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UNITED STATES DISTRICT COURT


EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

UNITED STATES OF AMERICA, )


)
Plaintiff, )
) Civil Action No. 11-CV-00077
v. )
) Judge Rodney W. Sippel
AMEREN MISSOURI, )
)
Defendant. )
____________________________________)

AMEREN MISSOURI’S MEMORANDUM OF LAW IN SUPPORT OF ITS


RULE 12(b)(6) MOTION TO DISMISS
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TABLE OF CONTENTS

Page

I. INTRODUCTION ............................................................................................................. 1
II. FACTUAL AND LEGAL BACKGROUND .................................................................... 3
A. The Projects at Issue and When They Occurred.................................................... 3
B. The Pre-Construction PSD Permitting Program .................................................... 3
C. The Missouri State Implementation Plan (“SIP”).................................................. 4
III. APPLICABLE LEGAL STANDARDS ............................................................................ 4
IV. ANALYSIS........................................................................................................................ 5
A. The Entire Complaint Should Be Dismissed Because it Does Not Make
Any Factual Allegations ........................................................................................ 5
B. In the Alternative, The PSD Penalty Claims Should Be Dismissed. ..................... 7
C. In the Alternative, Certain Title V Penalty Claims Should Be Dismissed .......... 13
V. CONCLUSION................................................................................................................ 15

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TABLE OF AUTHORITIES

Page

Cases
3M Co. v. Browner,
17 F.3d 1453 (D.C. Cir. 1994) ............................................................................................ 12, 13
Appalachian Power Co. v. EPA,
208 F.3d 1015 (D.C. Cir 2000) ................................................................................................. 14
Ashcroft v. Iqbal,
129 S. Ct. 1937 (2009)............................................................................................................ 2, 5
Atwell v. KW Plastics Recycling Div.,
173 F. Supp. 2d 1213 (M.D. Ala. 2001) ................................................................................... 15
Bell Atlantic Corp. v. Twombly,
550 U.S. 544, S. Ct. 1955 (2007).................................................................................... 2, 4, 5, 7
C.N. v. Willmar Pub. Sch., Indep. Sch. Dist. No. 347
591 F.3d 624 (8th Cir. 2010) ...................................................................................................... 6
Hughes Aircraft Co. v. Jacobson,
525 U.S. 432 (1999).................................................................................................................... 8
In re UMETCO Minerals Corp.,
No. CAA-113-VIII-92-03,1996 WL 691531 (EPA Mar. 29, 1996)......................................... 15
Nat’l Parks & Conservation Assoc., Inc. v. Tennessee Valley Auth.,
502 F.3d 1316 (11th Cir. 2007) .......................................................................................... 10, 11
New York v. Niagara Mohawk Power Corp.,
263 F. Supp. 2d 650 (W.D.N.Y. 2003) ............................................................................. 8, 9, 10
NicSand, Inc. v. 3M Co.,
507 F.3d 442 (6th Cir. 2007) ...................................................................................................... 7
Pennsylvania v. Allegheny Energy, Inc.,
No. Civ. A. 05-885, 2006 WL 1509061 (W.D. Pa. Apr. 19, 2006)......................................... 11
Public Citizen, Inc. v. EPA,
343 F.3d 449 (5th Cir. 2003) ................................................................................................ 4, 12
Saunders v. Farmers Ins. Exch.,
537 F.3d 961 (8th Cir. 2008) ...................................................................................................... 4
Sierra Club v. Duke Energy Ind., Inc.,
No. 1:08-cv-437, 2010 WL 3667002, (S.D. Ind. Sept. 20, 2010)............................................ 11
Sierra Club v. EPA,
315 F.3d 1295 (11th Cir. 2002) .................................................................................................. 4
Sierra Club v. Otter Tail Corp.,
608 F. Supp. 2d 1120 (D.S.D. 2009) ........................................................................................ 13
Sierra Club v. Otter Tail Power Co.,
615 F.3d 1008 (8th Cir. 2010) ........................................................................................... passim
Stalley v. Catholic Health Initiatives,
509 F.3d 517 (8th Cir. 2007) ...................................................................................................... 5
United States v. Alabama Power Co.,
372 F. Supp. 2d 1283 (N.D. Ala. 2005)...................................................................................... 2
United States v. Cinergy Corp.,
397 F. Supp. 2d 1025 (S.D. Ind. 2005) ................................................................................. 8, 11

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TABLE OF AUTHORITIES
(continued)
Page

United States v. E. Ky. Power Coop., Inc.,


498 F. Supp. 2d 970 (E.D. Ky. 2007) ....................................................................................... 15
United States v. Illinois Power Co.,
245 F. Supp. 2d 951 (S.D. Ill. 2003)................................................................................... 11, 15
United States v. Midwest Generation, LLC,
694 F. Supp. 2d 999 (N.D. Ill. 2010) ........................................................................................ 11
United States v. S. Ind. Gas & Elec. Co.,
245 F. Supp. 2d 994 (S.D. Ind. 2003) ......................................................................................... 6
United States v. S. Ind. Gas & Elec. Co.,
No. IP-99-1692, 2002 WL 1760752 (S.D. Ind. July 26, 2002) ................................................ 11
United States v. Westvaco Corp.,
144 F. Supp. 2d 439 (D. Md. 2001) .......................................................................................... 11
Varner v. Peterson Farms,
371 F.3d 1011 (8th Cir. 2004) .................................................................................................... 5
Statutes
28 U.S.C. § 2462............................................................................................................................. 8
42 U.S.C. § 7407............................................................................................................................. 4
42 U.S.C. § 7410............................................................................................................................. 4
42 U.S.C. § 7470............................................................................................................................. 3
42 U.S.C. § 7475..................................................................................................................... 3, 8, 9
42 U.S.C. § 7479......................................................................................................................... 3, 9
42 U.S.C. § 7502............................................................................................................................. 3
42 U.S.C. § 7503............................................................................................................................. 3
MO. Rev. Stat. § 643.055(1)......................................................................................................... 12

Regulations
10 CSR § 10-6.020.......................................................................................................................... 4
10 CSR § 10-6.060.......................................................................................................... 4, 9, 10, 14
10 CSR § 10-6.065............................................................................................................ 13, 14, 15
40 C.F.R. § 52.21 .................................................................................................................... 3, 4, 9
57 Fed. Reg. 32251 ....................................................................................................................... 14
Fed Reg Vol. 76 No. 44 .................................................................................................................. 3
Final Rule,
57 Fed. Reg. 32250 (July 21, 1992).......................................................................................... 13

Other Authorities
EPA, Office of Air Quality Planning and Standards, White Paper for Streamlined Development
of Part 70 Permit Applications (July 10, 1995) ........................................................................ 14

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I. INTRODUCTION

This case is about the Plaintiff’s attempt to impose hundreds of millions of dollars in

penalties and injunctive relief against Ameren Missouri for its lawful and routine maintenance of

its Rush Island power plant in Festus, Missouri. The Complaint alleges that certain maintenance

projects Ameren Missouri performed nearly ten years ago violated the Prevention of Significant

Deterioration (“PSD”) and Title V provisions of the Clean Air Act (“CAA”), and the Missouri

state implementation plan (“Missouri SIP”).

The Complaint seeks to hold illegal the type of routine repair activities that power plant

operators have conducted for decades, projects with which the United States Environmental

Protection Agency (“U.S. EPA”) took no issue until 1999. Starting in 1999, however, U.S. EPA

began a spate of litigation that targeted coal-fired power plants. For the first time, and directly

contrary to years of regulatory statements and practice by U.S. EPA and state agencies charged

with implementing the PSD programs, this new litigation initiative claimed that when operators

repaired or refurbished power plant components to prevent degradation, those activities were so-

called “major modifications” that triggered PSD permitting requirements. But the projects at

issue in this Complaint do not qualify as “major modifications,” for several reasons, including

because under the Missouri SIP, which was expressly approved by U.S. EPA, routine repair and

replacement of components like boiler tubes and turbines – the projects at issue in the Complaint

– are not “major modifications.” Nor do the kind of projects at issue increase emissions.

In spite of this history, and the fact that U.S. EPA has been investigating Ameren

Missouri since 2008, the Complaint lacks any factual allegations about the projects. This

includes a complete absence of allegations on several key issues: why these projects were not

routine; why they would have been predicted, before beginning construction, to cause an

emissions increase; how they actually caused an emissions increase; or the amount of that

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alleged increase. Some allegations are actually counterintuitive, like those that attack turbine

replacements that improve efficiency, allowing the generation of more electricity with fewer

emissions for a given amount of fuel. Instead of facts, the Complaint offers only verbatim quotes

of regulations and conclusions of law, which cannot make out any plausible claim to relief under

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965 (2007) and Ashcroft v.

Iqbal, 129 S. Ct. 1937, 1949 (2009). The Complaint thus exemplifies an “enforcement”

approach that has led one United States District Court to characterize this litigation initiative as

“sport,” – “not exactly what one would expect to find in a national regulatory enforcement

program.” U. S. v. Alabama Power Co., 372 F. Supp. 2d 1283, 1306 n.44 (N.D. Ala. 2005).

The lack of any factual allegations about the projects is particularly inappropriate in light

of Ameren Missouri’s long history of reducing emissions while still providing cost-effective and

reliable power generation. Through the addition of emission control equipment, newer and more

efficient combustion technology, and advanced operating practices, Ameren Missouri has

substantially reduced the rate of sulfur dioxide (“SO2”) and nitrogen oxide (“NOx”) emissions

from its plants over the past two decades. Moreover, Ameren Missouri was among the first

utilities to switch to low-sulfur coal as its primary fuel source. This costly effort led to a

substantial reduction in SO2 emissions. Given this history, the Complaint’s unsupported

assertion that “emissions increased” rings hollow.

Even if the Court declines to dismiss the entire Complaint for violating Twombly and

Iqbal, most of the claims for civil monetary penalties should be dismissed as time-barrred.

Under both the CAA and the Missouri SIP, any claimed violations of the PSD program (in

Counts I and II) occurred, if at all, at the time the alleged “modification” took place and are not

continuing violations. Sierra Club v. Otter Tail Power Co., 615 F.3d 1008, 1016-18 (8th Cir.

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2010). The same is true for the related claims that Ameren Missouri violated the conditions of

its Title V operating permit (Counts III and IV). The relevant statute of limitations is five years,

and all of the projects took place – and thus, those claims accrued – well over five years ago.

II. FACTUAL AND LEGAL BACKGROUND

A. The Projects at Issue and When They Occurred.

The Complaint attacks four projects: (1) “a project to replace the complete primary

superheater” and (2) “associated turbine replacements,” both of which took place at Rush Island

Unit 1 from “September 2001 to February 2002” (Compl. at ¶ 65); (3) “a project to replace the

complete primary superheater” and (4) “associated turbine replacements” both of which took

place at Rush Island Unit 2 from “November 2003 to January 2004” (Id. at ¶ 71) (the “Projects”).

B. The Pre-Construction PSD Permitting Program.

Congress created the current New Source Review (“NSR”) program in 1977. The NSR

program consists of PSD, which is potentially applicable to major emitting facilities located in

areas that are “in attainment” for a particular pollutant, 42 U.S.C. §§ 7470-7492, and Non-

Attainment NSR, which applies to pollutants for which the area is not in attainment.1 Sulfur

dioxide (SO2) is the only pollutant at issue in the Complaint, and the area of Missouri at issue is

in attainment for SO2 – so only PSD is at issue. (Compl. at ¶ 17.) For a source that began initial

construction prior to 1977 – like the Rush Island plant, see Compl. at ¶¶ 64, 70 – the PSD

program only applies if and when a “major modification” occurs. 42 U.S.C. § 7475(a)(1); 40

C.F.R. §§ 52.21(a)(2), (b)(2).2

1
Since the Complaint was filed, U.S. EPA proposed a regulatory determination declaring the St.
Louis metro area in compliance with ambient standards for PM2.5. 76 Fed. Reg. 12,302 (March 7, 2011).
The allegation that the area is in non-attainment for PM2.5 is no longer accurate. (Compl. ¶ 17).
2
The CAA defines “construction” to include “modification.” See 42 U.S.C. § 7479(2)(C). The
Projects are alleged to involve “modification” of existing units.

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If a source plans a “major modification,” PSD requires the operator to seek a construction

permit before the modification begins. Id. Conversely, if the planned modification is not

expected to increase net emissions above a threshold level, or is otherwise not covered by the

PSD program, the operator does not need to apply for a permit. Id.; 40 C.F.R. § 52.21(b)(23).

C. The Missouri State Implementation Plan (“SIP”).

The CAA establishes a program of “cooperative federalism” with a “division of labor

between individual States and EPA” for the attainment and maintenance of national air quality

goals. Sierra Club v. EPA, 315 F.3d 1295, 1300 (11th Cir. 2002). “Primary responsibility for

enforcement of the CAA is vested in state and local governments.” Public Citizen, Inc. v. EPA,

343 F.3d 449, 453 (5th Cir. 2003); 42 U.S.C. §§ 7407(a), 7410(a)(1).

Missouri implements the federal requirements for a state construction permit program in

the Missouri SIP. 10 Mo. Code Regs. tit. (“C.S.R.”) 10, § 10-6.060. Missouri’s construction

permit program includes a PSD program that has been approved by EPA. 10 C.S.R. § 10-

6.060(8) (PSD). Under the Missouri SIP “routine maintenance, repair, and replacement of parts,”

including, specifically, replacement of “boiler tubes” and “turbines” are not “major

modifications.” 10 C.S.R. §§ 10-6.020(2)(M)3.A, 10-6.060(1)(E)1. The Complaint attacks two

kinds of Projects: (a) replacement of two superheaters – a component consisting solely of boiler

tubes – and (b) turbine replacements. The Complaint does not allege or explain why the Projects

are not “routine” under the Missouri SIP or any other facts about the Projects.

III. APPLICABLE LEGAL STANDARDS

While well-pleaded factual allegations must be taken as true on a motion to dismiss, the

same is not true for mere conclusions or a mere recitation of the legal elements of a claim.

Twombly, 550 U.S. at 550 (“a formulaic recitation of the elements of a cause of action will not

[state a claim]”); Saunders v. Farmers Ins. Exch., 537 F.3d 961, 965 (8th Cir. 2008) (affirming

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dismissal where complaint’s conclusory allegations were mere “labels and a formulaic recitation

of the elements of a cause of action”). Moreover, on a Rule 12(b)(6) motion to dismiss, courts in

the 8th Circuit “giv[e] no effect to conclusory allegations of law.” Stalley v. Catholic Health

Initiatives, 509 F.3d 517, 521 (8th Cir. 2007).

Further, “when it appears from the face of the complaint itself that the limitations period

has run, a limitations defense may properly be asserted through a Rule 12(b)(6) motion to

dismiss.” Varner v. Peterson Farms, 371 F.3d 1011, 1016 (8th Cir. 2004).

IV. ANALYSIS

A. The Entire Complaint Should Be Dismissed Because it Does Not Make Any
Factual Allegations.

The Complaint fails to state a claim because it does nothing more than parrot the relevant

laws and regulations, without alleging any specific facts, as required by Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009).

On a motion to dismiss, legal conclusions are given no effect. Because the Complaint consists

entirely of legal conclusions, once they are ignored, there is nothing left to state a claim.

The heart of the Complaint is the claim, made principally in paragraphs 65 and 71 of the

Complaint, that the Projects would cause SO2 emissions to increase, that the Projects were

“major modifications,” and that therefore, Ameren Missouri was required, but failed, to obtain a

construction permit before beginning the Projects. But the Complaint’s allegations are perfect

examples of what is expressly forbidden by Twombly and Iqbal – mere “formulaic recitations of

the elements of a cause of action.” Here is the key language from paragraphs 65 and 71: “These

physical changes and/or changes in the method of operation resulted in a significant net

emissions increase of SO2, as defined in the Missouri SIP.” (Compl. at ¶¶ 65, 71). These

allegations are merely verbatim recitations of the Missouri PSD regulation. (Compare Compl. at

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¶ 29 (quoting the Missouri PSD regulation) with id. at ¶¶ 65, 71 (exact same language).)3

Plaintiff bears the burden of pleading and proving facts that establish all elements of a

“major modification.” See e.g., United States v. S. Ind. Gas & Elec. Co., 245 F. Supp. 2d 994,

998 (S.D. Ind. 2003). But the Complaint alleges no facts whatsoever regarding the Projects other

than the fact they occurred and cost millions of dollars. Instead of facts, the Complaint offers

legal conclusions or citations to regulations: “Defendant began actual construction and operation

of one or more “major modifications,” as defined in the CAA and the Missouri SIP.” (Compl. at

¶¶ 65, 71.)4 For example, the Complaint fails to allege any of these key facts:

• why, before construction began, would Ameren Missouri have expected the
Projects to increase net emissions significantly, such that the obligation to seek a
PSD construction permit would have been triggered in the first place;

• how the Projects allegedly caused an emissions increase;

• the amount by which such emissions allegedly increased;

• how the alleged “increase” was calculated; and

• why the calculation method was appropriate under existing Missouri law.

At bottom, the Complaint says nothing more than “The Projects violated the Clean Air Act.”

That does not state a claim. “[A] pleading that offers merely labels and conclusions or naked

assertions devoid of further factual enhancement does not plausibly establish entitlement to relief

under any theory.” C.N. v. Willmar Pub. Sch., Indep. Sch. Dist. No. 347, 591 F.3d 624, 634 (8th

Cir. 2010) (quoting Iqbal, 129 S. Ct. at 1949) (quotations omitted). The Twombly Court

expressly cautioned against allowing expensive and time-consuming litigation to proceed

3
While the Complaint states that “[t]hese multi-million dollar modifications were described in
the notices of violation dated January 26, 2010 and October 14, 2010” (Compl. at ¶¶ 65, 71), the notices
of violation do not provide any more detail than the Complaint. See Exhibits A and B hereto.
4
Throughout this brief, and unless otherwise indicated, all emphasis has been supplied.

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without more than these inadequate allegations. Twombly, 550 U.S. at 557-58, 127 S. Ct. at

1966; see also NicSand, Inc. v. 3M Co., 507 F.3d 442, 450 (6th Cir. 2007). Twombly dealt with

antitrust litigation, but NSR litigation is equally resource-intensive.5

Because of this total failure to plead any facts, the Court should dismiss the Complaint in

its entirety.

B. In the Alternative, The PSD Penalty Claims Should Be Dismissed.

If the Complaint is not dismissed in its entirety, then the Court should dismiss the claims

for statutory penalties that are based on alleged violations of the PSD program. (Compl. ¶¶ 68,

74). The statute of limitations on those claims is five years, and as shown above, construction on

all the Projects took place, and thus those claims accrued, more than five years ago. In a recent

decision on this precise issue, the Eighth Circuit held that PSD claims for civil penalties

regarding projects that began construction outside the statute of limitations period are time-

barred. See Sierra Club v. Otter Tail Power Co., 615 F.3d 1008 (8th Cir. 2010).

1. The Relevant Statute of Limitations is Five Years.

The CAA contains no statute of limitations, but it is well-accepted that the general five-

year federal limitations period set forth in 28 U.S.C. § 2462 applies to CAA enforcement actions,

including those asserting alleged NSR violations. See, e.g., Otter Tail, 615 F.3d at 1013-14;

United States v. Cinergy Corp., 397 F. Supp. 2d 1025, 1030 (S.D. Ind. 2005); 28 U.S.C. § 2462.

The five-year statute of limitations under Section 2462 runs from the “date when the claim first

5
In previous NSR cases, the Plaintiff typically has sought dozens of fact depositions and
expansive written discovery. See, e.g., Discovery Plan in U.S. v. Louisiana Generating LLC, (Exhibit C
hereto) (providing for up to 40 fact depositions, 100 interrogatories and 100 requests for admission); Rule
26(f) Report in Allegheny Energy NSR case (Exhibit D hereto) at 14 (noting that in U.S. v. Duke Energy,
liability discovery alone resulted in 4.6 million pages of documents produced, 56 depositions, 18 expert
witnesses, 370 document requests, 419 interrogatories and 1,854 requests for admissions.)

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accrued.” 28 U.S.C. § 2462. A claim first accrues on the date a violation first occurs. Otter

Tail, 615 F.3d at 1014 (a claim first accrues “as soon as the right to institute and maintain a suit

arises.”) (quotation and citation omitted). As discussed below, the alleged violations occur, and

thus the claims for such violations accrue, at the time of construction. Here, the alleged

violations occurred, if at all, no later than 2004, when the last of the Projects concluded. (Compl.

at ¶¶ 65, 71.) The Complaint was filed in 2011. The Projects are well outside the limitations

period.

2. Any Obligation to Obtain a PSD Construction Permit Begins and


Ends at the Time of Construction.

The issue of when a PSD construction permitting claim accrues is a “pure question of

statutory interpretation.” Otter Tail, 615 F.3d at 1014. Where the plain language of a statute is

unambiguous, no further inquiry is necessary and a court must simply give effect to its clear

meaning. See New York v. Niagara Mohawk Power Corp., 263 F. Supp. 2d 650, 658 (W.D.N.Y.

2003) (citing Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999)).

The plain language of the federal PSD statute, 42 U.S.C. § 7475, creates permitting

obligations that begin and end at the time of construction. Entitled “Preconstruction

requirements,” Section 7475 requires that “[n]o major emitting facility...may be constructed in

any area” unless the conditions in subsections (a)(1)-(8) are satisfied. 42 U.S.C. § 7475(a).

Those conditions identify requirements that are applicable prior to, or at the time of,

construction. See, e.g., 42 U.S.C. § 7475(a)(1) (requiring that a “permit has been issued for such

proposed facility...”); 42 U.S.C. § 7475(a)(3) (the owner or operator of the proposed facility

must “demonstrate[]...that emissions from construction or operation of such facility will not

cause, or contribute to, air pollution...”); 42 U.S.C. § 7475(a)(4) (the “proposed facility is subject

to the best available control technology”); see also Niagara Mohawk, 263 F. Supp. 2d at 661

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(permitting requirements occur at the time of construction). Consistent with the statutory

language, U.S. EPA’s own regulations implementing the PSD program also create permit

obligations only at the time of construction. See 40 C.F.R. § 52.21(a)(2)(i) (the requirements of

the PSD regulations “apply to the construction of...any project at an existing major stationary

source”); 40 C.F.R. § 52.21(a)(2)(iii) (“no...major modification...shall begin actual construction

without a permit that states that the...major modification will meet those requirements”).

At all relevant times, the Missouri SIP has contained a construction permitting program

that implemented the federal PSD program. See 10 C.S.R. §§ 10-6.060 (Construction Permit

program); 10-6.060(8) (PSD program). Like the federal PSD program, the plain language of the

Missouri PSD rules set forth requirements that arise only at the time of construction.

Specifically, Missouri’s construction permit program “establishes requirements to be met prior to

construction or modification of any of these sources,” and sources subject to Missouri’s

construction permit program may not “commence construction or modification…[or] begin

operation after that construction or modification…without first obtaining a permit….” 10 C.S.R.

§§ 10-6.060, 10-6.060(1)(C). Notably, the regulation specifically refers to “begin[ning]

operation after the modification – not “operating” generally. The specificity of the regulatory

language shows that a source’s obligation to obtain a preconstruction permit exists only during

the period from when construction commences to the point that construction ends and operation

begins. Accord Otter Tail, 615 F.3d at 1017-18.

Moreover, Missouri’s PSD rules all address pre-construction requirements. See, e.g., 10

C.S.R. §§ 10-6.060(8)(B)2 (“The requirement for BACT in the case of a major modification

shall apply to the physical change(s)…contained in the [construction] permit application…”),

10-6.060(8)(B)3 (BACT determination is reviewed at the “latest reasonable time prior to

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commencement of construction”), 10-6.060(8)(C)1.A (regarding pre-application modeling and

monitoring, “[e]ach [construction permit] application shall contain an analysis of ambient air

quality…”).

While the failure to obtain a required PSD construction permit may have consequences

that extend into the future, such consequences do not create PSD violations that extend into the

future indefinitely. There is a critical distinction between “the ‘present consequences of a one-

time violation,’ which do not extend the limitations period, and ‘a continuation of a violation into

the present,’ which does.” Nat’l Parks & Conservation Assoc., Inc. v. Tennessee Valley Auth.,

502 F.3d 1316, 1322 (11th Cir. 2007) (citation omitted) (applying statute of limitations to bar

claim for civil penalties in NSR case); Niagara Mohawk, 263 F. Supp. 2d at 660-63 (same).

Thus, any allegations of present ill effects from any past NSR violation are “not sufficient to

bring . . . [the] New Source Review claims within the five-year statute of limitations, which

serves several important purposes including barring stale claims and protecting expectations that

have settled over time.” Nat’l Parks, 502 F.3d at 1326.

The Eighth Circuit’s decision in Otter Tail definitively answered the question of whether

the PSD program requirements (and thus, any violation thereof) extend beyond the period of

construction. There, the plaintiff argued that because an issued PSD permit could create

obligations that governed future operation of the defendant’s power plant, the failure to obtain a

PSD permit created a continuing violation during operation, long after the alleged modification.

The Eighth Circuit, construing a provision from South Dakota’s SIP parallel to that here, rejected

plaintiff’s argument, explaining that while the defendant may have violated the PSD program

“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

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through the permitting process.” Otter Tail, 615 F.3d at 1016. The Eighth Circuit further

explained that just because emission limitations are typically set during the preconstruction

permit process, that “does not necessarily mean that such parameters are enforceable

independent of the permitting process.” Id. at 1017. Accordingly, the court dismissed the

alleged PSD violations because they occurred only once, if at all, more than five years before the

complaint was filed. The Otter Tail decision has strong support from numerous other courts.6

The analysis and conclusion are the same under the Missouri SIP. As shown above,

Missouri SIP’s PSD preconstruction permitting requirements all arise only at the time of

construction. Moreover, construing this language to apply to continued operation after

construction – a prohibition not imposed by the federal PSD program – would be inconsistent

6
See, e.g., Nat’l Parks & Conservation Assoc. v. Tennessee Valley Auth., 502 F.3d 1316, 1326
(11th Cir. 2007); Sierra Club v. Duke Energy Ind., Inc., No. 1:08-cv-437, 2010 WL 3667002, at *6 (S.D.
Ind. Sept. 20, 2010) (applying Otter Tail and holding that any violation for failure to obtain a PSD permit
occurs only at the time of the modification that triggered PSD); United States v. Midwest Generation,
LLC, 694 F. Supp. 2d 999, 1008 (N.D. Ill. 2010) (“a violation of 42 U.S.C. § 7475 occurs at the time of
construction and no later”); Pennsylvania v. Allegheny Energy, Inc., No. Civ. A. 05-885, 2006 WL
1509061, at *4 (W.D. Pa. Apr. 19, 2006) (“failure to comply with the CAA’s preconstruction permit
requirements is a discrete event, which is not subject to the continuing violation doctrine”); United States
v. Cinergy Corp., 397 F. Supp. 2d 1025, 1030 (S.D. Ind. 2005) (“[e]ach of the alleged violations was
complete at the time each [project] was complete”); New York v. Niagara Mohawk, 263 F. Supp. 2d 650,
661 (W.D.N.Y. 2003) (“Once the construction or modification is complete, the window in which to apply
for and obtain a preconstruction permit is gone. Thus, a violation of the [CAA’s] preconstruction permit
requirement is singular in nature, and does not constitute an ongoing violation.”); United States v. Illinois
Power Co., 245 F. Supp. 2d 951, 956 (S.D. Ill. 2003) (“preconstruction permit violations do not constitute
violations that continue past the completion of construction”); United States v. S. Ind. Gas & Elec. Co.,
No. IP 99-1692, 2002 WL 1760752, at *5 (S.D. Ind. July 26, 2002) (“a violation of 42 U.S.C. § 7475
occurs when construction is commenced, but does not continue on past the date when construction is
complete”); United States v. Westvaco Corp., 144 F. Supp. 2d 439, 443 (D. Md. 2001) (“preconstruction
permit violations occur only at the time of the construction or modification of the emitting facility”);
United States v. Murphy Oil USA, Inc., 143 F. Supp. 2d 1054, 1083-84 (W.D. Wis. 2001) (the statute of
limitations period “begins to run at the time of construction and does not continue through the operational
life of the modified source”); but see Otter Tail, 615 F.3d at 1017 (noting that the 6th Circuit in Nat’l
Parks & Conservation. Assoc., Inc. v. Tennessee Valley Auth., 480 F.3d 410 (6th Cir. 2007), found that a
violation of the PSD program is a continuing violation; but distinguishing that decision on the ground that
the 6th Circuit relied upon the presence of a state regulatory program unique to Tennessee that explicitly
allowed for a determination of BACT emission limits after the time of construction). Like the South
Dakota SIP at issue in Otter Tail, the Missouri SIP contains no such provisions allowing post-
construction permitting.

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with the plain language of the Missouri SIP. Missouri law expressly prohibits the adoption of

regulations more stringent than their federal counterparts. See MO. Rev. Stat. § 643.055(1)

(2010) (“The standards and guidelines so established shall not be any stricter than those required

under the provisions of the federal Clean Air Act, as amended...”).

The Complaint makes a tepid allegation that seems to suggest that the statute of

limitations should be tolled because U.S. EPA did not “discover” the Projects until 2008, when it

began a compliance investigation of Ameren Missouri. (Compl. ¶ 62.) If that is indeed what is

alleged, that allegation fails as a matter of law, for at least three reasons.

First, as shown above, the CAA places the primary responsibility for its enforcement on

state and local governments. Public Citizen, Inc., 343 F.3d at 453. Even though MDNR has

primary enforcement responsibility, and MDNR and U.S. EPA work hand-in-hand, the

Complaint fails to allege that MDNR did not know about the Projects. Second, the allegation

itself is insufficient. The Complaint does not allege, nor could it allege, the existence of any duty

that Ameren Missouri owed to U.S. EPA to provide any information about work projects. And

while the Complaint ominously alleges that the Projects “only came to light” during the Section

114 investigation, the Complaint admits that before 2008, U.S. EPA did nothing – did not even

try – to seek information about Rush Island or the Projects. (Compl. at passim.) In other words,

as soon as U.S. EPA asked about the Projects, it received the information.

Third, the Complaint appears to allege that the statute should be tolled because U.S. EPA

is overburdened and cannot be expected to investigate compliance on a timely basis. (Compl. at

¶ 62 (“U.S. EPA is charged with oversight [of] thousands of major sources of air pollution in the

nation.”). EPA has made that argument and it has been rejected before. In 3M Co. v. Browner,

17 F.3d 1453, 1460 (D.C. Cir. 1994), U.S. EPA suggested such a “discovery of violation” rule

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should apply to 28 U.S.C. § 2462. The D.C. Circuit forcefully rejected that argument with

reasoning that applies foursquare here:

We therefore cannot agree with EPA that our interpretation of § 2462 ought to be
influenced by EPA’s particular difficulties in enforcing TSCA. ... An agency may
experience problems in detecting statutory violations because its enforcement
effort is not sufficiently funded; or because the agency has not devoted an
adequate number of trained personnel to the task; or because the agency’s
enforcement program is ill-designed or inefficient; or because the nature of the
statute makes it difficult to uncover violations; or because of some combination
of these factors and others. ... We seriously doubt that conducting ... judicial
hearings to determine whether an agency’s enforcement branch adequately lived
up to its responsibilities would be a workable or sensible method of
administering any statute of limitations. Nor do we understand how any of this
relates to the reasons why we have a statute of limitations in penalty cases. An
agency’s failure to detect violations, for whatever reasons, does not avoid the
problems of faded memories, lost witnesses and discarded documents in penalty
actions brought decades after alleged violations are finally discovered. Most
important, nothing in the language of § 2462 even arguably makes the running of
the limitations period turn on the degree of difficulty an agency experiences in
detecting violations.

3M Co. v. Browner, 17 F.3d 1453, 1461 (D.C. Cir. 1994) (emphasis supplied); see also Sierra

Club v. Otter Tail Corp., 608 F. Supp. 2d 1120, 1128 (D.S.D. 2009) (quoting 3M and dismissing

NSR claims as time-barred). The Court should dismiss the PSD penalty claims as time-barred.

C. In the Alternative, Certain Title V Penalty Claims Should Be Dismissed.

Even if the Court declines to dismiss the entire Complaint, certain of the Title V claims

should be dismissed. Counts III and IV assert that certain provisions of Ameren Missouri’s Title

V permit were violated by the same conduct that gave rise to the alleged PSD violations.

Because any alleged PSD violation occurred at the time of the Projects, any alleged Title V

violation occurred, if at all, at the same time.

In contrast to PSD permits, which deal with modifications, Title V permits deal with

operation of the emissions source. Rush Island is subject to Missouri’s Title V program. See 10

C.S.R. § 10-10.065(6). Importantly, a Title V permit does not impose, and cannot be used to

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impose, any new requirements on the permit holder, such as emission limitations. Final Rule, 57

Fed. Reg. 32250, 32251 (July 21, 1992); 10 C.S.R. § 10-6.065; Appalachian Power Co. v. EPA,

208 F.3d 1015, 1026-1027 (D.C. Cir. 2000). “[O]perating permits required by Title V are meant

to accomplish the largely procedural task of identifying and recording existing substantive

requirements applicable to regulated sources and to assure compliance with these existing

requirements.” EPA, Office of Air Quality Planning and Standards, White Paper for Streamlined

Development of Part 70 Permit Applications, at 1 (July 10, 1995). Title V operating permits

contain only those requirements applicable “at the time of issuance” of the Title V operating

permit. 10 C.S.R. § 10-6.065(6)(C)1. At the time of the Projects, Rush Island was operating

under an approved Title V operating permit. (Compl. ¶ 46.) The Complaint alleges that Ameren

Missouri violated that permit by (1) not obtaining pre-construction PSD permits before

beginning the Projects (Compl. ¶¶ 48, 80, 89); and (2) not disclosing its alleged PSD non-

compliance in the permit’s annual compliance certification (Compl. ¶¶ 49, 79, 88).7

As to the first category of claims, a Title V permit serves to collect all “existing

substantive requirements applicable” to a source – but does not impose any new substantive

requirements. See 57 Fed. Reg. 32251. Accordingly, any claim that Ameren Missouri violated

the Title V permit’s provision regarding PSD construction permits is merely a restatement of the

PSD claims, and is time-barred, for the same reasons.

The second category of penalty claims is also time-barred because any alleged

certification violation occurred, if at all, only once: at the time of construction. The Rush Island

7
The Complaint makes two other Title V claims for penalties: (a) failing to include a compliance
schedule for PSD requirements allegedly applicable as a result of the Projects; and (b) failing to
supplement or correct the Title V permit to include such alleged requirements. (Compl. at ¶¶ 77, 86.)
This motion is not directed to those claims, but Ameren Missouri is considering a motion to dismiss those
claims as unripe, pursuant to Federal Rule of Civil Procedure 12(b)(1).

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Title V permit requires that Ameren Missouri annually certify its “current compliance status.”

See 10 C.S.R. §§ 10-6.065(6)(C)3.E.(I), 10-6.065(6)(C)3.E.(III)(b). Because this obligation is

not cumulative of prior years, any violation of a reporting obligation, such as a compliance

certification, is a discrete event that only occurs at the time the report is due. Id.; Otter Tail, 615

F.3d 1016-18.8 Therefore, even assuming Ameren Missouri was in non-compliance with a term

of its Title V operating permit for not obtaining a PSD pre-construction permit, only its

certification for the year in which the PSD violation allegedly occurred (i.e., the year the Project

was begun) was required to identify that non-compliance. Id. Thus, any alleged failure to

identify such non-compliance occurred, if at all, more than five years ago and is time-barred.

Otter Tail, 615 F.3d at 1018.

V. CONCLUSION

The Court should dismiss the Complaint in its entirety. In the alternative, the Court

should dismiss the claims for civil penalties that relate to: (1) all PSD claims (Compl. ¶¶ 68, 74);

(2) Title V claims that allege a violation of the Title V operating permit’s provision that

references PSD (Compl. ¶¶ 48, 80, 83, 89 and 92); and (3) Title V claims that allege a violation

of the Title V operating permit’s compliance certification provision (Compl. ¶¶ 77, 83, 88 and

92).

8
See also United States v. E. Ky. Power Coop., Inc., 498 F. Supp. 2d 970, 976 (E.D. Ky. 2007)
(finding certain CAA reporting violations to constitute “discrete events that were required at discrete
times” and thus time-barred); United States v. Illinois Power Co., 245 F. Supp. 2d 951, 958 (S.D. Ill.
2003); Atwell v. KW Plastics Recycling Div., 173 F.Supp.2d 1213, 1227-28 (M.D. Ala. 2001) (under
Clean Water Act, a violation of permit’s reporting requirements does not continue until corrected); In re
UMETCO Minerals Corp., No. CAA-113-VIII-92-03, 1996 WL 691531, at * 5 (EPA Mar. 29 1996)
(under CAA’s National Emissions Standards for Hazardous Air Pollutants “a violation is complete” for
limitations purposes as of the date the report is due).

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Dated: March 14, 2011 Respectfully submitted,

/s Patricia Brown Holmes

Ronald S. Safer (pro hac vice)


Patricia Brown Holmes (pro hac vice)
Renee Cipriano (pro hac vice)
Steven J. Bonebrake (pro hac vice)
Matthew B. Mock (pro hac vice)
SCHIFF HARDIN LLP
233 South Wacker Drive, Suite 6600
Chicago, Illinois 60606
(312) 258-5500
Fax: (312) 258-5600

James J. Virtel
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard Suite 1800
St. Louis, Missouri 63105
(314) 621-5070
Fax: (314) 612-2298
jvirtel@armstrongteasdale.com

Counsel for Defendant Ameren Missouri


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CERTIFICATE OF SERVICE

I hereby certify that on March 14, 2011, I electronically filed the foregoing
Memorandum of Law in Support of Its Rule 12(b)(6) Motion to Dismiss with the Clerk of
Court using the CM/ECF system, which will cause an electronic copy to be served on counsel of
record, who are listed below:

Justin A. Savage
Andrew C. Hanson
Bradford T. Mclane
Trial Attorneys
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
P.O. Box 7611
Washington, DC 20044-7611
Telephone: (202) 514-5293
Facsimile: (202) 514-0097

Suzanne Moore
Assistant United States Attorney
United States Attorney’s Office
Eastern District of Missouri
Thomas Eagleton U.S. Courthouse
111 South 10th Street, 20th Floor
St. Louis, Missouri 63102
Telephone: (314) 539-2547
Facsimile: (314) 539-2309

Ilana Saltzbart
Attorney-Advisor
U.S. EPA, Air Enforcement Division
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

Alex Chen
Senior Counsel
Office of Regional Counsel
U.S. EPA, Region 7
901 North 5th Street
Kansas City, Kansas 66101

/s/ Patricia Brown Holmes


Patricia Brown Holmes
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EXHIBIT A
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EXHIBIT B
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY


REGION 7
901 NORTH 5TH STREET
KANSAS CITY, KANSAS 66101

OCT 14 2010

CERTIFIED MAIL
RETURN RECEIPT REQUESTED

Mr. Warner Baxter


President and CEO
AmerenUE
190 I Chouteau Avenue
St. Louis, Missouri 63103

Re: Notice of Violation under Section 113(a)(I) of the Clean Air Act

Dear Mr. Baxter:

Enclosed is an amended Notice of Violation (NOV) issued to AmerenUE under Section


113(a)(I) of the Clean Air Act, 42 U.S.c. § 7413(a)(1). This amended NOV supersedes the one
previously issued to AmerenUE on January 26, 2010. In the NOV, the United States
Environmental Protection Agency (EPA) notifies AmerenUE of violations of pre-construction
permitting and Title V requirements of the Clean Air Act (Act) and the Missouri State
Implementation Plan at its Labadie Plant near Labadie, Missouri; Meramec Plant in St. Louis,
Missouri; Rush Island Plant near Festus, Missouri; and Sioux Plant near West Alton, Missouri.

This NOV does not constitute a waiver of EPA authority to pursue an enforcement action
under Section 11 3 of the Act, or of state or local authority to pursue an enforcement action under
applicable state and local statutes, for any violation addressed herein. The NOV does not affect
AmerenUE's responsibility to comply with any applicable federal, state, or local regulations.
EPA will consider its enforcement options under Section 113 of the Act in further addressing
these matters.

RECYCLE~
..... '0 ...... ......... 0 . ... ..
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If AmerenUE has any questions or wishes to discuss the violations identified in this
NOV, please contact Lisa Hanlon, Air Permitting and Compliance Branch at (913) 551-7599, or
Alex Chen, Office of Regional Counsel, at (913) 551-7962.

Sincerely,

Becky Weber
Director
Air and Waste Management Division

Enclosure

cc w/encl: Sarah Toevs Sullivan, Esq.


Bryan Cave LLP

Susan B. Knowles, Esq.


Ameren Corporation

2
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UNITED STATES ENVIRONMENTAL PROTECTIQN .AGEN~y I I


REGION 7 10 U:'; \ III \)" , : I
901 NORTH FIFTH STREET [;;';;: :: , . , ; 1:,.I ;: CTiQII
KANSAS CITY, KANSAS 66101 !'(, C:': = . " : ~ :: :D: I ViI
n:CI:J:L\L 1; \::·.:~ii:G CLER I\

IN THE MATTER OF:


)
AmerenUE )
) AMENDED NOTICE OF
) VIOLATION
Proceedings Pursuant to Section 113 )
of the Clean Air Act, )
42 U.S.c. §§ 7413 )
)

AMENDED NOTICE OF VIOLATION

This Amended Notice of Violation (NOV) is issued to AmerenUE, for violations of the
Clean Air Act (CAA or Act) at its Labadie Plant near Labadie, Missouri; Meramec Plant in St.
Louis, Missouri; Rush Island Plant near Festus, Missouri; and Sioux Plant near West Alton,
Missouri. Specifically, AmerenUE has violated Title I of the CAA by fai ling to comply with the
Prevention of Significant Deterioration (PSD) requirements of the CAA and the Missouri State
Implementation Plan (SIP); and the Nonattainment New Source Review (NNSR) requirements of
the CAA and the Missouri SIP. AmerenUE has also violated Title V ofthe CAA by failing to
address the PSD provisions of the CAA as applicable requirements in its Title V permits for the
Labadie, Meramec, Rush Island, and Sioux Plants.

This NOV is issued pursuant to Section 113 of the Act, as amended, 42 U.s.C. § 7413.
The authority to issue this Amended NOV has been delegated to the Regional Administrator of
the United States Environmental Protection Agency (EPA), Region 7 and further re-delegated to
the Director, Air and Waste Management Division, EPA, Region 7.

STATUTORY AND REGULATORY BACKGROUND

I. The Clean Air Act is designed to protect and enhance the quality of the nation's air so as
to promote the public health and welfare and the productive capacity of its population. Section
101(b)(J) of the Act, 42 U.S.C. § 7401(b)(I).

A. The National Ambient Air Ouality Standards.

2. Section 108(a) of the Act, 42 US.c. § 7408(a), requires the Administrator of EPA to
identify and prepare air quality criteria for each air pollutant, emissions of which may endanger
public health or welfare, and the presence of which results from numerous or diverse mobile or
stationary sources. For each such " criteria" pollutant, Section 109 of the Act, 42 U.S .C. § 7409,
Case: 4:11-cv-00077-RWS Doc. #: 13-2 Filed: 03/14/11 Page: 5 of 5 PageID #: 90

Meramec Unit 3 2000 Projects


• replaced feed water heater
• underwent condenser retubing
• installed new electrostatic precipitator ducts

Meramec Unit 3 2002-2003 Projects


• up graded coal mill

Meramec Unit 4 1995-1996 Projects


• underwent boiler modifications

Meramec Unit 4 2001-2002 Projects


• upgraded coal mill
• replaced feed water heater
• underwent condenser retubing

Meramec Unit 42005 Projects


• replaced economizer
• associated turbine projects

55. AmerenUE's Rush Island Plant consists of two units, each of which has a heat input
greater than 250 million BTU per hour. The first unit began operations in 1976 and the second
unit began operations in 1977. Between 2001 and 2007, various physical changes or changes in
the method of operation were made at the Rush Island Plant. These changes include, but are not
limited to:

Rush Island Unit 1 2001-2002 Projects


• replaced superheater pendant
• underwent condenser retubing
• replaced ID (induced draft) fan
• associated turbine projects

Rush Island Unit 1 2007 Projects


• replaced economizer, reheater, and lower slope tubes
• replaced air preheater
• associated turbine projects

Rush Island Unit 2 2004 Projects


• modified superheater
• associated turbine projects

Rush Island Unit 2 2010 Projects


• replaced economizer and reheater

1I
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EXHIBIT C
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UNITED STATES DISTRICT COURT


FOR THE MIDDLE DISTRICT OF LOUISIANA

____________________________________
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. ) Civil Action No. 09-CV-100-RET-CN
)
LOUISIANA GENERATING LLC, )
)
Defendant. )
)
____________________________________)

JOINT PROPOSED CASE MANAGEMENT ORDER

Considering the Joint Motion to Enter Proposed Case Management Order and

Memorandum in Support submitted by the Parties,

IT IS ORDERED that the Joint Motion to Enter Proposed Case Management Order is

GRANTED.

IT IS FURTHER ORDERED that the Parties shall be bound by the dates and deadlines

set forth below, which are hereby adopted as the Scheduling Order under Rule 16(b) of the

Federal Rules of Civil Procedure.

SCHEDULING ORDER

A. BIFURCATION

Both discovery and trial will be bifurcated between liability and remedy phases, except
that the parties may proceed with certain remedy discovery during the liability phase to the
extent expressly authorized in this Order. The following deadlines pertain only to actions in the
specific phase to which the deadlines are identified as applicable.

B. LIABILITY PHASE

1. Deadline for amending the complaint, or adding new parties, Completed

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DISCOVERY PLAN

A. Discovery

1. Subjects - Discovery will be needed on the following subjects:

a. The United States’ and LDEQ’s claims against LaGen; and

b. LaGen’s defenses.

2. Definition of “Parties” - For purposes of this Discovery Plan and the discovery

limitations contained herein, the United States and LDEQ shall be considered one party and

LaGen shall be considered one party.

3. Fact Depositions

There will be a maximum of 35 total fact witness depositions (including

depositions pursuant to FRCP 30(b)(6)) by the United States and LDEQ and 35 total fact witness

depositions (including depositions pursuant to FRCP 30(b)(6)) by LaGen. The parties estimate

that they will need 20 depositions each in the liability phase and 15 depositions each in the

remedy phase. If either party takes more than 20 depositions during the liability phase, the

number of depositions allowed for that party in the remedy phase shall be reduced accordingly

such that neither party shall be permitted a total of more than 35 depositions in the case, absent

agreement of the parties or order of the Court for good cause shown.

The parties will make good faith efforts to confer prior to scheduling depositions

and to adhere to any schedules agreed upon by counsel. The parties will adhere to the following

procedures:

a. All officers and employees of parties, who are properly subject to

discovery, will be produced for deposition upon notice of deposition without further process;

b. Each party will use reasonable efforts to make former officers and

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employees, who are properly subject to discovery, available for depositions upon notice of

deposition without subpoena or further process;

c. The time between service of a deposition notice and the date set for the

deposition by that notice must be at least ten business days unless shortened by agreement of the

parties or order of the Court; and

d. Each deposition of a fact witness shall be limited to one day of 7 hours,

excluding breaks, unless extended by agreement of parties or order of the Court.

e. The parties recognize that depositions conducted pursuant to FRCP

30(b)(6), depending on circumstances including the number of topics and deponents, may require

additional time for completion and agree to address the time limitations for each such deposition

on a case-by-case basis.

4. Interrogatories

There will be a maximum of 100 total Interrogatories by the United States and LDEQ and

100 total Interrogatories by LaGen during the liability phase. There will be a maximum of 75

total Interrogatories by the United States and LDEQ and 75 total Interrogatories by LaGen

during the remedy phase.

An interrogatory containing subparts directed at eliciting details concerning a common

theme shall be considered a single question. For example, a question asking about

communications of a particular type will be treated as a single interrogatory even

though it requests that the time, place, persons present, and contents be stated separately for each

such communication. Parties may not evade the limitation on interrogatories by joining as

subparts questions that seek information about discrete separate subjects. Responses shall be

made as required by FRCP 33, unless extended by agreement of the parties or order of the Court.

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5. Document Production Requests

There will be a maximum of 100 total Requests for Production by the United States and

LDEQ and 100 total Requests for Production by LaGen during the liability phase. There will be

a maximum of 100 total Requests for Production by the United States and LDEQ and 100 total

Requests for Production by LaGen during the remedy phase.

Responses to document production requests shall be made as required by FRCP 34,

unless extended by agreement of the parties or order of the Court. The parties shall produce all

documents responsive to a request for production as follows:

a. Unless other arrangements are made consistent with FRCP 34, the party

upon whom the request is served shall provide copies of documents responsive to the

request to the other party. Unless otherwise agreed, one set of copies shall be provided.3

However, either party may request to inspect the originals of any document produced or,

in the case of electronically stored information, may request to inspect or receive the

electronically stored information in native format. The party providing the documents

responsive to the request shall assume all copying fees;

b. To the extent that electronically stored information is the subject of

discovery in this action, the Parties agree to meet and confer and to agree upon the form or forms

of production of that information; and

c. Except as agreed upon in the Stipulation Regarding Preservation, Review

and Production of Certain Electronically Stored Information and Privileged Materials

3
Unless otherwise agreed, the parties shall provide one set of copies on CD-ROM, with each CD-ROM
containing the following: images in single page Tiff format; a text file containing start Bates/end Bates for
each document; and a cross reference file in Opticon log file format containing the start Bates, CD
volume, and the full path to the image (assumes E as CD drive), with document breaks indicated by at
"Y" at the end of the record.

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(Dkt. No. 51), all parties are ordered to preserve all records in their possession that are or

may be material to this litigation consistent with applicable law until the conclusion of

this litigation or until otherwise ordered by this Court.

6. Requests for Admissions

There will be a maximum of 100 total Requests for Admissions by the United States and

LDEQ and 100 total Requests for Admissions by LaGen during the liability phase. There will be

a maximum of 75 total Requests for Admissions by the United States and LDEQ and 75 total

Requests for Admissions by LaGen during the remedy phase. The foregoing limitations shall not

apply to Requests for Admissions directed solely at authentication of a document.

Responses to requests for admissions shall be made as required by FRCP 36, unless

extended by agreement of the parties or order of the Court.

B. Expert Discovery

Notwithstanding any provision in the FRCP to the contrary, the following terms apply to

both the production of documents under Rule 26(a)(2)(B), Rule 34, and Rule 45, and to the

timing and scope of expert deposition testimony.

1. At the time of submission of the expert reports, the parties will identify “the data

or other information considered by the witness in forming his or her opinions,” in accordance

with FRCP 26(a)(2). For the purpose of this Discovery Plan, except as noted below, “considered

documents” shall be those documents that have been received and read or reviewed during the

preparation of his or her expert report, furnished to the expert to be used in forming opinions

(other than those determined to be not relevant after a cursory review), or taken into account by

the expert during the preparation of his or her expert report, regardless of whether the expert

actually relies upon the document in forming his or her opinion. “Considered documents”

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Case 3:09-cv-00100-RET-CN Document 71-3 04/23/10 Page 8 of 12
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EXHIBIT D
Case: 4:11-cv-00077-RWS
Case 2:05-cv-00885-GLL
Doc. #:
Document
13-4 Filed:
58 03/14/11
Filed 07/19/06
Page:Page
2 of 31PageID
of 23 #: 98

IN THE UNITED STATES DISTRICT COURT


FOR THE WESTERN DISTRICT OF PENNSYLVANIA

------------------------------------------------------------- x
COMMONWEALTH OF PENNSYLVANIA, :
DEPARTMENT OF ENVIRONMENTAL :
PROTECTION, STATE OF CONNECTICUT, :
STATE OF MARYLAND, STATE OF NEW : ECF Case
JERSEY, and STATE OF NEW YORK, : Electronically Filed
:
Plaintiffs, :
: Civil Action No. 2:05cv0885
v. :
: Judge Terrence F. McVerry
ALLEGHENY ENERGY, INC., ALLEGHENY : Magistrate Judge Robert C. Mitchell
ENERGY SERVICE CORPORATION, :
ALLEGHENY ENERGY SUPPLY COMPANY, :
LLC, MONONGAHELA POWER COMPANY, :
THE POTOMAC EDISON COMPANY, and :
WEST PENN POWER COMPANY, :
:
Defendants. :
------------------------------------------------------------- x

Rule 26(f) Report of the Parties


Case: 4:11-cv-00077-RWS
Case 2:05-cv-00885-GLL
Doc. Document
#: 13-4 Filed:
58 Filed
03/14/11
07/19/06
Page:Page
3 of 3
15PageID
of 23 #: 99

bifurcation is logical and consistent with the ordered administration of justice. The key elements

that Plaintiffs must establish to demonstrate Defendants’ liability for undertaking alleged

modifications are separate and apart from remedy issues, and the resolution of Defendants’

alleged liability will likely narrow or obviate the need for discovery and trial on remedy issues,

thereby saving the Court and the parties additional time and needless expense. Indeed,

experience has shown this to be the case.

This case is part of a nationwide “NSR enforcement initiative” launched in 1999 by the

United States Environmental Protection Agency. Several of the plaintiffs in this action joined in

as plaintiff-intervenors in the enforcement initiative. The majority rule in the enforcement

initiative has been to bifurcate liability issues from remedy issues, which has led to the successful

resolution of several cases.

In United States v. Duke Energy Corp., Civ. No. 1:00CV01262 (M.D.N.C.), the parties

agreed to bifurcate the case between liability and remedy phases. Discovery on liability consisted

of 4.6 million pages of documents produced, 56 depositions, 18 expert witnesses, 370 document

requests, 419 interrogatories and 1,854 requests for admissions—all of which took approximately

two years. Following liability discovery, the court issued a summary judgment ruling on the

legal standards applicable to the EPA’s claims. EPA then stipulated to certain facts, which

allowed the district court to enter final judgment Duke Energy’s favor. No remedy discovery or

trial was ever conducted.

In United States v. Ohio Edison Co. et al., 99CV1181 (S.D. Ohio), where New York,

Connecticut and New Jersey participated as co-plaintiffs, the case was again bifurcated between

liability and remedy. Liability discovery alone encompassed the production of several million

14