United States Dismisses Fifth Circuit Luminant Appeal

Less than one month after Luminant Generation won its motion for rehearing en banc in United States v. Luminant Generation Co., the United States filed a motion to dismiss the appeal and, on August 9, 2019, the Fifth Circuit granted the request to dismiss.

ANALYSIS

The Fifth Circuit order dismissing the appeal notes only that it was made "pursuant to appellants' motion," which means that both the United States and Plaintiff-Intervenor Sierra Club agreed to the dismissal. The dismissal effectively brings to an end the United States' and Sierra Club's action to enforce the NSR program against Luminant's Big Brown Power Plant.

COMMENTARY

While the termination of the enforcement case is undoubtedly a relief to Luminant, the United States' decision to drop the appeal is more likely due to the perceived risks surrounding the statute of limitations issue rather than specific merits or demerits of the Big Brown permitting history. The district court had entered a broad decision limiting enforcement against wholly past violations, applying the statute of limitations from the date the violation first occurred, finding that the Clean Air Act PSD's program and the Texas regulations did not create a continuing violation, and then applying the concurrent remedies doctrine to bar the injunctive relief claims as well. In addition, the district court had held that the Clean Air Act did not grant injunctive relief authority for wholly past violations.

The Fifth Circuit panel decision had split, rejecting the contention that the Clean Air Act does not allow injunctive relief at all, but had split on the concurrent remedies issue, with two judges voting to partially upheld the concurrent remedies doctrine, allowing the United States' injunctive relief claims to proceed, but barring the Sierra Club's injunctive relief claims, and one judge dissenting. The dissenting judge would have held that the government's injunctive relief was actually a penalty and hence barred.

Faced with the grant of en banc review before the Fifth Circuit, which is often perceived as cautious and skeptical of wide-ranging government claims, and with the risk that it might lose both its penalty and injunctive relief authority in light of the unusual grant of en banc review, the United States may well have decided that the programmatic risk of a possible loss to the district court's or dissent's argument was too great. Sierra Clubs agreement to the dismissal suggests that it also saw risk.

On the merits of the issue, legal and policy issues point in multiple directions. While the panel decision seems to represent a reasonable compromise, it places a heavy, perhaps unsustainable, burden on the Congress to identify "every" statute affected by a statute of limitations and appears to place little weight on the purpose of a statute of limitations in the first place. Similarly, the dissent's concern that "injunctive" relief often looks like a penalty will ring true to those facing enforcement, but may look like appropriate mitigation to those injured by the alleged conduct.

One thing we do know: This issue will arise again. Stay tuned.