Opinion
IP 99-1692-C-M/F.
February 18, 2003
ORDER ON MOTION FOR SUMMARY JUDGMENT ON THE APPLICABLE LEGAL TEST FOR ROUTINE MAINTENANCE AND ON THIRTEEN AFFIRMATIVE DEFENSES
This matter is before the Court on plaintiff's, the United States (the "Government"), Motion for Summary Judgment on the Applicable Legal Test for Routine Maintenance and on Thirteen Affirmative Defenses (the "Motion"). The Government has brought an enforcement action under the Clean Air Act ("CAA"), 42 U.S.C. § 7401, et seq., against Defendant Southern Indiana Gas and Electric Company ("SIGECO"), alleging that SIGECO is in violation of various CAA provisions. In its Answer, SIGECO alleged twenty-three affirmative defenses, and the Government has moved for summary judgment on thirteen of those defenses in this Motion. The parties have fully briefed their arguments, and the motion is now ripe for ruling.
I. SUMMARY JUDGMENT STANDARD
The facts relevant to this Motion were set out in the Court's Order on SIGECO's Fair Notice Motion, and it is unnecessary for the Court to repeat them here.
As stated by the Supreme Court, summary judgment is not a disfavored procedural shortcut, but rather is an integral part of the federal rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). See also United Ass'n of Black Landscapers v. City of Milwaukee, 916 F.2d 1261, 1267-68 (7th Cir. 1990), cert. denied, 111 S.Ct. 1317 (1991). Motions for summary judgment are governed by Rule 56(c) of the Federal Rules of Civil Procedure, which provides in relevant part:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Once a party has made a properly-supported motion for summary judgment, the opposing party may not simply rest upon the pleadings but must instead submit evidentiary materials which "set forth specific facts showing that there is a genuine issue for trial." FED. R. CIV. P. 56(e). A genuine issue of material fact exists whenever "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The nonmoving party bears the burden of demonstrating that such a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Oliver v. Oshkosh Truck Corp., 96 F.3d 992, 997 (7th Cir. 1996), cert. denied, 520 U.S. 1116 (1997). It is not the duty of the Court to scour the record in search of evidence to defeat a motion for summary judgment; rather, the nonmoving party bears the responsibility of identifying the evidence upon which she relies. See Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir. 1996). When the moving party has met the standard of Rule 56, summary judgment is mandatory. See Celotex, 477 U.S. at 322-23; Shields Enters., Inc. v. First Chi. Corp., 975 F.2d 1290, 1294 (7th Cir. 1992).
In evaluating a motion for summary judgment, the Court should draw all reasonable inferences from undisputed facts in favor of the nonmoving party and should view the disputed evidence in the light most favorable to the nonmoving party. See Estate of Cole v. Fromm, 94 F.3d 254, 257 (7th Cir. 1996), cert. denied, 519 U.S. 1109 (1997). The mere existence of a factual dispute, by itself, is not sufficient to bar summary judgment. Only factual disputes that might affect the outcome of the suit in light of the substantive law will preclude summary judgment. See Anderson, 477 U.S. at 248; JPM Inc. v. John Deere Indus. Equip. Co., 94 F.3d 270, 273 (7th Cir. 1996). Irrelevant or unnecessary facts do not deter summary judgment, even when in dispute. See Clifton v. Schafer, 969 F.2d 278, 281 (7th Cir. 1992). "If the nonmoving party fails to establish the existence of an element essential to [its] case, one on which [it] would bear the burden of proof at trial, summary judgment must be granted to the moving party." Ortiz v. John O. Butler Co., 94 F.3d 1121, 1124 (7th Cir. 1996), cert. denied, 519 U.S. 1115 (1997).
II. DISCUSSION A. APPLICABLE LEGAL TEST FOR ROUTINE MAINTENANCE
The Court already has ruled on this issue in its Order on SIGECO's Motion for Summary Judgment on Fair Notice. In the Fair Notice Order, this Court concluded that the Environmental Protection Agency's ("EPA") current interpretation of routine maintenance is reasonable, and consistent with its past formulation of the test, which was delineated by the EPA in the Clay Memo in 1988. The EPA interprets the routine maintenance exemption in the following way:
This interpretation has three hallmarks. First, the exemption applies to a narrow range of activities, in keeping with EPA's limited authority to exempt activities from the Clean Air Act. Second, the exemption applies only to activities that are routine for a generating unit. The exemption does not turn on whether the activity is prevalent within the industry as a whole. Third, no activity is categorically exempt. EPA examines each activity on a case-by-case basis, looking at the nature and extent, purpose, frequency, and cost of the activity.
Pl.'s Opposition to Def.'s Motion for Summary Judgment on Fair Notice at 1. After considering the expertise of the EPA in implementing and interpreting the CAA, the persuasiveness of the interpretation, the interpretation's consistency with the text of exemption, the regulatory context in which the exemption is found, and the goals of the CAA, the Court concluded that EPA's interpretation was reasonable, and that it would be accorded deference in this action.
B. THIRTEEN AFFIRMATIVE DEFENSES
The Government also has moved for summary judgment on thirteen of SIGECO's affirmative defenses. Of the thirteen defenses the Government challenges, the following already have been decided in the Government's favor in other motions, and the issues are therefore moot:
1. Equitable Estoppel (the Fourth Defense). See Docket No. 318.
2. Fair Notice (Fifth Defense).
3. IDEM's Non-Applicability Determination (Eleventh Defense). See Docket No. 318.
4. Claims Barred Due to Privity Between IDEM and Government (Twelfth Defense). See Docket No. 318.
5. Violation of the Congressional Review of Agency Rulemaking Act (Twenty-Second Defense). See Docket No. 412.
Though the motion that led to Docket No. 318 did not specifically address privity, the Court generally rejected SIGECO's arguments that IDEM's non-applicability determination, due to the relationship between IDEM and EPA, precluded this enforcement action. See Docket No. 318. The privity arguments are indistinguishable from the arguments SIGECO made in that previous motion, the Court concludes that the privity defense is without merit for the same rationale stated in Docket No. 318. See Pl.'s Ex. 31 for the basis of SIGECO's privity defense.
With those five defenses already resolved, the Court must decide if the Government is entitled to summary judgment on the remaining eight defenses. Of the eight, two are equitable defenses: laches and waiver. The other six deal with SIGECO's claim that EPA changed its interpretation of routine maintenance for purposes of this litigation: violation of the Administrative Procedure Act, ultra vires administrative action, retroactive rulemaking, violation of the Federal Register Act, substantive due process, and arbitrary and capricious administrative action. Each defense will be addressed in turn.
1. Remaining Equitable Defenses
The Government has moved for summary judgment on SIGECO's laches (Third Defense) and waiver (Seventeenth Defense) defenses. Laches is an equitable doctrine that may cut off a plaintiff's right to sue if the plaintiff has delayed "too long" in suing. See Teamsters Employers Welfare Trust of Ill. v. Gorman Bros. Ready Mix, 283 F.3d 877, 880 (7th Cir. 2002). "`Too long' for this purpose means that the plaintiff delayed inexcusably and the defendant was harmed by the delay." Id. There is significant doubt about whether the doctrine of laches applies to actions initiated by the United States. See, e.g., United States Can Co. v. Nat'l Labor Relations Bd., 254 F.3d 626, 630 (7th Cir. 2001). See also Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 53 L.Ed.2d 402 (1977). One line of cases distinguishes between government suits enforcing private rights of action and suits where the government is acting as a sovereign in the public interest, concluding that laches is available in the former, but not in the latter. See United States v. Admin. Enters., Inc., 46 F.3d 670, 672 (7th Cir. 1995). Clearly, when enforcing the CAA, an act of "paramount importance" to the American public, United States v. Chevron, 757 F. Supp. 512, 515 (E.D.Pa. 1990), the United States acts in its capacity as a sovereign. Thus, many courts would hold at the outset that the defense of laches is barred in this suit. Other courts suggest that the defense should only be allowed against the government in egregious circumstances, circumstances that are not present in the instant action. See United States v. Lindberg Corp., 882 F.2d 1158, 1163 (7th Cir. 1989). Although Judge Posner observed that it "seems unlikely . . . that the doctrine [of laches] applies with undiminished force to all types of government suits," the existence and scope of the laches defense in government suits is an open question in the Seventh Circuit. See Admin. Enters., 46 F.3d at 672 (discussing the conflicting cases and considerations).
This question need not be explored to resolve the issue before the Court. Even if laches did apply with full force to government suits, SIGECO was not prejudiced by the delay, and prejudice is a threshold element for laches. If SIGECO's projects were in violation of the CAA, the violations began in 1991, 1992, and 1997 — and the Government filed suit in 1999. SIGECO has not complained that it has discarded any favorable evidence during that period. See Reich v. Sea Sprite Boat Co., 50 F.3d 413, 418 (7th Cir. 1995) (loss of favorable evidence during the delay is evidence of prejudice). Another plausible argument for prejudice is that the civil penalties mounted between 1991/1992/1997 and 1999 as the Government stood by without acting. However, the Seventh Circuit has rejected this argument: "The mounting penalties during periods of noncompliance is a response to unlawful conduct, not a form of `prejudice' that permits the wrongdoer to get away scot free." Reich, 50 F.3d at 418 (citation omitted). In its Response, SIGECO offers little resistance to the Government's arguments about laches, arguing instead that the Government's delay in bringing suit may have some bearing on the damages. However, the Court's previous ruling on the statute of limitations issue bars the Government from seeking monetary penalties for the 1991 and 1992 projects, and this makes it difficult for SIGECO to argue that it was prejudiced by the delay. See Docket No. 317. Because SIGECO has offered no evidence that it was prejudiced by the Government's delay in bringing suit, and the Court has not found evidence sufficient to support a finding of prejudice, the Court GRANTS the Government's Motion with respect to the laches defense.
Waiver is the voluntary and knowing relinquishment of a right or a claim. To establish waiver, "a clear and distinct manifestation of such an intent [to relinquish] must be found." Amer. Nat'l Bank and Trust Co. of Chicago v. K-Mart Corp., 717 F.2d 394, 398 (7th Cir. 1983). Generally speaking, rights may only be waived by those for whose benefit they were intended. Because of this rationale, it is doubtful that public officials at the EPA or DOJ have any authority to waive a claim under the CAA, which benefits the American populace. 28 Am.Jr.2d Estoppel and Waiver § 199 ("[P]ublic officers have no power or authority to waive the enforcement of the law on behalf of the public, and their acts in this respect are not binding on the public."). See also United States v. Amoco Oil Co., 580 F. Supp. 1042, 1050 (W.D.Mo. 1984) ("Nor in my judgment can any defense of waiver be asserted against the government in this kind of situation, since generally speaking public officers have no power or authority to waive the enforcement of the law on behalf of the public.").
Even if waiver can properly be asserted against the Government in the instant case, which is unlikely, SIGECO has made no showing that the Government intended to relinquish its right to bring a CAA enforcement action. Nor has the Court seen any evidence of a "clear and distinct manifestation of such an intent" in this case. Because the Court believes that waiver may not be asserted in an action brought by the government on behalf of the public, and because there is no evidence of an intentional relinquishment of the right to bring this action, the Court GRANTS the Government's Motion with respect to the waiver defense.
2. Defenses Asserting Deprivation of Constitutional or Statutory Right
The remaining defenses at issue in this Motion rest on SIGECO's assertion that EPA has created a "new" interpretation of routine maintenance for this litigation: violation of the Administrative Procedure Act, ultra vires administrative action, retroactive rulemaking, violation of the Federal Register Act, substantive due process, and arbitrary and capricious administrative action. In response to a Government interrogatory, SIGECO provided its arguments in support of these affirmative defenses. Pl.'s Ex. 31, Response to Interrogatory 13. In that interrogatory response, SIGECO makes the same arguments to support many of its defenses, and the Court has rejected most of the arguments in other orders.
With regard to the Administrative Procedure Act defense, SIGECO argues that the Government's legal theories in this action are "retroactive," that EPA's change in position in this case is a new rule, that EPA did not follow appropriate notice and comment procedures for this new rule, and that SIGECO's experts have testified that EPA is interpreting NSR in a novel way that "radically revises the policy determinations made by EPA in the past, which did not subject existing coal-fired power plants to PSD/NSPS requirements as a result of activities necessary to maintain reliability at such plants." Pl.'s Ex. 31 at 14. First, the Court has explained in other motions why it finds the testimony of SIGECO's cited experts (Joseph Cannon, Kenneth Schweers, James Schlesinger, and Walter Barber) to be irrelevant and unpersuasive. See, e.g., Order on Congressional Review of Agency Rulemaking, Docket No. 412. More importantly, the Court has rejected SIGECO's claim that EPA is advancing a "new" interpretation of routine maintenance in its Order on Fair Notice — the view of routine maintenance that EPA sets forth in this suit is consistent with the view EPA announced ten years earlier in the Clay Memo. To the extent that the arguments are based on a contention that NSR does not apply to existing facilities, this is not a tenable position — Congress explicitly made NSR applicable to modifications of existing sources. 42 U.S.C. § 7411(a)(2) (Congress defined "new source" as "Any stationary source, the construction or modification of which is commenced after the publication of regulations . . .") (emphasis added). If Congress intended for NSR to apply only to new sources built after the CAA Amendments and to have no effect on facilities already in existence, then it would not have included modifications within its definition of "new source." In its briefs on this Motion, SIGECO does not provide the Court will any new information about its Administrative Procedure Act defense. SIGECO only makes reference to the arguments it made in its Fair Notice Motion, and the Congressional Review of Agency Rulemaking Motion. Because the Court rejected those arguments and held that EPA has not created a new rule for purposes of this litigation, the Court GRANTS the Government's Motion for Summary Judgment with regard to the Administrative Procedure Act.
SIGECO's contentions in support of the ultra vires administrative action defense and the retroactive rulemaking defense are almost identical to the arguments it makes for the Administrative Procedure Act defense. Pl.'s Ex. 31 at 12-14. SIGECO's arguments center around its assertion that the EPA is advancing a new rule for the first time in this litigation. See id. As stated earlier, the Court already has decided that the EPA's stance in this enforcement action about routine maintenance and NSR does not constitute a new rule. SIGECO does not mention either of these defenses in its Response in Opposition to the Government's Motion. Accordingly, the Court GRANTS the Government's Motion for Summary Judgment with regard to the ultra vires administrative action defenses and the retroactive rulemaking defense.
SIGECO also maintains that this enforcement action and the claims of the Government are in violation of the Federal Register Act. Ans. ¶ 101, Twenty-first Defense. "The Federal Register Act establishes a process for maintaining the government's rules and regulations and for publishing them in the Federal Register." Kennecott Utah Copper Corp. v. United States Dept. of Interior, 88 F.3d 1191, 1205 (D.C. Cir. 1996). See 44 U.S.C. § 1501, et seq. The Government argues that this defense is based on SIGECO's assertions that EPA has advanced a new NSR rule in this enforcement action. The Government also contends that this Court does not have jurisdiction to determine whether or not EPA has complied with the Federal Register Act. SIGECO does not mount any specific opposition to these arguments, except to reference arguments it makes in other briefs. See Def.'s Memo in Opposition at 41. Although SIGECO would bear the burden of establishing this affirmative defense at trial, it fails to mention the Federal Register defense in its Memo in Opposition, and has not briefed the issue in other pending motions despite extensive discovery. Summary judgment is mandatory when a party completely fails to provide proof of a defense for which it bears the burden at trial. See Celotex, 477 U.S. at 322-24. See also Ortiz, 94 F.3d at 1124 ("If the nonmoving party fails to establish the existence of an element essential to [its] case, one on which [it] would bear the burden of proof at trial, summary judgment must be granted to the moving party."). Thus, the Court GRANTS the Government's Motion with respect to the Federal Register Defense.
In its Answer, SIGECO described its substantive due process defense this way: "The claims of the United States are barred, in whole or in part, by the Due Process Clause of the United States Constitution because substantive due process forbids the imposition of the United States' changing and unclear legal interpretations of the Clean Air Act, the New Source Review Program, PSD requirements or implementing regulations on SIGECO retroactively." Ans. ¶ 89. SIGECO's expands on this in its response to Interrogatory 13, Pl.'s Ex. 31 at 9, but generally makes the same arguments about EPA changing its interpretations of NSR rules, and also maintains that EPA is precluded from bringing this suit due to the 1998 NSR non-applicability determination by IDEM. As stated earlier, the Court considered and rejected the arguments about "new" EPA interpretations in its Order on the Fair Notice Motion. With regard to the arguments about the preclusive effect of the IDEM determination, the Court ruled for the Government on this issue in its Order on SIGECO's Motion for Partial Summary Judgment Regarding Unit 3
Refurbishment:
The plain language of § 7413 indicates that in such a situation the Government is not precluded from [bringing an enforcement action]. Indeed, that section's broad language provides that the Administrator can bring an action whenever it finds that any person has violated "any requirement or prohibition" of "an applicable implementation plan or permit." There is no language in the Act that precludes the Government from initiating an enforcement action if a source has already obtained a permit — or in this case, an applicability determination — from a state agency. Maybe there is a sound policy reason for providing such a safe harbor, but that decision must be left to Congress.
Doc. No. 318 at 8. If this case proceeds to the point where some penalty is imposed on SIGECO for CAA violations, the IDEM determination may have some bearing on the amount of this penalty, but it does not, as SIGECO asserts, have any preclusive effect on this litigation. Because all of the arguments SIGECO raises in support of its substantive due process defense have been decided against it in previous rulings, the Court GRANTS the Government's Motion for Summary Judgment on the substantive due process defense.
The arbitrary and capricious administrative action defense is another defense that SIGECO does not address in its Memo in Opposition despite the fact that it is at issue in this Motion. However, SIGECO made numerous arguments about the defense in response to a Government interrogatory. Pl.'s Ex. 31. First, SIGECO contends that EPA is advancing a new routine maintenance interpretation, that this action is an unjust application of NSR rules to existing facilities, that it is arbitrary and capricious for EPA to bring suit against SIGECO for smaller projects when it allowed larger projects to go on in the past, and that the action is precluded by the IDEM determination. Pl.'s Ex. 31 at 12. The Court considered and rejected these arguments in prior motions.
SIGECO also states, "EPA's interpretation of the NSR program is contrary to law and fact, since EPA's emission test is outcome-determinative (i.e. it yields emissions increases in every practical application), contrary to past EPA statements (and the Seventh Circuit's decision in WEPCO) and unreliable (since it shows "actual" emissions increases even in cases where the actual data shows no emissions increase)." Pl.'s Ex. 31 at 12. SIGECO's arguments about the emissions test being "unreliable" are unpersuasive — the Court has previously addressed the argument about why emissions must be determined by reviewing evidence of the projected post-project emissions increases, rather than by considering evidence of the actual post-project emissions data. See Docket No. 307. SIGECO's other argument about the "outcome-determinative" nature of EPA's test was not mentioned by SIGECO in its Memo in Opposition, nor was it addressed in any other motion before the Court. It is not the duty of the Court to scour the record in search of evidence to defeat a motion for summary judgment; rather, SIGECO's, as the nonmoving party, has the responsibility of identifying evidence upon which it relies. See Bombard, 92 F.3d at 562. Because all of SIGECO's arguments about its arbitrary and capricious defense are either unsupported or have already been decided against it, the Court GRANTS the Government's Motion for Summary Judgment with respect to that defense.
III. CONCLUSION
The EPA's reasonable interpretation of the routine maintenance exemption will apply in this action. A number of the affirmative defenses at issue in this Motion already have been decided in the Government's favor in previous orders. The majority of the arguments SIGECO makes in support of its remaining affirmative defenses were also rejected in other motions. Furthermore, SIGECO did not address a number of the defenses in its Memo in Opposition, other than to make reference to arguments made in other motions that the Court already has rejected. Accordingly, the Court GRANTS the Government's Motion for Summary Judgment on all thirteen defenses at issue in this Motion.