United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
WILLIAM L. OSTEEN, Jr., District Judge.
This matter is before the court on Defendant Duke Energy Corporation's Motion for Leave to File Supplemental Motion for Summary Judgment ("Duke's Mot.") (Doc. 457). Duke filed this motion nearly two years after both parties filed cross-motions for summary judgment, asserting three justifications for re-opening summary judgment briefing: (1) that recent developments in case law demonstrate that this court's 2003 decision regarding the applicability of the statute of limitations was incorrect, (2) that Duke's ongoing retirement of certain power plants at issue in this case renders moot the Government's claims for equitable relief, and (3) that recent case law prohibits the Government from obtaining equitable relief for the types of violations at issue, regardless of the mootness issue. (Id. at 2-3.) After careful consideration of the parties' written briefs as well as the oral arguments presented at the April 4, 2014 hearing, the court concludes that Duke's motion should be denied for the reasons set forth below.
I. RELEVANT CASE HISTORY
As detailed many times over in the various orders, pleadings, and motions spanning its fourteen-year history, this case arises from Duke's alleged failure to obtain required permits prior to making certain statutorily-defined "modifications" to some of its coal-fired power plants. See, e.g., United States v. Duke Energy Corp. ("Duke IV"), No. 1:00CV1262, 2010 WL 3023517, at *1 (M.D. N.C. July 28, 2010). The relevant permitting requirements, which come from the Prevention of Significant Deterioration ("PSD") provisions of the Clean Air Act ("CAA"), "require a utility to obtain a pre-construction permit when proposed changes would increase the actual annual emission of a pollutant above the actual average for the two prior years.'" Id . at *5 (quoting Envtl. Def. v. Duke Energy Corp. ("Duke III") , 549 U.S. 561, 570 (2007)).
Because "[t]he CAA does not provide a specific statute of limitations applicable to alleged violations of its provisions[, ]... [t]he general federal statute of limitations for civil enforcement actions applies." United States v. Duke Energy Corp. ("Duke I") , 278 F.Supp.2d 619, 649 (M.D. N.C. 2003), aff'd on other grounds, 411 F.3d 539 (4th Cir. 2005), judgment vacated sub nom. Envtl. Def. v. Duke Energy , 549 U.S. 561 (2007). This statute provides that "an action... for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued." Id . (quoting 28 U.S.C. § 2462 (1994)) (internal quotation marks omitted). Duke, noting that the Government did not file suit until 2000 and that all of the claims based on alleged PSD violations accruing after 1994 have been voluntarily dismissed (see Stipulation of Dismissal of Certain Claims and Defenses (Doc. 418)), argues that this five-year statute of limitations consequently bars any remaining claims. (See Duke's Mot. (Doc. 457) at 3.)
The concern with Duke's argument, however, is that another district court rejected it over ten years ago when Duke raised it for the first time. (See generally Duke's Motions for Partial Judgment on the Pleadings (Docs. 22 and 37); Order and Judgment (Doc. 235).) Duke, emphasizing the language of the statute of limitations that a claim is barred five years from the date it "first accrue[d], " asserted "that violations of [the PSD] preconstruction permitting requirements occur when actual construction is commenced at the facility, and not at some later time." Duke I , 278 F.Supp.2d at 649. Therefore, Duke claimed, "any civil penalties arising from modifications commenced before December 22, 1995 [i.e., more than five years before the filing of the Complaint] are time barred." Id . at 650. The Government disagreed with Duke's characterization of the violations, arguing that Duke's failure to obtain a permit was not a one-time violation, but a continuing violation not encompassed by the statute of limitations. Id . at 649.
The Duke I court sided with the Government, reasoning that the PSD preconstruction permits, had Duke obtained them, would have "set forth emission limitations for [each plant] following the construction activity" and subsequently required Duke to "operate in accordance with the terms of that permit." Id . at 650. The Duke I court further reasoned that:
[B]ecause the PSD permitting provisions provide both preconstruction obligations and subsequent obligations on operations, Duke Energy's alleged violation of failing to undergo the PSD permitting process does not terminate upon the completion of construction activity. The violation continues because each day that Duke Energy operates an allegedly modified plant and emits pollutants into the atmosphere, it may be in violation of the requirement to comply with the operation conditions, i.e., the emission limitations, that would have been contained within a PSD permit had Duke Energy submitted to the permitting process.
Id. at 651. See also United States v. Marine Shale Processors , 81 F.3d 1329, 1355-56 (5th Cir. 1996); United States v. Ohio Edison Co., No. 2:99-cv-1181 , 2003 WL 23415140, at *6 (S.D. Ohio Jan. 17, 2003); United States v. Am. Elec. Power Serv. Corp , 137 F.Supp.2d 1060, 1066 (S.D. Ohio 2001).
As Duke points out, however, four Courts of Appeals have since found that failure to obtain a PSD preconstruction permit is a one-time violation - a conclusion contrary to the Duke I court's opinion. See United States v. EME Homer City Generation , 727 F.3d 274 (3d Cir. 2013); United States v. Midwest Generation, LLC , 720 F.3d 644 (7th Cir. 2013); Sierra Club v. Otter Tail Power, Co. , 615 F.3d 1008 (8th Cir. 2010); Nat'l Parks and Conservation Ass'n v. Tenn. Valley Auth. , 502 F.3d 1316 (11th Cir. 2007). All four of these cases employ substantially the same basic reasoning. First, they note that the plain language of the PSD statute prohibits "construction" or "modification" of a facility without obtaining the required permits, but is silent on the issue of "operation." See, e.g., EME Homer City , 727 F.3d at 284. Additionally, they emphasize that the CAA contains a separate operating permit requirement above and beyond the PSD preconstruction permit requirements, making it unlikely that Congress intended for the preconstruction permit to act as an operating permit, as well. See id. at 285. Finally, they observe that the PSD enforcement mechanisms do not appear to allow a remedy for operation without a preconstruction permit. See id. at 285 ("Nowhere do these [preconstruction permit] provisions authorize enforcement against a person who operates' a source without satisfying applicable PSD requirements."). Suffice it to say that each of these Courts of Appeals considered and rejected reasoning substantially similar to that employed by the district court in its 2003 ruling. See, e.g., id. at 286 ("The [Government's] argument is simple: obtaining a PSD permit is a condition of operating a source because PSD permits impose some operational conditions on the sources they govern.... But Ockham's Razor reminds us that simplicity in argument, without more, is no barometer of merit.").
This court finds the decisions of these Courts of Appeals well-reasoned, and cannot say definitively that the Duke I court would not have been persuaded by them had they existed ten years ago. Nevertheless, this court will decline Duke's invitation to re-address the statute of limitations question because the doctrine of law of the case counsels heavily against such a reconsideration.
II. LAW OF THE CASE DOCTRINE
Even though "a district court retains the power to reconsider and modify its interlocutory judgments, including partial summary judgments, at any time prior to final judgment when such is warranted[, ]" Am. Canoe Ass'n v. Murphy Farms, Inc. , 326 F.3d 505, 514-15 (4th Cir. 2003) (internal citations omitted), "[t]he law of the case doctrine posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case, '" TFWS, Inc. v. Franchot , 572 F.3d 186, 191 (4th Cir. 2009) (citing United States v. Aramony , 166 F.3d 655, 661 (4th Cir. 1999)). This doctrine "is designed to serve the goals of finality and predictability in the trial court[, ]... [but] is neither absolute nor inflexible; it is a rule of discretion rather than a jurisdictional requirement." Walker v. S.W.I.F.T. SCRL , 517 F.Supp.2d 801, 807-08 (E.D. Va. 2007) (citing Smith v. Bounds , 813 F.2d 1299, 1304 (4th Cir. 1987)). Nevertheless, the rule will apply "unless: (1) a subsequent trial produces substantially different evidence, (2) controlling authority has since made a contrary decision of law applicable to the issue, or (3) the prior decision was clearly erroneous and would work manifest injustice." TFWS , 572 F.3d at 191 (internal citation and quotation marks omitted); accord Sejman v. Warner-Lambert Co. , 845 F.2d 66, 69 (4th Cir. 1988).
In its supplemental briefing, Duke argues that this three-circumstance test applies only "after the court of appeals has [established the law of the case, ]" and does not apply when a district court is asked to reconsider its own prior decision. (Def.'s Supplemental Br. in Supp. of Mot. for Leave to File Supplemental Mot. for Summ. J. ("Duke's Supp. Br.") (Doc. 470) at 4.) Duke then points to general policy statements and other declarations purporting to support a more lenient standard for district courts, but certain of Duke's cited cases actually undermine its argument. Compare Duke's Supp. Br. (Doc. 470) at 5 n.2 ("Thus, the [three-circumstance] standard... relied upon by plaintiffs is controlling only after an appellate decision has narrowed the district court's ordinarily broad discretion to reconsider interlocutory orders.'" (citing Am. Canoe , 326 F.3d at 515)) with Am. Canoe , 326 F.3d at 515 (noting that "doctrines such as law of the case... have evolved as a means of guiding [a district court's] discretion" and listing the three circumstances noted above (citing Sejman v. Warner-Lambert Co. , 845 F.2d 66, 69 (4th Cir. 1988))). Rather ...