Last week, the 10th Circuit Court of Appeals affirmed dismissal of a Sierra Club citizen suit against a coal-fired power plant for an alleged permitting violation of the Clean Air Act, finding that the Sierra Club’s claims were time-barred. In the case, Sierra Club v. Okla. Gas & Elec. Co., No. 14-7065 (10th Cir. March 8, 2016), the court held that the Sierra Club’s claims for civil penalties were statutorily time-barred because they were brought more than five years after the power plant began its unpermitted modification of a boiler, an action which the Sierra Club claims violated the Prevention of Significant Deterioration (PSD) program under the Clean Air Act. The court also affirmed dismissal of the group’s claims for injunctive and declaratory relief because those legal claims were predicated on the same facts as the time-barred civil penalties. The court’s interpretation of the statute of limitations as applied to the PSD program is consistent with a 2011 district court decision in the 3rd Circuit, United States v. EME Homer City Generation L.P., et al., which we reported on here.
According to the Sierra Club’s complaint, the Oklahoma Gas and Electric Company (OG&E) modified a boiler at its coal-fired power plant in Muskogee, Oklahoma without first obtaining an emission-regulating permit required by the Clean Air Act’s PSD program, which seeks to protect air quality from significant deterioration caused by new emissions. While modification of the boiler began sometime in March 2008 and ended in April 2008, the Sierra Club did not bring its lawsuit until 2013. Because the Clean Air Act does not specify a statute of limitations for bringing a citizen suit for civil penalties, the default five-year statute of limitations for civil penalties, fines and forfeitures under federal law applies. Prior to litigation, the parties had entered into an agreement which tolled the statute of limitations effective April 1, 2013, and agreed that any penalties originating prior to April 1, 2008 – five years prior to the tolling agreement – were time barred. Thus, the court was left with the question of whether the Sierra Club could maintain a claim for penalties originating on or after April 1, 2008, which was after OG&E began construction on the boiler.
The majority of the three judge panel agreed with the district court’s decision that the claims were time-barred because they were brought more than five-years after OG&E began modification on the boiler. In its reasoning, the majority noted that the statute of limitations at issue begins to run when a claim “first accrues,” which the majority found is when the plaintiff can file suit and obtain relief. Thus, because the Sierra Club could have brought suit for the PSD permit violation on the very first day OG&E began modifying the boiler (sometime in March 2008), the cause of action accrued prior to April 1, 2008, even if the violation continued until some later date.
In holding that the statute of limitations was triggered on the day the modification began, the court rejected the Sierra Club’s argument that the alleged violation should be treated as either (1) a new, discrete violation on each day of the unpermitted modification (a “repeated violations” theory), or (2) a single violation that continued until construction was completed (a “continued violation” theory). Sierra club argued that under either of these theories, the statute of limitations does not begin to run until the modification is complete. In rejecting these arguments, the court reasoned that the modification can be best characterized a single course of conduct and that even if the modification were considered a continuing violation, the claim still first accrued on the day modification began.
Finally, the court held that the group’s claims for injunctive and declaratory relief were barred under the concurrent remedy doctrine, which prohibits equitable claims “when the jurisdiction of the federal court is concurrent with that at law, or the suit is brought in aid of a legal right.” Thus, the court found the equitable claims were precluded because they were based on the very same facts as the time-barred claim for civil penalties.
The lone dissenting judge on the panel argued that the majority conflated the date on which the claim first accrued with a complete bar on the tolling doctrines, which, if applied, would have extended the timeliness of the claim. The dissent noted that the case presented the following issue of first impression for all the circuits: “Is the statute of limitations for an unpermitted construction or modification in violation of the PSD program tolled so long as the construction of medication continues?” The dissent answered in the affirmative, arguing that tolling the statute of limitations in this instance would have served the purposes of the Clean Air Act without undermining the purpose of the statute of limitations.
In any event, the case serves a reminder to parties on both sides of litigation to consider not only the duration of a statute of limitations, but to also carefully consider when the statute of limitations is actually triggered and whether it can be tolled.