Opinion
CIVIL NO. 1:00CV01262
December 18, 2002
MEMORANDUM OPINION
On December 22, 2000, the United States filed a complaint alleging that Duke Energy made modifications to and operated eight electrical generating plants in North Carolina and South Carolina in violation of the Clean Air Act (the "Act"), 42 U.S.C. § 7401 et seq., specifically the Prevention of Significant Deterioration ("PSD") provisions of the Act, 42 U.S.C. § 7470-92, and also alleging violations of State Implementation Plans approved under the Act for the States of North Carolina and South Carolina. On October 18, 2002, the United States filed a motion for leave to amend its complaint, seeking to add four additional claims which allege that Duke Energy made modifications to four of its steam-generating units in violation of the New Source Performance Standards ("NSPS") of the Act, 42 U.S.C. § 74711.
This matter is before the court on the United States' motion for leave to amend its complaint. For the following reasons, the court will deny the United States' motion for leave to amend.
FACTS
The United States' original complaint filed on December 22, 2000, contains fifty-eight claims for relief. Duke Energy answered the complaint on March 12, 2001. On May 22, 2001, the parties submitted a Joint Rule 26(f) Report and Proposed Scheduling and Case Management Order, which was signed by the magistrate judge. The order set forth the dates by which all discovery matters should be concluded and the dates by which all motions for summary judgment were due. The original dates set forth in the case management order were subsequently extended on two occasions due to the parties' inability to complete discovery.
Discovery in this case has been lengthy and extensive. Discovery on the issue of liability began on May 24, 2001. During the course of discovery, Duke Energy has produced more than 2 million pages of documents, and the government has produced 2.6 million pages of documents. To complete its document production, Duke Energy organized approximately twenty lawyers and paralegals to search its eight coal-fired plants, which are the subject of the original complaint, its headquarters, and its archives and off-site document storage facilities. The government has 1100 federal employees who have spent in excess of 112,000 hours completing its document production. According to Duke Energy, the parties have taken more than forty-five depositions and have completed the designation of eighteen expert witnesses.
Pursuant to the magistrate judge's order of July 2, 2002, discovery on the issue of liability was scheduled to close on December 13, 2002. On October 18, 2002, less than sixty days before the close of discovery, the government filed a motion for leave to amend its complaint. The government seeks to add four additional claims, which allege that Duke Energy's modifications to four of its steam-generating units located at Duke Energy's Buck and Cliffside plants constituted "reconstruction" within the meaning of the NSPS.
"Reconstruction" is defined as the replacement of components of the facility to such an extent that "[t]he fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility." 40 C.F.R. § 60.15 (b). When the fifty percent threshold is crossed, the owner or operator is required to notify the Administrator of the EPA of the proposed replacement. 40 C.F.R. § 60.15 (d). The Administrator then determines whether the fifty percent threshold has been breached and whether compliance with the NSPS would be technologically and economically feasible. 40 C.F.R. § 60.15 (e).
DISCUSSION
Federal Rule of Civil Procedure 15 provides that leave to amend "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). The decision of whether to grant leave to amend is committed to the sound discretion of the district court and its decision will be reviewed only for an abuse of discretion. Foman v. Davis, 371 U.S. 178, 182 (1962);Gladhill v. General Motors Corp., 743 F.2d 1049, 1052 (4th Cir. 1984). In making this determination, the district court is to be guided by the general standards established by the Supreme Court.
If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. — the leave sought should, as the rules require, be `freely given.'Foman v. Davis, 371 U.S. at 182. "Under this standard prejudice resulting to the opponent by a grant of leave to amend is reason sufficient to deny amendment." Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980).
The government claims that the information produced during discovery reveals a strong basis for the allegation that Duke Energy crossed the fifty percent reconstruction threshold. It further claims that any information in Duke Energy's possession relevant to the application of the NSPS reconstruction rule is already within the scope of discovery on the PSD claims, and thus extensive discovery on the NSPS claims will not be necessary.
In its defense of the PSD claims, Duke Energy has taken the position that the modifications to its plants were routine maintenance, which are exempt from the PSD requirements. Duke Energy admits into it considered the cost of the modifications through the application of the fifty percent reconstruction rule in making its determination that the modifications were routine maintenance.
Duke Energy contends, however, that the government's proposed amended complaint will require more time-consuming discovery. Specifically, Duke Energy argues that it made no effort to identify or collect documents responsive to the government's proposed NSPS claims. Duke Energy believes it will take approximately four and a half months for it to complete discovery on these claims. Duke Energy further argues that expert discovery may also take more than four months to complete. Finally, Duke Energy asserts that because the depositions of fact witnesses for the PSD claims have taken fourteen months, it will be difficult to complete the depositions of witnesses for the NSPS claims in less than nine months.
The parties disagree as to the extent of the prejudice Duke Energy will experience as a result of the proposed addition of the NSPS claims. What is not disputed, however, is that additional discovery will be required. The government asserts that fact discovery on the new claims can be completed within four months of this court's order granting its motion for leave to amend the complaint. In addition, it asserts that the parties will meet and confer regarding other changes to the existing schedule, such as additional expert reports and expert depositions, and that the scheduled trial date of September 1, 2003, will be maintained.
The parties have already sought and been granted extensions of time to conduct discovery. On November 30, 2001, the parties requested a five-month extension of the discovery deadline. The magistrate judge granted that motion, but stated: "While the Court will grant the motion, the parties are advised that no further extensions of time will be granted." (Order entered Dec. 13, 2001.) If the court grants the government's motion, discovery will be extended, at a minimum, an additional four months.
Discovery was scheduled to be concluded by December 13, 2002. A briefing schedule for motions for summary judgment has also been set. Motions for summary judgment are due January 31, 2003, briefs in opposition are due March 31, 2003, and reply briefs are due April 30, 2003. Even accepting the government's proposed four-month extension to the discovery deadline, discovery will not be concluded until April or May. This extension will require that the briefing schedule for summary judgment be extended. If the September 1 trial date is to be maintained, the extension of the discovery deadline will mean that the parties have insufficient time to prepare motions for summary judgment and the court will have insufficient time to adequately consider those motions. If, however, the trial date is extended to afford adequate time to prepare and consider the summary judgment motions, Duke Energy will then be prejudiced by delaying resolution of this complex and expensive litigation.
Regardless of the amount of time required to conduct discovery on the NSPS claims, granting the government's motion will necessarily disrupt the trial schedule. See Gladhill, 743 F.2d at 1052 (stating that district court did not abuse its discretion in denying leave to amend where amendment would have disrupted the trial schedule). This trial date has already been extended due to the range and volume of the material produced during discovery and, at this late stage, with summary judgment motions due in less than two months, the court will not extend the trial date again. Therefore, the government's motion for leave to amend its complaint will be denied.
CONCLUSION
For the reasons set forth in this opinion, the court will deny the United States' motion for leave to amend the complaint.
An order in accordance with this memorandum opinion shall be entered contemporaneously herewith.