Voigt v. Coyote Creek Mining Co.

329 F.Supp.3d 735

Casey VOIGT and Julie Voigt, Plaintiffs,

v.COYOTE CREEK MINING COMPANY, LLC, a North Dakota Corporation, Defendant,

Case No. 1:15–cv–00109

United States District Court, D. North Dakota.

Signed July 3, 2018

Derrick L. Braaten, JJ William England, Braaten Law Firm, Bismarck, ND, for Plaintiffs.

Brian R. Bjella, Crowley Fleck PLLP, Bismarck, ND, Jeffery D. Ubersax, Alina Fortson, Charles T. Wehland, Pro Hac Vice, Jones Day, Cleveland, OH, Gregory F. Dorrington, Crowley Fleck PLLP, Helena, MT, Mark Lawrence Stermitz, Crowley Fleck PLLP, Missoula, MT, for Defendant.

ORDER GRANTING SUMMARY JUDGMENT OF DISMISSAL

Charles S. Miller, Jr., Magistrate Judge

Before the court are two motions. One is defendant's motion for summary judgment of dismissal, which is supported by amicus briefs from the State of North Dakota and the Lignite Energy Council ("LEC").¹ The other is plaintiffs' motion for partial summary judgment as to certain issues of liability.

The court previously denied defendant's motion to dismiss for lack of jurisdiction, abstention, and failure to state claim. Voigt v. Coyote Creek Mining Company, LLC, No. 1-15-cv-00109, 2016 WL 3920045 (D.N.D. July 15, 2016) (" Voigt"). For purposes of convenience, portions of the court's earlier decision will be repeated as appropriate.

I. GENERAL BACKGROUND

A. The parties

Defendant is a coal mining company. At the time of the filing of this action, it had commenced construction of the Coyote Creek Mine in rural Mercer County, North Dakota. During the pendency of this action, construction was completed and mining commenced.

Plaintiffs are ranchers. They own or lease some 5,637 acres in rural Mercer County, a significant portion of which either underlies or is in close proximity to defendant's mine. Plaintiffs' primary claim in this action is that defendant did not obtain the correct type of Clean Air Act permit for the construction of its mine, contending it needed a "major source" construction permit instead of the "minor source" permit it sought and received.

The relationship between plaintiffs and defendant has been a contentious one. Plaintiffs have contested other state and local permits that defendant needed either for construction or operation of its mine.

B. The Coyote Creek Mine

The Coyote Creek Mine is a surface mine that mines lignite, which is a low grade coal, i.e. , it generates less BTU's on a per ton basis than higher grade coals. Because of its low grade, lignite is typically consumed near the mine because other coals (as well as other fuels) are more economical if they have to be transported any significant distance.

At this point, the only customer for defendant's mine is the Coyote Station, a coal-fired electric generating plant owned by a consortium of electrical utilities. The Coyote Station is a "mine mouth" plant, i.e. , it is located in close proximity to the coal fields that are the source of its fuel, including defendant's coal reserves and mine. The Coyote Station as been in operation for more than three decades and previously had been supplied with lignite coal from another nearby mine.

The Coyote Creek Mine is not the only lignite mine in North Dakota. There are several other lignite mines that similarly supply other "mine-mouth" electric generating stations, and, in one instance, a commercial coal gasification plant.

In addition to removing the lignite coal from the ground and transporting to it to the Coyote Station, the Coyote Creek Mine crushes the mine-run coal down to a smaller size before it makes delivery to the Coyote Station. The mine facilities that "process" the coal in this fashion are the particular focus of this action because of the additional regulatory requirements that apply to coal processing facilities under the Clean Air Act.

C. The Clean Air Act and North Dakota's implementation of the Act

Under the Clean Air Act ("Act" or "CAA") as amended, EPA has established national ambient air quality standards (NAAQS) for six pollutants: (1) particulate matter; (2) sulfur dioxide; (3) nitrogen oxides (with sulfur dioxide as the indicator); (4) carbon monoxide; (5) lead; and (6) ozone. E.g., Utility Air Regulatory Group. v. E.P.A., 573 U.S. 302, 134 S.Ct. 2427, 2435, 189 L.Ed.2d 372 (2014). Those areas of the country that meet the standards are classified as "attainment" areas and those that do not are "nonattainment" areas. Id. North Dakota is an attainment area for all of the regulated pollutants.

An important part of the CAA's scheme to achieve and maintain the NAAQS is its New Source Performance Standards (NSPS) program. The NSPS provisions require EPA to implement technology-based performance standards to limit emissions from new major sources of pollution, including newly constructed facilities and modifications of existing ones that increase emissions. E.g., Sierra Club v. Otter Tail Power Co., 615 F.3d 1008, 1011 (8th Cir. 2010).

Congress later concluded that the NSPS program and the NAAQS were not enough because they did not prevent against the degradation of air quality in those areas of the country, like North Dakota, where the pollutant levels are lower than the NAAQS. For this reason, Congress amended the CAA to include provisions for the prevention of significant deterioration of air quality (the "PSD" provisions) that are set forth in Part C of Subchapter I of the Act, codified at 42 U.S.C. §§ 7470 – 7492. Id.

Among the PSD provisions is a requirement that a "major emitting facility" may not be constructed until it obtains a permit to construct that complies with certain requirements of Part C, including the source's use of best available control technology ("BACT") for each regulated pollutant emitted from the facility. 42 U.S.C. §§ 7475(a) & 7479(1) – (3). The Act defines a major emitting facility as any stationary source with the potential to emit ("PTE") 250 tons per year ("tpy") of any air pollutant, except for certain listed sources for which the threshold limit is 100 tpy. 42 U.S.C. § 7479(1) ; see generally Alaska Dep't of Environmental Conservation v. E.P.A., 540 U.S. 461, 470–73, 124 S.Ct. 983, 157 L.Ed.2d 967 (2004) (" ADEC") (discussing the PSD program and the BACT requirement). For purposes of the discussion that follows: (1) a major emitting facility may be referred to simply as a "major source," which is the term the State of North Dakota uses; (2) the requisite threshold for qualifying as a major emitting facility may be referred to as the "major source threshold;" and (3) the construction permit required for a major emitting facility under the federal and state PSD provisions may be referred to as the "major source construction permit" or simply "major source permit."

The CAA places primary responsibility upon the states for formulating detailed air pollution control strategies and carrying out the Act's provisions. To accomplish this, the CAA requires that each state adopt and submit to EPA for approval a "State Implementation Plan" ("SIP") to implement and carry out the policies and goals of the Act. ADEC, 540 U.S. at 470, 124 S.Ct. 983.

North Dakota has an approved SIP for much of the CAA's requirements, including administration of its PSD provisions. See 40 C.F.R. §§ 52.1820 – 52.1837. Thus, the State is the permitting authority for new facilities that require a major source construction permit. In addition, North Dakota has adopted regulations that impose its own requirements for new facilities that do not need a major source construction permit and for these it issues its own "minor source" construction permit. See generally N.D.A.C. Art. 33–15 (North Dakota's air pollution control regulations).

The North Dakota Department of Health ("NDDOH") is the state agency charged with the administration and enforcement of the CAA and North Dakota's air quality laws. N.D.C.C. §§ 23–25–02 & 23–12–03. This includes the responsibility for reviewing construction permit applications and determining whether a major or minor source permit is required. Id.

D. NDDOH's issuance of a minor source construction permit

Defendant applied for and received a minor source construction permit from the NDDOH for the Coyote Creek Mine. Prior to issuing the permit, the NDDOH did not give public notice of the filing of defendant's application for the construction permit nor did it invite public participation in the permitting process. (Doc. No. 1–3).

What the NDDOH considered or failed to consider in processing the permit application will be addressed in more detail later.

E. This case

Plaintiffs make two claims in their Amended Complaint. The primary one is that defendant needed a major source construction permit for its Coyote Creek Mine rather than the minor source permit it was granted. Plaintiffs argue this is because the mine's coal processing facilities (i.e. , the part of defendant's coal mine that does the crushing) has a PTE for particulate matter ("PM") of 250 tpy or more, which is the requisite threshold in this instance for needing a major source construction permit. And, if a major source construction permit is required, this would subject not only the mine's coal processing facilities but also the entire mine to the CAA's and the NDDOH's more onerous requirements for major sources. Why the entire mine would be considered a major source and not just the coal processing facilities will be returned to later.

Plaintiffs contend for their second claim that defendant is in violation of the CAA's NSPS requirements by operating an open storage coal pile without a fugitive dust control plan as required by 40 C.F.R. § 60.254(c). As explained later, a § 60.254(c) dust control plan is only required if the open storage coal pile is deemed to be part of defendant's coal processing facilities.

Plaintiffs bring this action pursuant to the "citizen suit" provisions of 42 U.S.C. § 7604(a)(3) as well as 28 U.S.C. § 1331 (federal question jurisdiction). Plaintiffs seek:

(1) a declaration that the Coyote Creek Mine is a major source

...