the EPA's actions may be a question of fact for consideration later in this case, but not on the summary judgment issues. Moreover, the EPA was entitled to enforce the SIP in existence against AM General during its review of Indiana's proposed revisions, notwithstanding the effect that the adoption of such revisions would have on AM General's alleged violations of Indiana's SIP and the Clean Air Act.

AM General has failed to demonstrate support for its legal positions on summary judgment in federal law.

IV. Conclusion

For the foregoing reasons, AM General's motion for summary judgment on the complaint and Count I of the counterclaim is DENIED. A telephonic status conference in this cause is hereby scheduled for October 2, 1990 at 9:00 a.m. At that time, the court will discuss with counsel the time necessary for amendments to the pleadings and completion of discovery and schedule further proceedings in this cause.

SO ORDERED.

1. "Attainment areas" are those which have attained the air quality standards under the Clean Air Act.

2. These cases generally discuss the duty of the EPA to comply with the requirements of the Clean Air Act, but do not specifically address the alleged sixty day requirement.

3. American Cyanamid held that Clean Air Act enforcement proceedin gs cannot be commenced where EPA action on a state's proposed revision is delayed beyond the statutory deadline. This Fifth Circuit's interpretation of the issue was not adopted by the First and Sixth Circuits, General Motors Corporation v. EPA, 871 F.2d 495 [19 ELR 20841] (1st Cir. 1989), cert. granted, 58 U.S.L.W. 3369 (1989); United States v. Alcan Foil Products, 889 F.2d 1513 [20 ELR 20302] (6th Cir. 1989), cert. denied, 110 S. Ct. 3213 (1990), and eventually was overruled by the Supreme Court's decision in General Motors Corporation v. United States, 110 S. Ct. 2528 [20 ELR 20959] (1990), discussed below.

4. The Court derived the four month time limit from Section 110(a)(2) of the Clean Air Act, regulating the submission of plan concerning air quality control regions. 42 U.S.C. §7410(a)(2). The defendant's arguments suggest that the sixty day time limit suggested by Section 107(d)(2) applies to plans affecting quality control regions, 42 U.S.C. §7404(d)(2), but courts addressing this issue (including the Supreme Court in General Motors) uniformly refer to Section 110(a)(2). United States v. Alcan Foil Products Division, 889 F.2d 1513 [20 ELR 20302] (6th Cir. 1989), cert. denied, 110 S. Ct. 3213 (1990); General Motors Corporation v. EPA, 871 F.2d 495 [19 ELR 20841] (1st Cir.), cert. granted, 58 U.S.L.W. 3369 (1989); American Cyanamid Company v. EPA, 810 F.2d 493 [17 ELR 20642] (5th Cir. 1987); Duquesne Light Company v. EPA, 698 F.2d 456 [13 ELR 20251] (D.C. Cir. 1983). Since AM General relies on the cited cases in its position on summary judgment, this court will consider AM General's arguments in light of Section 110(a)(2).

5. That statutory provision prohibits federal enforcement action during the period when a final compliance order with respect to a party is in effect. 42 U.S.C. §7413(d)(10).