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Steel-Arkansas v. Big River Steel, LLC

United States District Court, E.D. Arkansas, Jonesboro Division

February 25, 2015

NUCOR STEEL-ARKANSAS; and NUCOR YAMATO STEEL COMPANY, PLAINTIFFS
v.
BIG RIVER STEEL, LLC, DEFENDANT

For Nucor Steel-Arkansas, Nucor-Yamato Steel Company, Plaintiffs: David R. Taggart, LEAD ATTORNEY, PRO HAC VICE, Bradley Murchison Kelly & Shea LLC, Shreveport, LA; Jerald N. Jones, LEAD ATTORNEY, PRO HAC VICE, Bradley, Murchison, Kelly & Shea LLC, Baton Rouge, LA; Mark H. Allison, Michael G. Smith, William C. Bird, III, LEAD ATTORNEYS, Dover Dixon Horne PLLC, Little Rock, AR.

For Big River Steel LLC, Defendant: Mark W. DeLaquil, LEAD ATTORNEY, PRO HAC VICE, Baker & Hostetler, LLP, Washington, DC; Martin T. Booher, LEAD ATTORNEY, Karen Swanson Haan, Michael J. Montgomery, Baker & Hostetler LLP, Cleveland, OH.

OPINION AND ORDER

J. LEON HOLMES, UNITED STATES DISTRICT JUDGE.

This is a citizen suit brought under the Clean Air Act seeking an injunction to stop the construction of a steel mill for which the appropriate regulatory authority has issued a construction permit. The question is whether the Clean Air Act authorizes such a suit. It does not.

The antagonists are competitors in the steel industry. Nucor Steel-Arkansas and Nucor Yamato Steel Company are sister entities that operate two steel mills near Blytheville in Mississippi County, Arkansas. Big River Steel holds a final permit issued by the Arkansas Department of Environmental Quality on September 18, 2013, for a steel mill to be constructed near Osceola in Mississippi County, Arkansas. After the Arkansas Department of Environmental Quality issued the final permit, Nucor requested a Commission Review and an Adjudicatory Hearing by the Arkansas Pollution Control and Ecology Commission. Pursuant to that request, an administrative hearing officer conducted a four-day evidentiary hearing and issued a seventy-one-page opinion recommending that the Commission affirm the issuance of the permit. The Commission adopted that recommendation and affirmed the issuance of the permit. Nucor

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has appealed that decision to the Arkansas Court of Appeals and has also petitioned the Environmental Protection Agency to object to the permit.[1] In addition to those steps, Nucor has commenced this action, seeking injunctive relief to stop Big River Steel from constructing or continuing to construct the steel mill. Big River Steel has moved to dismiss the complaint.

Prior to 1970, the Clean Air Act was primarily a federal research program for air pollution. United States v. EME Homer City Generation, L.P., 727 F.3d 274, 278 (3d Cir. 2013). In 1970 Congress amended the Act and charged the Environmental Protection Agency with setting national maximum permissible levels of common pollutants for any given area. Id.; Sierra Club v. Otter Tail Power Co., 615 F.3d 1008, 1011 (8th Cir. 2010). These maximum permissible levels of pollutants are called National Ambient Air Quality Standards or NAAQS. EME Homer City, 727 F.3d at 278; Otter Tail, 615 F.3d at 1011. The states may assume primary responsibility for deciding how to meet the NAAQS within their borders. Utility Air Regulatory Group v. Environmental Protection Agency, 134 S.Ct. 2427, 2435, 189 L.Ed.2d 372 (2014); EME Homer City, 727 F.3d at 278-79. Each state that assumes this responsibility must develop and submit to the EPA a " State Implementation Plan." 42 U.S.C. § 7410. For areas that meet the NAAQS (" attainment" areas), in 1977 Congress enacted the Prevention of Significant Deterioration (PSD) program as Part C of Title I of the Clean Air Act, 42 U.S.C. § § 7470-79.[2] Pursuant to the PSD provisions of Title I, before constructing or modifying a " major emitting facility" in any area in which the PSD program applies, the operator must obtain a permit from the state regulatory authority (or the EPA if the state has chosen not to take responsibility). 42 U.S.C. § 7475(a).[3]" To qualify for a permit, the facility must not cause or contribute to the violation of any applicable air quality standard, § 7475(a)(3), and it must comply with emissions limitations that reflect the 'best available control technology' (or BACT) for each pollutant subject to regulation under' the Act." Utility Air Regulatory Group, 134 S.Ct. at 2435 (citing 42 U.S.C. § 7475(a)(4)). " Construction permits [under the PSD program] specify the terms and conditions under which emissions units must be constructed and must operate to be in compliance." Clean Air Act Handbook 138 (J. Domine & A. Zacaroli eds., 3d ed. 2011).

In addition to the permit required for facilities within the PSD program, Title V of the Clean Air Act, which was enacted in 1990, " makes it unlawful to operate any 'major source,' wherever located, without a comprehensive operating permit." Utility Air Regulatory Group, 134 S.Ct. at 2435-36 (citing 42 U.S.C. § 7661a(a)) (emphasis in the original).

Unlike the PSD program, Title V generally does not impose any substantive pollution-control requirements. Instead, it is designed to facilitate compliance and enforcement by consolidating into a single document all of a facility's obligations under the Act. The permit must include all 'emission limitations and

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standards' that apply to the source, as well as associated inspection, monitoring, and reporting requirements.

Id. (citing 42 U.S.C. § 7661c(a)-(c)).

The Arkansas Department of Environmental Quality administers both of these permit programs in Arkansas. Ark. Code Ann. § 8-4-311(a)(1); APC& EC Reg. 19.101 et seq.; 40 C.F.R. § § 52.170-52.200. Like a number of states, Arkansas combines the PSD and operating permits into a single permit.

As noted, Nucor contested the issuance of the permit to Big River Steel in an administrative hearing before the Arkansas Pollution Control and Ecology Commission, which hears appeals from permitting decisions of the Arkansas Department of Environmental Quality. Ark. Code Ann. § 8-4-201. And, after that body affirmed the decision of the Arkansas Department of Environmental Quality to grant the permit to Big River Steel, Nucor appealed to the Arkansas Court of Appeals for judicial review pursuant to Ark. Code Ann. § 8-4-223.[4]

Title V and the PSD provisions of Title I require a state permitting authority to send the EPA a copy of each permit application and each permit proposed to be issued and issued as a final permit. 42 U.S.C. § 7475(d)(1); 42 U.S.C. § 7661d(a)(1)(A) & (B). The EPA has the right to object to the issuance of a permit, and, under Title V, if it does not object, a person may petition the EPA to do so. 42 U.S.C. § 7475(d)(2)(C)(I); 42 U.S.C. § 7661d(b)(1) & (2). Any denial of such a petition is subject to judicial review by the appropriate federal court of appeals under section 7607. Id. at (b)(2). Furthermore, the citizen suit provision of the Clean Air Act, 42 U.S.C. § 7604(a)(2), authorizes the district courts to order the EPA to perform any act or duty that is not discretionary. 42 U.S.C. § 7604(a)(2). Pursuant to that provision, Nucor has commenced an action in the District of Columbia to compel the EPA to grant or deny its petition requesting the EPA to object to the Title V operating permit issued to Big River Steel by the Arkansas Department of Environmental Quality.

Nucor's complaint in this action alleges that the suit arises under the Clean Air Act, 42 U.S.C. § 7401 et seq., including the Arkansas State Implementation Plan approved by the EPA pursuant to 42 U.S.C. § 7410 to implement the NAAQS, and the operating permit requirements of Title V of the Clean Air Act, 42 U.S.C. § 7661 et seq. See Document #1 at 2 ¶ 4. Nucor alleges that its claims are authorized by section 304(a)(1) and section 304(a)(3) of the Clean Air Act, 42 U.S.C. § 7604(a)(1) & (3). Id. at 3 ¶ ¶ 6-8. Nucor's complaint alleges twenty-seven counts: Counts I through XIII allege that Big River Steel's permit fails to comply with applicable PSD requirements and are as follows:

Count I: Failure to conduct pre-construction monitoring for PM2.5 at the site of the Big River Steel facility;
Count II: Exclusion of areas based on being below the PM2.5 significant impact level after those significant impact levels were vacated;
Count III: Failure to place receptors on public road and at and/or around neighboring facilities;
Count IV: Selection of non-representative background monitor for PM2.5;
Count V: Failure to model or otherwise consider secondarily formed PM2.5;
Count VI: Failure to include natural gas sources in modeling;
Count VII: Failure to correctly model melt shop and galvanizing line rooftop fugitive emissions;

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Count VIII: Failure to consider building conditions and downwash from the Bung, Viskase, and Plum Point Facilities;
Count IX: Failure to properly model fugitive windblown emissions;
Count X: Underestimation of emissions from storage piles;
Count XI: Failure to model at permitted limits;
Count XII: Incomplete design and placement of emissions sources; and
Count XIII: Improper reduction of emissions rates from bunge grain elevator.

Counts XIV through XXI allege that Big River Steel failed to satisfy the Best Available Control Technology (BACT) ...


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