UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 1 of 15 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ) SIERRA CLUB ) 85 Second Street, 2 nd Floor ) San Francisco, CA 94105 ) ) VALLEY WATCH, INC. ) 800 Adams Avenue ) Evansville, IN 47713 ) ) Plaintiffs, ) CIVIL ACTION NO. ) v. ) ) LISA P. JACKSON, in her official capacity ) as Administrator, United States Environmental ) Protection Agency, ) Ariel Rios Building ) 1200 Pennsylvania Avenue, NW ) Washington, D.C. 20460, ) ) Defendant. ) ) COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF I. INTRODUCTION 1. Plaintiffs Sierra Club and Valley Watch ( Plaintiffs ) challenge the failure of Defendant, Lisa P. Jackson, in her official capacity as Administrator of the United States Environmental Protection Agency ( EPA ) to perform mandatory duties required by the Clean Air Act ( CAA ), 42 U.S.C. 7477. Specifically, the Clean Air Act establishes a mandatory duty on the EPA to prevent construction or modification of a major emitting facility in an attainment area with a state implementation plan ( SIP ) which does not meet the requirements of the Clean Air Act. EPA has failed to perform its duty to prevent construction of three proposed major sources of air pollution in Kentucky: East 1

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 2 of 15 Kentucky Power Cooperative s proposed J.K. Smith Generating Station coal-fired CFB Boiler Project ( Smith ), Conoco Phillips and Peabody s proposed Kentucky NewGas Synthetic Natural Gas Production plant ( NewGas ), and Erora Group s proposed coalfired Cash Creek Generating Station ( Cash Creek ). These three proposed facilities would be constructed in an attainment area under a SIP which EPA and the Kentucky Division for Air Quality have acknowledged does not meet Clear Air Act requirements. II. JURISDICTION, VENUE AND NOTICE 2. This action is brought pursuant to the Clean Air Act, 42. U.S.C. 7401, et seq. Thus, this Court has subject matter jurisdiction over the claims set forth in this complaint pursuant to 42 U.S.C. 7604(a)(2), which authorizes civil actions for EPA s failure to perform non-discretionary duties. This Court also has subject matter jurisdiction over this action pursuant to 28 U.S.C. 1331 (federal question). An actual controversy exists between the parties. This case does not concern federal taxes, is not a proceeding under 11 U.S.C. 505 or 1146, and does not involve the Tariff Act of 1930. Thus, this Court has authority to order the declaratory relief requested under 28 U.S.C. 2201. If the Court orders declaratory relief, 28 U.S.C. 2202 authorizes this Court to issue injunctive relief. 3. A substantial part of the alleged events or omissions giving rise to Plaintiffs claims occurred in the District of Columbia and the issues involved are nationally significant. In addition, Defendant Lisa P. Jackson officially resides in the District of Columbia. Plaintiff Sierra Club also maintains an office in the District of Columbia. Thus, venue is proper in this Court pursuant to 28 U.S.C. 1391(e). 2

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 3 of 15 4. On August 5, 2009, Sierra Club mailed a notice letter via certified mail, return receipt requested, to Defendant Lisa P. Jackson stating that Sierra Club intended to sue Defendant for failure to prevent construction of two major emitting facilities in an attainment area with a SIP that does not meet Clean Air Act requirements. 42 U.S.C. 7477. The notice letter referenced two proposed facilities: East Kentucky Power Cooperative s proposed J.K. Smith Generating Station CFB Boiler project ( Smith ) and ConocoPhillips and Peabody s proposed Kentucky NewGas Synthetic Natural Gas Production plant ( NewGas ). The certified mail return receipt was signed as received as of August 10, 2009. 5. On August 26, 2009, Sierra Club and Valley Watch mailed a second letter via certified mail, return receipt requested, to Defendant Lisa P. Jackson stating that Plaintiffs intended to sue Defendant for failure to prevent construction of three major emitting facilities in an attainment area with a SIP that does not meet Clean Air Act requirements. 42 U.S.C. 7477. In addition to Smith and NewGas, the second notice letter referenced the Erora Group s proposed Cash Creek Generating Station ( Cash Creek ). The certified mail return receipt was signed as received as of September 1, 2009. 6. More than sixty (60) days has passed since Defendant received both of Plaintiffs notice of intent to sue letters. Defendant has not remedied the violations alleged in this Complaint. Therefore, Plaintiffs have complied with the Clean Air Act notice requirements in 42 U.S.C. 7604(b). // // // 3

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 4 of 15 III. PARTIES 7. Plaintiff SIERRA CLUB is a nonprofit public-benefit corporation organized and existing under the laws of California with more than 700,000 members in the United States and with one or more chapters in every state. The Sierra Club s purpose includes to practice and to promote responsible use of the earth s ecosystem and resources; to enlist and to educate humanity to protect and to restore the quality of the natural and human environment, and to use all lawful means to carry out these objectives. Sierra Club activities include hiking, canoeing, caving, swimming, fishing, nature study, and advocacy for the improvement and protection of water quality and air quality across the state. 8. Plaintiff VALLEY WATCH, INC. is an Indiana "not-for-profit" corporation located in Evansville, IN whose mission is to "protect the public health and environment of the lower Ohio River Valley." Valley Watch seeks to protect the health of local citizens by scrutinizing new and existing sources of environmental and health impacting pollution in the region. The region Valley Watch serves is already the center of the largest concentration of coal plant capacity in the world and much of the region is already in violation of one or more of the National Ambient Air Quality Standards for criteria pollutants. 9. Sierra Club and Valley Watch members live, work, recreate and engage in economic activities in and around areas that are impacted or will be impacted by pollution emitted from the Smith, NewGas, and Cash Creek facilities and will continue to be impacted on a regular basis in the future. Because Kentucky s SIP does not comply with federal Clean Air Act requirements, and Defendant has not taken the necessary measures to prevent the 4

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 5 of 15 construction of the proposed facilities, Valley Watch and Sierra Club members cannot be certain that the facilities permits conform to the Clean Air Act s requirements. Valley Watch and Sierra Club s members do not believe that the facilities operating and construction permits conform with the requirements of the CAA. EPA s failure to prevent construction of the facilities prevents Valley Watch and Sierra Club s members from being certain that the Smith, NewGas, and Cash Creek permits protect them from exposure to illegal levels of pollutants emitted by the facilities. 10. The Smith, NewGas, and Cash Creek plants will emit large quantities of nitrogen oxides (NOx). Nitrogen oxides, in combination with other pollutants and sunlight, create ground-level ozone better known as smog which contributes to premature mortality, asthma, bronchitis, and other respiratory and cardiovascular illnesses. Ozone also damages crops and natural ecosystems. Nitrogen oxides also produce acid rain, which damages crops and other vegetation, historic structures such as statutes and grave stones, and acidifies lakes and streams. These ill effects can occur hundreds of miles away from the source. Nitrogen oxides also include nitrous oxide, which is a greenhouse gas contributing to the global climate crisis. 11. EPA s failure to take the necessary measures to prevent construction of the three facilities has caused, is causing, and unless this Court grants the requested relief, will continue to cause Plaintiffs concrete injuries, which are directly traceable to EPA s failure to act and will be redressed by EPA s action. 12. Defendant LISA P. JACKSON is sued in her official capacity as the Administrator of the EPA. She is charged in that role with taking various actions to implement and enforce the Clean Air Act, including the requirement to prevent the construction or modification 5

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 6 of 15 of a major emitting facility which are proposed to be constructed in an area which is not subject to an implementation plan which meets the requirements of the Clean Air Act. The Administrator of the EPA has the authority and ability to remedy the harm alleged in the complaint by providing the requested relief. IV. STATUTORY FRAMEWORK AND FACTUAL BACKGROUND 13. Congress enacted the Clean Air Act to speed up, expand, and intensify the war against air pollution in the United States with a view to assuring that the air we breathe throughout the Nation is wholesome once again. H.R.Rep. No. 1146, 91 st Cong., 2d Sess., 1970 U.S. Code Cong. & Admin. News 5356. 14. Towards this end, the Clean Air Act employs a model of cooperative federalism whereby EPA sets health-based National Ambient Air Quality Standards ( NAAQS ) and individual states develop plans, according to strict deadlines and guidelines, to comply with the NAAQS. States submit these State Implementation Plans ( SIP ) and SIP revisions to EPA. EPA reviews these submissions to ensure that the SIP or SIP revisions meet the minimum requirements of the Clean Air Act. If the submissions are satisfactory, EPA approves the plan or plan revision as part of the SIP. If the plans or plan revisions do not meet the Clean Air Act s minimum requirements or a State fails to submit a plan or a plan revision, then EPA must develop a Federal Implementation Plan ( FIP ) for the state to meet the minimum requirements of the Clean Air Act. 15. Attainment of the National Ambient Air Quality Standards, however, alone is insufficient to fully protect public health and welfare. To protect public health and welfare and to 6

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 7 of 15 prevent backsliding once standards have been achieved, the Clean Air Act requires that States continue to prevent significant deterioration in air quality. See 42 U.S.C. 7470. 16. Under the Prevention of Significant Deterioration (PSD) program, a major emitting facility must obtain a permit before it can be constructed. 42 U.S.C. 7475(a). The PSD permit ensures that, among other things, the application provides a comprehensive public assessment of the plant s impact on air quality, ensuring that air quality remains consistent with the Clean Air Act s National Ambient Air Quality Standards as well as various site specific ambient air quality standards, which are referred to as increments. 17. Once issued, the PSD permit is permanent and remains valid for the life of the facility. Typically, coal-fired power plants last for sixty years or more and Smith, Cash Creek, and NewGas and should have a similar life expectancy. See United States v. Duke Energy Corp., 411 F.3d 539, 544 (4th Cir. 2005), vacated on other grounds, 549 U.S. 561 (2007) (noting that some coal plants currently operating in North Carolina were placed in service in 1940). 18. On July 18, 1997, EPA issued new, stricter 8-hour NAAQS for ozone and fine particulate matter. 19. On November 29, 2005, EPA published the final rule implementing the new 8-hour ozone standards and amended federal regulations for the Prevention of Significant Deterioration ( PSD ) program to mandate that nitrogen oxides (NOx) must be an ozone precursor in attainment areas. 70 Fed. Reg. 71,612, 71,679 (Nov. 29, 2005). 20. An attainment area is one that meets the national primary and secondary ambient air quality standard for a specified pollutant. 42 U.S.C. 7407(d)(ii). 7

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 8 of 15 21. The NewGas plant is proposed to be located in Muhlenberg County, Kentucky, which is designated as an attainment area for the 1997 ozone NAAQS. 22. The Smith plant is proposed to be located in Clark County, Kentucky, which is designated an attainment area for the 1997 ozone NAAQS. 23. The Cash Creek plant is proposed to be located in Henderson County, Kentucky, which is designated an attainment area for the 1997 ozone NAAQS. 24. Section 110(a)(1) of the Clean Air Act requires States to submit new SIPs that provide for implementation of a new or revised NAAQS within three years after promulgation of new NAAQS, or within a shorter time-period if EPA so prescribes. 42 U.S.C 7410 (a)(1). EPA expressly directed the states to submit SIP provisions incorporating the new NAAQS and revised PSD regulations for ozone and fine particulate matter no later than June 15, 2007. 70 Fed. Reg. at 71,683. 25. Kentucky s SIP has never been amended to incorporate NOx as a precursor to ozone under the PSD program. 26. EPA found that Kentucky submitted an administratively complete infrastructure SIP for the 1997 ozone NAAQS. 73 Fed. Reg. 16205, 16208 (March 27, 2008). At this time, however, EPA had not made a final determination that the updated SIP complies with the Clean Air Act. 27. Kentucky s SIP PSD program only requires major sources of volatile organic compounds (VOCs) to conduct ambient monitoring and impact analysis for ozone. See 401 KAR 51:017 7(5)(a); 51:001 (1)(222)(a). By contrast, EPA regulations mandate that SIP PSD programs require that major sources conduct ozone analysis for major sources of either VOCs or NOx. 40 C.F.R. 51.166(b)(23); 52.21(b)(23) (significance threshold 8

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 9 of 15 for ozone are sources that emit over 40 tons per year of VOCs or NOx); 40 C.F.R. 51.166(b)(1)(ii); 52.21(b)(1)(ii) (a major source of VOCs or NOx is major for ozone); 40 C.F.R. 52.21(1)(5)(i), n. 1 & 51.166(1)(5)(i), n. 1 (emissions of 100 tons per year of NOx or VOCs requires ambient impacts analysis for ozone). 28. For each of the above reasons, Kentucky s SIP fails to meet the requirements of the Clean Air Act PSD program. 29. After Plaintiffs copied the state on its notice of its intent to sue, Kentucky acknowledged that its current rules fail to meet the requirements of the Clean Air Act by proposing new regulations that would change state rules to require NOx as an ozone precursor. However, these changes have not yet been incorporated into the Kentucky SIP. The current version of the SIP is the legally applicable one, even if a proposed change is pending. See General Motors Corp. v. U.S., 496 U.S. 530, 540-41 (1990). 30. After Plaintiffs sent EPA its notice of its intent to sue, EPA notified Kentucky that a notice of deficiency of the SIP would be issued if Kentucky did not amend its current regulations. 31. Until Kentucky s SIP is officially updated and fully in compliance with Clean Air Act regulations, EPA will continue to be in violation of its mandatory duties under Section 167 with regards to Smith, NewGas, and Cash Creek. 32. Furthermore, until Kentucky s SIP is officially updated and fully in compliance with the Clean Air Act regulations, any provision regarding ozone in the Smith, NewGas and Cash Creek Title V permits may not be federally reviewable and/or enforceable. 33. Class I areas are wilderness and national parks given special protection under the Clean Air Act. See 42 U.S.C. 7472(a). EPA regulations require that SIPs contain provisions to 9

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 10 of 15 notify the public of the degree that a new source or modification of air pollution will impact site specific air quality standards. 40 CFR 51.166(q)(2)(iii). These site specific air quality standards are referred to as increments in Clean Air Act jargon. 34. The Clean Air Act s PSD program requires public notice of the amount of increment consumed in Class I areas to be given in those areas. See In the Matter of Hadson Power 14- Buena Vista, 4 E.A.D. 258, 272 (E.A.B. 1992). The state of Kentucky has erroneously interpreted the notice requirement in its SIP as not requiring notice in the Class I areas.. See Envtl. and Pub. Prot. Cabinet v. Sierra Club, No. 2007-CA 001723- MR (Ky. App. 2008) (only requiring notice of Class I increment consumption in the county where the source is proposed). 35. At least three new proposed major sources of air pollution in Kentucky, Smith, NewGas, and Cash Creek, have taken advantage of these two defects in Kentucky s SIP. The proposed sources are major sources of NOx, but not VOCs, so their air permit applications do not contain modeling analysis and pre- and post-construction monitoring to ensure for compliance with the 1997 ozone NAAQS. 36. The Kentucky Division for Air Quality also did not publish public notice of increment consumption for Smith, NewGas, and Cash Creek in nearby Class I areas. 37. Section 167 of the Clean Air Act imposes a mandatory duty on the EPA to prevent construction of a major emitting facility in an attainment area with a State Implementation Plan which does not meet the requirements of the Clean Air Act. 42 U.S.C. 7477 ( The Administrator shall, and a State may, take such measures, including issuance of an order, or seeking injunctive relief, as necessary to prevent the construction or modification of a major emitting facility which does not conform to the requirements 10

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 11 of 15 of this part, or which is proposed to be constructed in any area designated pursuant to section 7407(d) of this title as attainment or unclassifiable and which is not subject to an implementation plan which meets the requirements of this part. ) 38. EPA has failed to perform its duty to prevent construction of three proposed major sources of air pollution in Kentucky that are proposed to be constructed in an attainment area under a State Implementation Plan that does not meet the requirements of the Clean Air Act. 39. In order to prevent construction under Section 167, EPA is required to act before a PSD permit is issued. Construction can begin immediately once a PSD permit is issued, and the permit is permanent and never expires. 40. East Kentucky Power Cooperative s proposed Smith project, ConocoPhillips and Peabody s proposed NewGas plant, and Erora Group s proposed Cash Creek Generating Station are proposed to be constructed in an ozone attainment area under a SIP which does not meet the requirements of the Clean Air Act. As explained above, Kentucky s SIP fails to meet two important requirements of the Clean Air Act s prevention of Significant Deterioration program: 1) it does not require major sources of nitrogen oxides (NOx) to demonstrate that they will not cause or contribute to a violation of the ozone national Ambient Air Quality Standards; and 2) it does not require public notice of increment consumption in all Class 1 areas. These three new proposed major sources of air pollution in Kentucky have taken advantage of these defects in Kentucky s SIP. 41. The Cash Creek facility received a final air permit from Kentucky Division for Air Quality authorizing construction in January 2008. The applicant submitted a significant revision permit application that was deemed administratively complete on November 25, 11

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 12 of 15 2008. The revised permit will be issued as a new permit. Once the new permit is issued, the existing permit will be nullified. Kentucky Division for Air Quality, Cash Creek Statement of Basis, Permit: V-09-006 (July 29, 2009). V. CLAIMS FOR RELIEF FIRST CLAIM FOR RELIEF FAILURE TO PREVENT CONSTRUCTION OF SMITH (CAA 42 U.S.C. 7477) 42. Each allegation set forth in the complaint is incorporated herein by reference. 43. EPA has a mandatory duty to prevent construction of a proposed major emitting facility in an attainment area with a State Implementation Plan which does not meet the requirements of the Clean Air Act. 42 U.S.C. 7477. 44. Smith is a proposed major emitting facility in an ozone attainment area with a State Implementation Plan which does not meet the requirements of the Clean Air Act. 45. Defendant has not taken actions to prevent construction of the proposed Smith plant. 46. Defendant s failure to take actions to prevent construction of Smith constitutes a failure to perform an act or duty that is not discretionary with Defendant within the meaning of Clean Air Act 304(a)(2). 42 U.S.C. 7604(a)(2). 47. Therefore, EPA has violated and remains in violation of, its non-discretionary duty to prevent construction of a proposed major emitting facility in an attainment area with a State Implementation Plan that does not meet the requirements of the Clean Air Act, as required by 42 U.S.C. 7477. 12

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 13 of 15 SECOND CLAIM FOR RELIEF FAILURE TO PREVENT CONSTRUCTION OF NEWGAS (CAA 42 U.S.C. 7477) 48. Each allegation set forth in the complaint is incorporated herein by reference. 49. EPA has a mandatory duty to prevent construction of a proposed major emitting facility in an attainment area with a State Implementation Plan which does not meet the requirements of the Clean Air Act. 42 U.S.C. 7477. 50. NewGas is a proposed major emitting facility in an ozone attainment area with a State Implementation Plan which does not meet the requirements of the Clean Air Act. 51. Defendant has not taken actions to prevent construction of the proposed NewGas plant. 52. Defendant s failure to take actions to prevent construction of NewGas constitutes a failure to perform an act or duty that is not discretionary with Defendant within the meaning of Clean Air Act 304(a)(2). 42 U.S.C. 7604(a)(2). 53. Therefore, EPA has violated and remains in violation of, its non-discretionary duty to prevent construction of a proposed major emitting facility in an attainment area with a State Implementation Plan that does not meet the requirements of the Clean Air Act, as required by 42 U.S.C. 7477. THIRD CLAIM FOR RELIEF FAILURE TO PREVENT CONSTRUCTION OF CASH CREEK (CAA 42 U.S.C. 7477) 54. Each allegation set forth in the complaint is incorporated herein by reference. 13

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 14 of 15 55. EPA has a mandatory duty to prevent construction of a proposed major emitting facility in an attainment area with a State Implementation Plan which does not meet the requirements of the Clean Air Act. 42 U.S.C. 7477. 56. Cash Creek is a proposed major emitting facility in an ozone attainment area with a State Implementation Plan which does not meet the requirements of the Clean Air Act. 57. Cash Creek is authorized to begin construction immediately. 58. Defendant has not taken actions to prevent construction of the proposed Cash Creek plant. 59. Defendant s failure to take actions to prevent construction of Cash Creek constitutes a failure to perform an act or duty that is not discretionary with Defendant within the meaning of Clean Air Act 304(a)(2). 42 U.S.C. 7604(a)(2). 60. Therefore, EPA has violated and remains in violation of, its non-discretionary duty to prevent construction of a proposed major emitting facility in an attainment area with a State Implementation Plan that does not meet the requirements of the Clean Air Act, as required by 42 U.S.C. 7477. PRAYER FOR RELIEF WHEREFORE, Plaintiffs respectfully request that this Court grant the following relief: [A] Declare that Defendant s failure to prevent construction of Smith, NewGas, and Cash Creek constitutes a failure to perform an act or duty that is not discretionary with Defendant within the meaning of 42 U.S.C. 7604(a)(2); [B] Order Defendant to immediately take measures as necessary to prevent construction of the Smith, NewGas and Cash Creek proposed major sources of air 14

Case 1:09-cv-02089-ESH Document 1 Filed 11/04/2009 Page 15 of 15 pollution until such time as the Kentucky SIP meets the requirements of the Clean Air Act [C] [D] Retain jurisdiction of this action to ensure compliance with the Court s Order; Award Plaintiffs the costs of litigation, including reasonable attorney s fees and costs; and [E] Grant such other relief as the Court deems just and proper. Respectfully submitted, /s / Robert Ukeiley Robert Ukeiley Law Office of Robert Ukeiley 435 R Chestnut Street, Suite 1 Berea, KY 40403 Tel: (859) 986-5402 Fax: (866) 618-1017 E-mail: rukeiley@igc.org Counsel for Sierra Club Andrea Issod Staff Attorney Sierra Club Environmental Law Program 85 Second St, 2 nd Floor San Francisco, CA 94105 CA Bar # 203920 (pro hac vice application forthcoming) Tel: 415-977-5544 Fax: 415-977-5793 andrea.issod@sierraclub.org David C. Bender McGillivray Westerberg & Bender LLC 305 S. Paterson St. Madison, WI 53703 Tel. 608.310.3560 Fax 608.310.3561 bender@mwbattorneys.com Dated: November 4, 2009 15