United States v. Denka Performance Elastomer, LLC

1

UNITED STATES OF AMERICA v. DENKA PERFORMANCE ELASTOMER, LLC and DUPONT SPECIALTY PRODUCTS USA, LLC CIVIL ACTION

Civil Action No. 23-735

United States District Court, E.D. Louisiana

August 30, 2023

SECTION “J” (5)

ORDER & REASONS

CARL J. BARBIER UNITED STATES DISTRICT JUDGE

Before the Court is a Motion to Dismiss Denka Performance Elastomer LLC's Counterclaims and First Six Affirmative Defenses for Lack of Subject Matter Jurisdiction (Rec. Doc. 57), filed by the United States of America (“the United States” or “the EPA”) and an opposition filed by Denka Performance Elastomer, LLC (“Denka”) (Rec. Doc. 66). Having considered the motions and legal memoranda, the record, and the applicable law, the Court finds that the motion should be GRANTED.

FACTS AND PROCEDURAL BACKGROUND

Denka Performance Elastomer, LLC owns and operates a neoprene manufacturing facility in St. John the Baptist Parish. The United States of America has sued Denka, arguing that the chloroprene emissions from the facility constitute an imminent danger to public health in the surrounding communities under Section 303 of the Clean Air Act. The United States argues that the Denka facility is emitting chloroprene, a known carcinogen, in excess of 0.2 micrograms per cubic meter of air (“0.2 yg/m3”) thereby endangering the health of the individuals living near the facility. This 0.2 yg/m3 figure is derived from the EPA's 2010 Toxicological Review of Chloroprene (‘2010 Review” or “Review”)^[1] which was published in the Integrated Risk Information System (“IRIS”) database. The IRIS is a database which contains “hundreds of scientific reports developed by EPA's Center for Public Health and Environmental Assessment (“Center”) that reflect EPA's assessment of the dose response information and human health hazard posed by oral and inhalation exposure to individual chemicals groups of chemicals and complex mixtures.” (Rec. Doc. 57, at 15). Denka attempted to challenge this figure administratively in June 2017 and in July 2021, and the EPA denied both challenges as well as an administrative petition seeking reconsideration of the second denial (“Denials”).

Having exhausted its administrative remedies, Denka then filed a separate suit against the United States in this Court challenging the EPA's 2010 Review and the EPA's subsequent Denials of Denka's administrative challenges to this Review under the Administrative Procedure Act (“APA”). See Denka Performance Elastomer LLC v. EPA, No. 23-147 (E.D. La.). The United States moved to dismiss that case for lack of subject matter jurisdiction, and on the day its response was due, Denka chose to voluntarily dismiss its case, stating that its counterclaims in the instant matter were nearly identical to the claims they were voluntarily dismissing. (No. 23-147, Rec. Doc. 30, at 2). The United States has now moved to dismiss these counterclaims and Denka's first six affirmative defenses for lack of subject matter jurisdiction for the nearly identical reasons it moved for dismissal of Denka's claims in the related action.

LEGAL STANDARDS

In deciding a motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), “the district court is ‘free to weigh the evidence and resolve factual disputes in order to satisfy itself that it has the power to hear the case.'” Krim v. pcOrder.com, Inc., 402 F.3d 489, 494 (5th Cir. 2005). The party asserting jurisdiction must carry the burden of proof for a Rule 12(b)(1) motion to dismiss. Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 762 (5th Cir. 2011). The standard of review for a motion to dismiss under Rule 12(b)(1) is the same as that for a motion to dismiss pursuant to Rule 12(b)(6). United States v. City of New Orleans, No. 02-3618, 2003 WL 22208578, at *1 (E.D. La. Sept. 19, 2003). If a court lacks subject matter jurisdiction, it should dismiss without prejudice. In re Great Lakes Dredge & Dock Co., 624 F.3d 201, 209 (5th Cir. 2010). When “a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.” Id. (internal quotation marks and citation omitted). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead sufficient facts 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)). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The factual allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. “[D]etailed factual allegations” are not required, but the pleading must present “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. The court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009). However, “‘conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.'” Beavers v. Metro. Life Ins. Co., 566 F.3d 436, 439 (5th Cir. 2009) (citation omitted).

DISCUSSION

The United States has moved to dismiss Denka's counterclaims as well as its first six affirmative defenses which the United States argues are mis-designated and are actually also counterclaims.^[2] These affirmative defenses and counterclaims largely deal with the same subject matter Denka's contentions that the EPA did not utilize the best scientific data available in creating the 2010 Review and in denying Denka's subsequent challenges to this Review and that this failure constituted a violation of the Administrative Procedure Act. (Rec. Doc. 22, at 17-20, 55-64). The United States argues that the Court lacks subject matter jurisdiction over the 2010 Review and the Denials because the United States has not waived sovereign immunity for these particular claims.

I. Statute of Limitations

One counterclaim and one affirmative defense can be quickly dealt with before addressing the merits of the United States' arguments concerning sovereign immunity. Denka's first counterclaim seeks relief on the grounds that “the issuance and application of the 2010 Review setting a 0.2 pg/m3 1-in-10,000 risk-based value for chloroprene was arbitrary, capricious, an abuse of discretion, and not in accordance with law in violation of the APA, because Counterclaim-Defendants failed to consider the best available scientific data despite concerns raised by qualified peer reviewers.” (Rec. Doc. 22, at 55). Denka's first affirmative defense rests on nearly identical grounds: “In conducting the 2010 Review, EPA was obligated to consider the best scientific data available to EPA at the time of its decision, and its failure to do so, resulting in the setting of a 0.2 pg/m3 value for chloroprene, was arbitrary, capricious, an abuse of discretion, and not accordance with law, in violation of the APA.” Id. at 17. Both claims rest solely on the issuance of the 2010 Review itself and do not address the EPA's subsequent Denials or usage of the information contained within the Review.

Assuming that the 2010 Review would constitute a final agency action which is an exception to the United States' sovereign immunity, the EPA argues that any APA challenges against it are time barred and have been so since 2016. (Rec. Doc. 57, at 34). The EPA reasons that even if IRIS assessments such as the 2010 Review were reviewable under the APA, 28 U.S.C. § 2401 would apply to bar these claims. Section 2401 states that “. . . every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.” The EPA concedes that the EPA's use of the information contained in the 2010 Review falls outside of this time bar, meaning that only Denka's first counterclaim and first affirmative defense challenging the issuance of the 2010 Review would be impacted.

Denka does not seriously dispute that this six-year statute of limitations is applicable in this case. Instead, Denka argues that “the fact that EPA did not act sooner to directly enforce the 0.2 yg/m3 standard should not allow EPA to now hide behind the statute of limitations and avoid judicial review of the 2010 Review and its resulting 0.2 yg/m3 standard altogether.” (Rec. Doc. 66, at 30). Furthermore, Denka asserts that it was forced to exhaust its administrative remedies before seeking judicial review. However, Denka does not explain why this procedural requirement should affect a statute of limitations proscribed by statute which operates to deprive the Court of jurisdiction. See Dunn-McCampbell Royalty Interest, Inc. v. National Park Service, 112 F.3d 1283, 1287 (5th Cir. 1997) (“The applicable statute of limitations is one such term of consent, and failure to sue the United States within the limitations period is not merely a waivable defense. It operates to deprive federal courts of jurisdiction.”). Therefore, Denka's challenge to the 2010 Review itself is time barred.

However “a plaintiff who misses this window may still obtain effective review of the regulation by instead bringing a challenge within six years of a later final agency action that applies the regulation to the plaintiff.” Am. Stewards of Liberty v. Department of Interior, 960 F.3d 223, 229 (5th Cir. 2020). In such a situation, however, “an agency's application of a rule to a party creates a new, six-year cause of action to...