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Conservation Law Foundation v. Public Service Co.

United States District Court, First Circuit

December 4, 2013

Conservation Law Foundation,
Public Service Company of New Hampshire. Opinion No. 2013 DNH 167


JOSEPH N. LAPLANTE, District Judge.

When one statute or regulation incorporates another by reference, what version of the referenced provision does it incorporate: the version in effect at the time of enactment, or the version in effect at the time of invocation-amendments and all? That question is central to this case, a citizen suit brought by the Conservation Law Foundation ("CLF") under the Clean Air Act ("CAA"), 42 U.S.C. § 7401 et seq. CLF alleges that the defendant, Public Service Company of New Hampshire ("PSNH"), has violated the CAA by operating Merrimack Station, a coal-fired power plant in Bow, New Hampshire, without the necessary permits. More specifically, CLF alleges that PSNH, both prior to and since making changes to the plant in 2008 and 2009 (which the parties refer to collectively as the "turbine projects"), failed to obtain permits required under the state and federal regulations that implement the CAA's "New Source Review" program.

This court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331 (federal question) and 42 U.S.C. § 7604(a) (CAA). PSNH has moved to dismiss Counts 1-4 of CLF's complaint for failure to state a claim upon which relief can be granted.[1] See Fed.R.Civ.P. 12(b)(6). Its primary argument is that the EPA's implementing regulations for the New Source Review program, as amended in 2002, did not require it to obtain permits in connection with the turbine projects. CLF, it hardly need be said, disagrees with PSNH, both as to the applicability of the post-2002 regulations (which, CLF argues, did not apply in New Hampshire at the time of the turbine projects) and their interpretation. The parties' briefing on these topics has been supplemented by amicus briefs submitted by the United States (which supports CLF's position) and the Utility Air Regulatory Group (which describes itself as an "unincorporated trade association of individual electric utilities and national industry trade associations" and whose briefs support PSNH's position).

Because the interpretation of the post-2002 regulations was also at issue in a case pending before the Court of Appeals for the Sixth Circuit, this court refrained from ruling on PSNH's motion until that court rendered its decision. See Order of Sept. 4, 2012. The Sixth Circuit issued its opinion on March 28, 2013, see United States v. DTE Energy Co. , 711 F.3d 643 (6th Cir. 2013), and later that same day this court invited the parties "to submit additional briefing regarding the import of the Sixth Circuit's decision to the defendant's motion, " which they did. CLF also filed a motion urging this court to defer consideration of the motion to dismiss until it had resolved CLF's anticipated motion to amend the complaint. See Fed.R.Civ.P. 15.

Over PSNH's objection, the court granted CLF's request. As expected, CLF then moved to amend the complaint to add new allegations to Counts 1 and 3 and to include a claim that PSNH's "turbine projects also violated a provision of the Act that is separate and distinct from the provisions at issue in the original Complaint"-the "New Source Performance Standards" established by 42 U.S.C. § 7411. PSNH has filed an opposition to that motion, arguing that CLF unduly delayed filing its proposed amendments, and that they should be denied as futile in any event because of CLF's deficient notice of intent to sue. See id. § 7604(b)(1)(A) (requiring pre-suit notice of citizen suit).

After hearing oral argument from the parties and amici, the court denies PSNH's motion to dismiss and grants CLF's motion to amend. As already mentioned, the foundation upon which PSNH's primary argument for dismissal rests is the notion that the turbine projects were subject to the New Source Review permitting framework established by the 2002 amendments to the CAA's federal implementing regulations, and that the regulations as amended did not impose any obligation on PSNH to obtain permits in connection with the projects. That foundation cannot bear weight: New Hampshire's Department of Environmental Services, which is tasked with implementing the CAA in this state, had not adopted those amendments into state law at the time of the turbine projects. In its reply memorandum, PSNH attempts to salvage its motion by arguing that the complaint also fails to state a claim under the version of the regulations that actually applied in New Hampshire at the time of the projects (an argument it also advanced with vigor at oral argument). That belated argument, however, is insufficiently developed, and the court will not address it at this time. PSNH's motion accordingly fails.

PSNH's opposition to CLF's motion to amend suffers the same fate. This case is still in its early stages-PSNH, as a result of its Rule 12 motion practice, has not even had to file an answer-so PSNH's accusation of unreasonable delay on CLF's part rings hollow. And, contrary to PSNH's argument, CLF's notice of intent to sue provided PSNH all the information about the alleged violation required under federal law.

I. Applicable legal standard

To survive a motion to dismiss under Rule 12(b)(6), the plaintiff's complaint must allege facts sufficient to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). In ruling on such a motion, the court must accept as true all well-pleaded facts set forth in the complaint and must draw all reasonable inferences in the plaintiff's favor. See, e.g., Martino v. Forward Air, Inc. , 609 F.3d 1, 2 (1st Cir. 2010). The court "may consider not only the complaint but also facts extractable from documentation annexed to or incorporated by reference in the complaint and matters susceptible to judicial notice." Rederford v. U.S. Airways, Inc. , 589 F.3d 30, 35 (1st Cir. 2009). With the facts so construed, "questions of law [are] ripe for resolution at the pleadings stage." Simmons v. Galvin , 575 F.3d 24, 30 (1st Cir. 2009). The following background summary adopts that approach.

II. Background

The facts underlying this case, at least as far as they are relevant to PSNH's motion to dismiss, are uncomplicated.[2] PSNH operates plants that generate electricity in several locations in New Hampshire, including Merrimack Station in Bow. Merrimack Station, which consists of two units dubbed "MK1" (in operation since 1960) and "MK2" (in operation since 1968), generates power by burning coal. In addition to generating power, this process emits pollutants, including nitrogen oxide (NOx), sulfur dioxide (SO2), and carbon dioxide (CO2), into the air. Merrimack Station is the single largest point source of CO2 in New Hampshire.

In recent years, PSNH has made several renovations to the plant. In 2008, it replaced a steam turbine in MK2. At the same time, it also replaced, installed, or modified related equipment in MK2 in order to increase turbine efficiency, increase output, and reduce maintenance outages. CLF alleges that, while these alterations enabled additional generation capacity-and while PSNH's own projections indicated that they would cause annual NOx emissions to increase by 334 tons per year-PSNH did not obtain any permits prior to making them. And, in late 2009, PSNH shut down MK2 for a period of about four months to make additional alterations to the turbine and its associated equipment. CLF alleges once again that, while these later changes enabled additional generation capacity and, by PSNH's projections, would again result in increased NOx emissions, PSNH did not obtain any permits prior to making them. Nor, CLF alleges, has PSNH obtained the appropriate permits since that time.

In April 2011, CLF provided PSNH with a notice of its intent to file a citizen suit under the CAA, asserting that (among other things) PSNH's failure to obtain the permits in question violated the CAA and its implementing regulations. See 42 U.S.C. § 7604(b); 40 C.F.R. § 54.3. It also sent copies of the notice to the Environmental Protection Agency, the New Hampshire Department of Environmental Services, and the governor of New Hampshire, as required by the CAA. See 42 U.S.C. § 7604(b). None of those entities commenced an enforcement action to redress the alleged violations detailed in CLF's notice, and PSNH did not cease or remedy them. Thus, on July 21, 2011, CLF filed this action.

III. Analysis

A. PSNH's motion to ...

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