Texans United for a Safe Economy Education Fund v. Crown Central Petroleum Corp.

No. H-97-2427 (S.D. Tex. August 3, 1998)

The court holds that a state environmental agency's enforcement actions against a petroleum company preclude a citizen suit against the company for Clean Air Act (CAA) violations. The court first holds that CAA § 304 does not permit the litigation to proceed. CAA § 304 precludes citizen suits where a state agency has commenced and is diligently prosecuting a civil action in court to require compliance with the standing limitation or order. Plaintiffs failed to identify any deficiency in the state agency's proposed relief, which is the substantial equivalent to that available in court. In addition, the procedures under which the state agency conducts enforcement actions provide for meaningful citizen participation as a matter of right. And there is no evidence that the state agency's efforts have been dilatory or otherwise in bad faith. Absent evidence to the contrary, the agency's diligence in prosecuting the CAA violations is presumed.

Counsel for Plaintiffs
Mark Wenzler
Trial Lawyers for Public Justice
1717 Massachusetts Ave. NW, Ste. 800, Washington DC 20036
(202) 797-8600/8700

Counsel for Defendant
Louis S. Zimmerman
Fulbright & Jaworski
600 Congress Ave., Ste. 2400, Austin TX 78701
(512) 474-5201

[28 ELR 21563]

Gilmore, J.:

Memorandum Opinion and Order

Plaintiffs, individuals and organizations with members who reside in or frequently visit Pasadena, Texas, filed this citizen suit pursuant to section 304 of the Clean Air Act, 42 U.S.C. § 7604. Plaintiffs allege that Crown Central Petroleum Corporation ("Crown") has violated provisions of the Clean Air Act by exceeding the federally-prescribed limits for releases of sulfur dioxide into the atmosphere and for burning fuel gas containing hydrogen sulfide. Plaintiffs also allege that Crown has failed to comply with an administrative order and certain permits issued by the Texas Natural Resource Conservation Commission ("TNRCC").

The case is now before the Court on Crown's Motion for Summary Judgment on Grounds of Statutory Preclusion (Instrument # 26), Crown's Motion for Summary Judgment Based on Plaintiffs' Lack of U.S. Constitution Article III Standing (Instrument # 40), and Plaintiffs' Cross-Motion for Summary Judgment on the standing issue (Instrument # 48). The Court has carefully reviewed the entire record and applicable legal authorities. Based on this review, the Court concludes that relevant appellate court case law indicates that section 304 does not permit this litigation to proceed. Crown's Motion for Summary Judgment on the issue of statutory preclusion is granted.

I. Section 304 of the Clean Air Act

The Clean Air Act contains a provision for citizen enforcement suits, but does not permit such litigation by citizens if the state regulatory agency "has commenced and is diligently prosecuting a civil action in a court of the United States of a State to require compliance with the standard, limitation, or order, but in any such action in a court of the United States any person may intervene as a matter of right." 42 U.S.C. § 7604(b)(1)(B). This provision recognizes the Congressional policy of avoiding federal court entanglement which is necessarily duplicative and potentially disruptive of state enforcement efforts. As noted by the United States Supreme Court, citizen suits are "meant to supplement rather than to supplant governmental action [and] are proper only 'if the Federal, State, and local agencies fail to exercise their enforcement responsibility.'" Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 60 [18 ELR 20142] (1987) (referring specifically to citizen suits under the Clean Water Act). Additionally, the regulatory agencies have specialized knowledge and experience applying and enforcing the specific federal regulations at issue. Failure to defer to the agency enforcement proceedings impedes the achievement of the statutory goal of the Clean Air Act by diverting corporate resources, both in terms of finances and attention, away from the efforts to remedy any violations.

II. Third Circuit Interpretation

The United States Court of Appeals for the Third Circuit, the only federal appellate court to interpret this provision of section 304, held that "an administrative board may be a 'court' if its powers and characteristics make such a classification necessary to achieve statutory goals." Baughman v. Bradford Coal Co., 592 F.2d 215, 217 [9 ELR 20147] (3d Cir.), cert. denied, 441 U.S. 961 (1979). The Third Circuit noted that the legislative history indicated

[28 ELR 21564]

that Congress intended to provide for citizens' suits in a manner that would be least likely to clog already burdened federal courts and most likely to trigger governmental action which would alleviate any need for judicial relief.

Id. at 218, quoting City of Highland Park v. Train, 519 F.2d 681, 690-91 [5 ELR 20408] (7th Cir. 1975), cert. denied, 424 U.S. 927 (1976).

A. Substantially Equivalent Relief

For an administrative agency such as TNRCC to qualify as a "court" for purposes of section 304, the Court first must find that the agency is "empowered to grant relief which will provide meaningful and effective enforcement of an implementation plan." Id. at 218-19. TNRCC orders can require many forms of corrective action on the part of the violator. The TNRCC can order the violator to undertake any action necessary under the circumstances to control the polluting condition. TEX. WATER CODE § 7.073(2).¹ Continued violations of a TNRCC order may be addressed by the TNRCC either through a suit for civil penalties or an administrative enforcement action. TEX. WATER CODE § 7.106.

The TNRCC also has the authority to impose monetary penalties. TEX. WATER CODE § 7.052(b). The amount of the penalties, while less than the maximum which could be imposed by the Court, is the amount Congress deemed sufficient to allow the Environmental Protection Agency ("EPA") to delegate the federal operating permit program to the state. See 42 U.S.C. § 7611a(b)(5)(E).

In this case, the TNRCC in 1995 ordered Crown to implement corrective action. The currently ongoing TNRCC proceedings, relating both to alleged violations by Crown of the 1995 Order and to alleged recent violations, have resulted in a recommended monetary penalty in excess of $ 650,000 and specific injunctive relief which includes the installation of certain equipment at the Crown facility with a capital cost in excess of $ 300,000. Plaintiffs have failed to identify any deficiency in this proposed relief, which is the substantial equivalent to that which would be available in this Court. Indeed, this relief likely exceeds that which would be imposed by this Court based on the serious standing issues and the significant deficiencies in the evidence presented by Plaintiffs' expert.

B. Procedures for Citizen Participation

Having satisfied the first requirement under Baughman, the TNRCC must also have procedures for effective participation by "citizen gadflies." Baughman, 592 F.2d at 219. Plaintiffs admit that the TNRCC has considerable procedural safeguards which include intervention, hearings, independent decisionmakers, and transcripts of proceedings. Although Plaintiffs argue that these safeguards apply only in contested proceedings, the are effectively available unless the matter is amicably resolved. Such is also the situation in a state or federal court. Cases which are settled soon after filing do not involve hearings, transcripts, interventions, or the need for an independent decisionmaker.

Public involvement in the TNRCC's administrative enforcement actions is a matter of right. All hearings must be public. TEX. WATER CODE § 7.058. Any administrative order or proposed agreement requires a period for public comment. TEX. WATER CODE § 7.075. In this case, Plaintiffs have fully availed themselves of the many opportunities to participate in the TNRCC enforcement proceedings against Crown. They have participated in meetings with regulatory personnel and have corresponded frequently with the agency regarding its enforcement efforts against Crown. The procedures under which the TNRCC conducts enforcement actions satisfy the requirement that they provide for meaningful citizen participation.

III. Diligent Prosecution

The agency enforcement action, whether administrative or through formal court proceedings, must be diligently pursued. In this case, there is no evidence which raises a fact issue regarding the diligence with which the TNRCC is prosecuting its enforcement efforts against Crown. There is no evidence that the TNRCC's efforts have been dilatory or otherwise in bad faith. Absent evidence to the contrary, the agency's diligence in prosecuting Clean Air Act violations is presumed. See Glazer v. American Ecology Environmental Services Corp., 894 F. Supp. 1029, 1037 [26 ELR 20108] (E.D. Tex. 1995).

IV. Conclusion and Order

Section 304 of the Clean Air Act precludes citizen suits where the state agency is diligently prosecuting the issue in court. The Third Circuit has held that an administrative enforcement agency qualifies as a "court" for purposes of section 304 if certain requirements are satisfied. In this case the undisputed evidence establishes that the TNRCC is empowered to provide effective relief which is substantially equivalent to that available in this Court. The TNRCC also provides for meaningful citizen participation as a matter of right. As a result, applying the interpretation from the only federal appellate court to address the meaning of section 304, the Court concludes that the TNRCC's enforcement actions against Crown, which are being diligently prosecuted, preclude this citizen suit.

Although the Court notes that Plaintiffs' standing in this case is questionable at best, the Court's decision on the statutory preclusion issue renders the Cross-Motions for Summary Judgment as to Article III standing moot. Plaintiffs' Motion for Preliminary Injunction (Instrument # 58) is also moot. Accordingly, it is hereby

ORDERED that Defendant's Motion for Summary Judgment on Grounds of Statutory Preclusion (Instrument # 26) is GRANTED. Defendant's Motion for Summary Judgment Based on Plaintiffs' Lack of U.S. Constitution Article III Standing (Instrument # 40), Plaintiffs' Cross-Motion for Summary Judgment on the standing issue (Instrument # 48), and Plaintiffs' Motion for Preliminary Injunction (Instrument # 58) are DENIED AS MOOT. An appropriate final judgment will issue separately.

Final Judgment

In accordance with the Memorandum Opinion and Order issued this day, it is hereby

ORDERED that Defendant's Motion for Summary Judgment on Grounds of Statutory Preclusion (Instrument # 26) is GRANTED.

Each party shall bear its own taxable costs.

THIS IS A FINAL JUDGMENT.

1. In September 1997, the Texas Legislature consolidated the statutory provisions regarding the TNRCC's enforcement powers, including those under the Clean Air Act, under the Texas Water Code, Chapter 7.