8th Circuit rejects enviro group challenge to S.D. coal plant

A federal appeals court yesterday upheld a decision to dismiss a Sierra Club challenge of a South Dakota coal plant, saying the lawsuit was filed too late.

The 8th U.S. Circuit Court of Appeals also ruled that because the company was operating under an air pollution permit that did not include provisions under U.S. EPA's Prevention of Significant Deterioration (PSD) program, it could not be sued for violating the program's rules -- even if the owner needed the stricter permit in the first place.

The court sided with Otter Tail Power Co. and rejected an appeal by the Sierra Club, which filed a lawsuit in 2008 against the company's Big Stone coal-fired power plant in eastern South Dakota.

The environmental group claimed the company made a series of modifications that should have triggered the tougher PSD requirements, which are intended to prevent facilities from making air quality any worse in a given area. Most recently, the plant started sending its steam to a new ethanol plant next door, leading to higher sulfur dioxide (SO2) and particulate emissions, the group said.

While the Sierra Club could be right in claiming the plant should have applied for the stricter permit when it made that change in 2001, the environmental group missed the five-year window to challenge the permitting process, Judge Diana Murphy wrote in her opinion for a unanimous three-judge panel.


"Where, as here, the operator never applied for any PSD permits, there is no application and no approval with which it can comply," Murphy wrote. "Thus, while Otter Tail may have violated [the Clean Air Act] by failing to apply for PSD permits in the first place, it does not continue to do so by failing to comply with a hypothetical set of operational parameters that would have been developed through the permitting process."

Murphy's opinion upholds a 2009 ruling from the U.S. District Court for the District of South Dakota, which also ruled that the Sierra Club was too late in filing its lawsuit.

The 8th Circuit agreed that Otter Tail only had an obligation to obtain a permit before building or modifying a facility. Because the company was operating under a permit that did not include PSD provisions, the program's conditions were not in effect, the court ruled.

"The interpretation Sierra Club urges would allow plaintiffs either to challenge permitting authorities' applicability determinations during the permit review process or to wait and raise the same issues in an enforcement action," Murphy wrote. "To allow plaintiffs to raise issues resolved during the permitting process long after that process is complete would upset the reasonable expectations of facility operators and undermine the significant investment of regulatory resources made by state permitting agencies."

Environmental groups have filed numerous legal challenges against the coal plant and a proposed expansion that was abandoned last year. Just after President Obama took office, EPA objected to the $1.6 billion expansion project, which would have added between 500 and 600 megawatts of capacity to the facility (Greenwire, Nov. 3, 2009).

Click here to read the ruling.

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