EPA Proposes To Strip Affirmative Defenses For Emergencies

The EPA has proposed to remove the affirmative defense provisions for emergencies in the state and federal operating permit programs. 81 Fed. Reg. 38645 (June 14, 2016). Specifically, EPA proposes to simply delete 40 CFR §70.6(g) and §71.6(g). As noted in more detail below, this proposed action is part of an ongoing effort to strip reasonable and long-standing defenses from the regulated community.

Under the currently existing rules, an emergency constitutes an affirmative defense to an action brought for noncompliance with technology-based emission limitations if certain conditions are met. Generally, an affirmative defense is one that, if proven, will defeat the allegations of a violation. In other words, if proven, there is no violation or non-compliance.

The burden of proof to establish the defense rests with the permittee, who must prove that an emergency occurred and that the permittee can identify the cause(s) of the emergency, the facility was being properly operated, reasonable steps were taken during the emergency to minimize levels of emissions that exceeded the emission standards, and notice of the emergency is submitted within two working days.

An emergency is any situation arising from sudden and reasonably unforeseeable events beyond the control of the source, including acts of God, which requires immediate corrective action to restore normal operation and that causes the source to exceed a technology-based emission limitation under the permit due to unavoidable increases in emissions attributable to the emergency. An emergency does not include noncompliance to the extent caused by improperly designed equipment, lack of preventative maintenance, careless or improper operation, or operator error. See §70.6(g) and §71.6(g).

EPA noted that these provisions have been part of the operating permit program since 1992. Over the years, it has approved numerous State Implementation Plans (SIPs) and state operating permits with these types of provisions. It has even issued numerous federal operating permits with these types of provisions. However, EPA now finds that “emergency affirmative defense provisions are not required program elements.” 81 Fed. Reg. at p. 38647. Indeed, the “provision has always been discretionary” because States were not obligated to include the §70.6(g) affirmative defense provision in their operating permit programs. Id.

To support the proposal, EPA relies on a recent decision from the D.C. Circuit and its pending State Implementation Plan (SIP) call regarding startup, shutdown, and malfunction (SSM) events.

EPA mainly relies on the D.C. Circuit’s decision in NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014). The case dealt with the National Emission Standards for Hazardous Air Pollutants (NESHAP) for Portland cement facilities, promulgated under CAA Section 112, which contained an affirmative defense for violations of emissions limits caused by malfunctions which sources could assert in civil enforcement proceedings. The affirmative defense in the Portland cement rule (formerly at 40 CFR §63.1344) specifically applied to malfunctions and stated that the defense could be asserted “in an action to enforce the standards” as a defense “to a claim for civil penalties.” 78 Fed. Reg. 10039 (Feb. 12, 2013). The court held that the affirmative defense provision exceeded EPA’s statutory authority because only the courts have the authority under the CAA to decide whether to assess penalties for violations in civil suits.

EPA “interprets the decision to be relevant to all similar affirmative defense provisions, such as those found in part 70 and part 71, that may interfere with the authority of courts to assess penalties or to impose other remedies authorized in CAA section 113(b) in civil enforcement suits.” 81 FR at p. 38648. The proposed rule, then, “seeks to ensure that the EPA’s part 70 and part 71 regulations are consistent with the enforcement structure of the CAA in accordance with the reasoning of the NRDC v. EPA decision.” Id.

EPA also cited and relied on its own the “SSM SIP Call.” 80 Fed. Reg. 33840 (June 12, 2015). EPA found that the SIP’s of 36 states were inadequate as they contained affirmative defense type provisions analogous to the ones in the state and federal operating permit programs. EPA relied on the NRDC decision in the SSM SIP Call, finding that the “logic” of the decision extends beyond CAA Section 112 to affirmative defenses in SIPs. 81 Fed. Reg. at p. 38648. As a result, EPA broadly stated in the SSM SIP Call that these types of provisions “are not appropriate under the CAA, no matter what type of event they apply to, what criteria they contain or what forms of remedy they purport to limit or eliminate.”  80 Fed. Reg. at p. 33851.

However, EPA does not explain in the preamble how or why stripping the affirmative defense creates consistency with the NRDC decision. The affirmative defense in the Portland cement rule specifically applied in civil suits to assess penalties. The affirmative defense in the state and federal permit programs contains no such language. Removing the defense in its entirety means that it cannot even be included in federal or state operating permits and can never be asserted in any administrative or civil action for compliance or penalties.

EPA’s rationale in this regard makes even less sense given the decision in the Fifth Circuit in Luminant Generation Co. LLC v. EPA, 714 F.3d 841 (5th Cir. 2013). Indeed, EPA even relied on Luminant in the Portland cement rule to support the affirmative defense in that rule. In Luminant, the court upheld EPA’s approval of Texas’s SIP as it related to unplanned SSM events. The defense in the Texas SIP only applied to unplanned SSM events that did not include ‘excessive emissions’ and only if nine designated criteria were met. Even then, injunctive relief was available. EPA approved the SIP because the defense was narrowly tailored and did not conflict with a court’s enforcement authority in civil suits. The court found this interpretation to be reasonable.

EPA envisions that the states will revise their operating programs to remove provisions similar to §70.6(g) and §71.6(g). EPA does not feel it is “appropriate for states to retain affirmative defense provisions within their approved part 70 programs.” 81 Fed. Reg. at p. 38652.  The provisions should be removed and the program revisions submitted to EPA “within 12 months after the final rule’s effective date.” Id. Permits containing similar provisions should be revised “in the ordinary course of business as the state issues new permits or reviews and revises existing permits.” Id.

The comment period on this proposed rule ends on August 15, 2016. EPA stated that it will hold a public hearing on the proposal “if anyone contacts the EPA requesting a public hearing on or before June 29, 2016.”  81 Fed. Reg. at p. 38645.

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