In a major win for the federal government, the U.S. Court of Appeals for the Fifth Circuit ruled on October 1, 2018 in United States v. Luminant Generation Co., (5th Cir., No. 17-10235, Oct. 1, 2018), that the federal statute of limitations at 28 U.S.C. § 2462 does not bar federal injunctive relief for PSD violations. The court also reversed a finding of no jurisdiction by the district court and remanded the case to the district court to determine if injunctive relief was warranted, without directing that it be required. The court did hold, however, that 28 U.S.C. § 2462 bars federal legal (e.g., penalty) relief from the start of construction and did not extend its holding on injunctive relief to private parties.
The federal government brought an action against Luminant Generation Company and Big Brown Power Company for alleged illegal major modifications of the Martin Lake and Big Brown power plants respectively. The federal complaint alleged violations at Martin Lake between 2005 and 2009 and at Big Brown in 2005. The government filed its action in 2013. Sierra Club later joined as a private party intervenor. The defendant power companies argued that the action should be dismissed because the complaint was filed more than five years after construction started. The government and Sierra Club argued that each day the plants continue to operate constituted a new day of violation. The district court held that the federal statute of limitations, 28 U.S.C. § 2462, applies to claims on the “first date” that they accrued, which was more than five years prior, and ordered the dismissal of the penalty claims on this basis. The district court applied the “concurrent remedy” doctrine to hold the injunctive claims should be similarly dismissed. Finally, the district court held that it was without jurisdiction over the injunctive relief under Federal Rule of Civil Procedure 12(b)(1) because the violations were not continuing.
The Fifth Circuit began with the language of Clean Air Act Section 165 (42 U.S.C. § 7475) and held that its requirements were preconditions to construction and “do not impose post-construction operational obligations on facilities.” Slip op. at 11. The Fifth Circuit held that implications from language in other parts of the Clean Air Act and in the Fifth Circuit’s prior decision in United States v. Marine Shale Processors, 81 F.3d 1329 (5th Cir. 1996), did not overcome the plain language of Section 165. The Fifth Circuit also held that the requirements for issuing a Texas preconstruction permit are preconditions for issuance of a permit, and do not create a continuing violation, citing CleanCOALition v. TXU Power, 536 F.3d 469, 477 (5th Cir. 2008). The Fifth Circuit thus upheld the district court’s holding that the government’s (and Sierra Club’s) claims for penalties were barred. Slip op. at 14.
The Fifth Circuit then turned to injunctive relief. It noted that the plain language of 28 U.S.C. § 2462 does not apply to injunctive relief and that “the Supreme Court has been equally clear in holding that “an action on behalf of the United States in its governmental capacity . . . is subject to no time limitation, in the absence of congressional enactment clearly imposing it.” E.I. Du Pont De Nemours & Co. v. Davis, 264 U.S. 456, 462 (1924). The Fifth Circuit found that Congress had given no consent to a bar on federal injunctive claims, and that therefore the government’s claims must be reinstated. The court was clear, however, that “the concurrent-remedies doctrine may properly be invoked against Sierra Club, a private party acting on its own behalf.” Slip op. at 16.
The Fifth Circuit finally turned to the district court’s claim that it lacked jurisdiction pursuant to Rule 12(b)(1) because Clean Air Act section 167 (42 U.S.C. 7477) only applies to ongoing operations. The Fifth Circuit disagreed, finding that Section 167 did not displace Section 113 and that the district court thus had jurisdiction to hear the injunctive relief claims under Section 113. The court remanded only the federal injunctive relief claims back to the district court. In directing the remand, the Fifth Circuit stated that the district court would need to determine whether injunctive relief was appropriate under the applicable standards and whether the injunctive relief might constitute a “penalty” barred by 28 U.S.C. § 2462, which had not been argued one way or the other. The Fifth Circuit closed by noting that “We repeat that we do not prejudge whether equitable relief is available here.”
Luminant Generation adds to our understanding of the structure of the Clean Air Act’s PSD program. The Fifth Circuit joined the Third, Seventh, Eighth, Tenth, and Eleventh Circuits in holding that the statute of limitations begins to run on a Section 165 (PSD) claim on the first day that the claim accrues. The Fifth Circuit joined the Tenth and Eleventh Circuits in holding that there is a “sovereign” exception to the concurrent remedies doctrine that allowed the federal government action, but not the Sierra Club action, to survive and allow potential injunctive relief beyond five years. In reaching this conclusion, however, the court left open whether injunctive relief might, in some circumstances, constitute a “penalty” subject to the 28 U.S.C. § 2462 bar and whether the government had demonstrated that injunctive relief was warranted in the first instance.
The impact of Luminant Generation may be greater than expected because of its clarity. It appears to put the nail in the coffin of plaintiffs’ “continuing violation” theory, at least in states that have adopted federal PSD language, and hence restricts most legal damages to the five years following commencement of construction. It does leave open the possibility of injunctive relief for older violations, but restricts such relief to the government, which may be less willing to wield this power than private actors such as the Sierra Club. Luminant Generation is thus an important case in construing how the PSD program will operate in the future.