Neither Industry nor Environmental Groups Prevail in Fifth Circuit

On July 30, 2012, in Luminant, et al. v. Environmental Protection Agency, the United States Court of Appeals for the Fifth Circuit upheld the U.S. Environmental Protections Agency's (EPA) final rule which formally approved the portions of Texas' State Implementation Plan (SIP) that provided an affirmative defense for unplanned SSM events and disapproved the portions that provided an affirmative defense for planned SSM events. The Court's ruling denied petitions for review filed by both environmental and industry groups, regarding the EPA's partial approval and partial disapproval, as the Court determined the EPA did not act arbitrarily or contrary to law.

In January of 2006, the Texas Commission on Environmental Quality(TCEQ) submitted a SIP revision that created an affirmative defense against civil penalties for excess emissions during both planned and unplanned startup, shutdown, and maintenance/malfunction (SSM) events. The provisions in the Texas SIP at issue allow owners or operators to claim an affirmative defense to civil penalties if the owner or operator can prove each of the nine listed criteria, which specifically include: 1) that the periods of unauthorized emissions from SSM activity "could not have been prevented through planning and design;" 2) that the unauthorized emissions from SSM activities" were not part of a recurring pattern;" and 3) that the "unauthorized emissions did not cause to contribute to an exceedance of the[National Ambient Air Quality Standards] NAAQS." Environmental groups argued that approval of the affirmative defense for unplanned SSM events conflicted with the provisions of the Clean Air Act (CAA); likewise, industry groups argued that disapproval of the affirmative defense for planned SSM events was contrary to the law.

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