Special Topics in Environmental Management

What’s Going to Happen to the Affirmative Defense Within SIPs?

Affirmative defense provisions within state implementation plans (SIPs) have long been a controversial topic and the subject of litigation against the EPA.

Air pollution, pollutants, smokestacks

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On May 22, 2015, the EPA issued a SIP call to 36 states requiring them to remove affirmative defense provisions related to violations that occur during startup, shutdown, and other emergency situations from their SIPs under the Clean Air Act (CAA).

On January 7, 2020, the EPA administrator signed the final action to withdraw its SIP call for Texas, which allowed Texas to retain its affirmative defense provisions.

As a result of allowing Texas to retain its affirmative defense provisions, the Sierra Club and eight other petitioners filed suit against the EPA on April 7, 2020, in the D.C. Circuit Court.

The lawsuit challenges the “EPA’s plan to reopen the Startup, Shutdown, Malfunction (SSM) loopholes in Texas,” according to a news release posted on the Sierra Club’s website.

Texas, the EPA, and other industry-related entities have filed a motion to dismiss the suit, as well as a motion for a venue change to have it transferred to the 5th Circuit Court of Appeals.

On a basic level, these motions are about venue shopping—which court is more likely to give a party the answer it desires. Environmentalists want the D.C. Circuit Court to hear the case, which is where it’s past decision in National Resources Defense Council v. EPA sets important precedent. In that case, on December 18, 2014, the court concluded that “the emissions-related provisions of EPA’s 2013 Rule are permissible but that the affirmative defense for private civil suits exceeds EPA’s statutory authority.”

Texas and other industry-related entities want the case heard in the 5th Circuit, where the case setting precedent is Luminant Generation Co. v. EPA. In that case, as summarized in an article posted on the American College of Environmental Lawyers (ACOEL), the court concluded that the “EPA’s interpretation of the Clean Air Act (CAA) to allow affirmative defenses in CAA Section 110 SIPs was a permissible interpretation.”

In the petition, the environmentalists claim the “EPA is setting national policy regarding affirmative defenses and the EPA’s action regarding Texas’ SIP should be reviewed by the D.C. Circuit,” said Paul Seals, an environmental attorney based in Austin, Texas. “Texas responds that EPA’s action to withdraw of a single state from a SIP call issued to multiple states is locally or regionally applicable. Accordingly, the D.C. Circuit should have no jurisdiction to review EPA’s action.”

However, environmentalists seem to be taking a big gamble because if the D.C. Circuit decides to hear the case by determining that the EPA’s action is setting a national policy and rules affirmatively, the decision will open the door for the approval of other states’ affirmative defense SIP provisions.

One common area of misunderstanding about affirmative defense provisions in SIPs is that they create loopholes to emit more pollutants than allowed by national emissions standards. Seals says this is misleading. Any companies that think they can rely on the affirmative defense to excuse an emissions event should think twice, he said. It is not a defense for upset events that could have been avoided by better design, operation, and maintenance practices. It is not for cutting corners.

With an affirmative defense, the burden of proof is on the entity that had the emissions event. When there is evidence that the emissions event caused or contributed to an exceedance of the national ambient air quality standards or to a condition of air pollution, an affirmative defense is not an option. Before a company can utilize an affirmative defense in Texas for upset events, all 11 elements outlined in the Texas Administrative Code, Rule 101.222(b) must be met. The affirmative defense provisions are in place for nonexcessive, accidental emissions events during upset events and unplanned maintenance, startup, and shutdown activities.

Affirmative defense provisions do not relieve companies of liability when health, property, or human lives are jeopardized. These provisions, when applicable, do provide relief from Texas Commission on Environmental Quality (TCEQ) penalties when all criteria of the rule are met for a nonexcessive emissions event, Seals said.

“There are many paths to the temple,” Seals said. “The temple is clean air and clean water. Under Cooperative Federalism, which the EPA embraces, the EPA sets one path and each state is allowed some flexibility to make its own path to achieve the standards set by the EPA.”

This is why each state files a SIP for EPA approval. States can set tighter restrictions than the EPA regulations, but they cannot set regulations that fail to achieve EPA standards.

It will be interesting to see which direction the D.C. Circuit Court takes with this lawsuit. It could hear the case and uphold the Texas affirmative defense provisions, in which case, the Texas decision would likely become nationwide in scope and impact. Alternatively, the D.C. Circuit Court could dismiss the case or transfer it to the 5th Circuit Court, where prior approval of the Texas affirmative defense provisions by the EPA was previously upheld.