Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

State v. Reliant Energy Mid-Atlantic Power Holdings

September 30, 2009

STATE OF NEW JERSEY, PLAINTIFF
v.
RELIANT ENERGY MID-ATLANTIC POWER HOLDINGS, LLC, RELIANT ENERGY POWER GENERATION, INC., SITHE ENERGIES, INC., NOW KNOWN AS DYNEGY, INC., AND METROPOLITAN EDISON CO., DEFENDANTS AND STATE OF CONNECTICUT, INTERVENOR-PLAINTIFF
v.
RELIANT ENERGY MID-ATLANTIC POWER HOLDINGS, LLC, RELIANT ENERGY POWER GENERATION, INC., SITHE ENERGIES, INC., NOW KNOWN AS DYNEGY, INC., AND METROPOLITAN EDISON CO., INTERVENOR-DEFENDANTS



The opinion of the court was delivered by: James Knoll Gardner, United States District Judge

OPINION

This matter is before the court on the Motion to Dismiss Counts 1-5 and 7-11 of New Jersey's First Amended Complaint Submitted by Defendants Reliant Mid-Atlantic Power Holdings, LLC, Reliant Power Generation, Inc., and Sithe Energies, Inc., which motion was filed February 19, 2009; Defendant Metropolitan Edison Company's Motion to Dismiss Plaintiff New Jersey's First Amended Complaint, which motion was filed February 19, 2009; Defendant Metropolitan Edison Company's Motion to Dismiss Plaintiff-Intervenor Connecticut's Complaint-in-Intervention, which motion was filed April 23, 2009; and Motion to Dismiss Counts 1-5 and 7-11 of Plaintiff-Intervenor Connecticut's Complaint-in-Intervention Submitted by Defendants Reliant Mid-Atlantic Power Holdings, LLC, Reliant Power Generation, Inc., and Sithe Energies, Inc., which motion was filed April 27, 2009. For the following reasons, I grant each motion in part and deny it in part, and dismiss each of defendant Metropolitan Edison's motions in part as moot.

JURISDICTION

Jurisdiction in this case is based upon federal question jurisdiction pursuant to 28 U.S.C. § 1331.

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391(b) because the events giving rise to plaintiff's claims allegedly occurred in Northampton County, Pennsylvania, which is located within this judicial district.

PROCEDURAL HISTORY

Plaintiff, the State of New Jersey, initiated this action on December 18, 2007 by filing an eight-count civil Complaint against Reliant Energy Mid-Atlantic Power Holdings, LLC, Reliant Energy Power Generation, Inc., Reliant Energy, Inc., Centerpoint Energy, Sithe Energies, Inc., Metropolitan Edison Co., and GPU, Inc. The claims arose from defendants' alleged construction or operation of the Portland Generating Station ("Portland plant" or "the Plant"), a coal-fired power plant located in Upper Mount Bethel Township, Northampton County, Pennsylvania, across the Delaware River from Warren County, New Jersey. Specifically, plaintiff's claims arose from the construction or operation of the Portland plant without permits required by the Clean Air Act ("the Act"), 42 U.S.C. §§ 7470-7503, and the Pennsylvania State Implementation Plan, which incorporates the federal program at 40 C.F.R. Part 52, Subpart NN, §§ 52.2020-52.2063.

On March 14, 2008, defendants filed motions to dismiss plaintiff's Complaint. By Orders dated March 27, 2008, I approved the parties' stipulations to dismiss defendants Reliant Energy, Inc., Centerpoint Energy, and GPU, Inc. without prejudice for plaintiff to rename them as defendants in this matter or to file subsequent complaints against them. Plaintiff responded to the motions to dismiss on April 4, 2008.

By Order dated October 14, 2008, I approved two stipulations indicating defendants' consent to the filing of an amended complaint in this matter, dismissed the pending motions to dismiss as moot, and directed plaintiff to file an amended complaint on or before November 5, 2008.

On November 5, 2008, plaintiff filed a motion for leave to file its First Amended Complaint. I granted that motion by Order dated November 25, 2008 and directed plaintiff to do so by December 10, 2008.

On December 4, 2008, plaintiff New Jersey filed its eleven-count First Amended Complaint against defendants Reliant Energy Mid-Atlantic Power Holdings, LLC., Reliant Energy Power Generation, Inc., Sithe Energies, now known as Dynegy, Inc., and Metropolitan Edison Co. On February 19, 2009, defendants Reliant Energy Mid-Atlantic Power Holdings, LLC., Reliant Energy Power Generation, Inc., and Sithe Energies (collectively "Reliant and Sithe") timely filed its within motion to dismiss Counts One through Five and Seven through Eleven of plaintiff New Jersey's First Amended Complaint. That same day, Metropolitan Edison Co. ("Met Ed") timely filed its motion to dismiss New Jersey's First Amended Complaint. New Jersey responded in opposition to each motion on March 23, 2009. On May 29, 2009, with leave of court, Reliant and Sithe filed a reply memorandum in support of their within motion to dismiss.

On October 31, 2008, the State of Connecticut filed a motion to intervene. By Order dated March 24, 2009, I granted the motion and directed Connecticut to conform its complaint-in-intervention to New Jersey's First Amended Complaint and to file it on or before April 3, 2009.

On April 3, 2009, Connecticut filed its complaint-in-intervention, styled "Amended Complaint", against the Reliant and Sithe defendants and Met Ed.*fn1

On April 23, 2009, Met Ed filed its motion to dismiss Connecticut's Complaint-in-Intervention. On April 27, 2009, Reliant and Sithe filed their within motion to dismiss Counts 1-5 and 7-11 of the Complaint-in-Intervention. Connecticut responded in opposition to each motion on May 18, 2009.

New Jersey's First Amended Complaint and Connecticut's Complaint-in-Intervention assert identical claims, which are discussed more fully below. In essence, Counts 1-10 of the complaints allege that at various times from 1982 to 2005, Met Ed, Reliant and/or Sithe modified units of the Portland plant, resulting in increased emissions, without first obtaining permits required by the Prevention of Significant Deterioration ("PSD") provision of the Act and implementing regulations, and Pennsylvania's operating permit program, 25 Pa. Code § 127.83. Those counts further allege that no defendant subsequently obtained permits regarding such modifications.

Count 11 of each complaint alleges that defendants operated or continue to operate the Portland plant in violation of Pennsylvania's operating permit program regulation, 25 Pa.Code § 127.503, established by Title V of the Act, 42 U.S.C. §§ 7661-7661f. Specifically, the states aver that defendants' ongoing operating permit applications have failed to include relevant and required information about the modifications made to the Portland plant.

All four motions to dismiss the states' complaints seek dismissal pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. On June 1, 2009, I heard oral argument on the four motions to dismiss, and took the matter under advisement. Hence this Opinion.

STANDARD OF REVIEW

Rule 12(b)(1) of the Federal Rules of Civil Procedure provides, in pertinent part:

Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except the following defenses may at the option of the pleader be made by motion: (1) lack of jurisdiction over the subject matter....

Pursuant to Rule 12(b)(1), a party may assert either a facial or factual challenge concerning whether the District Court properly has subject matter jurisdiction over the matter. Gould Electronics Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). A challenge to a complaint for failure to allege subject matter jurisdiction is known as a "facial" challenge.

When a defendant's motion presents a facial challenge, the court must treat the allegations of the complaint as true and draw all inferences favorable to the plaintiff. NE Hub Partners, L.P. v. CNG Transmission Corporation, 239 F.3d 333, 342 (3d Cir. 2001); see also Fed.R.Civ.P. 8(f).

Dismissal pursuant to a 12(b)(1) facial challenge is proper only where the court concludes that the claims clearly appear to be immaterial and made solely for the purpose of obtaining jurisdiction, or are wholly insubstantial and frivolous. In other words, the claims must be "so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy." Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1408-1409 (3d Cir. 1991) (internal citations omitted).

Because a court need not find a claim wholly frivolous or insubstantial in order to dismiss it under Rule 12(b)(6), the threshold to withstand a Rule 12(b)(1) motion to dismiss is significantly lower than that under Rule 12(b)(6). Kehr Packages, Inc., 926 F.2d at 1409 (citing Lunderstadt v. Colafella, 885 F.2d 66, 70 (3d Cir. 1989)). However, this lower threshold does not relieve plaintiff (as the party invoking jurisdiction) of its burden to demonstrate that this action is properly in federal court. Samuel-Bassett v. Kia Motors America, Inc., 357 F.3d 392, 396 (3d Cir. 2004).

A claim may be dismissed under Federal Rule of Civil Procedure 12(b)(6) for "failure to state a claim upon which relief can be granted". A 12(b)(6) motion requires the court to examine the sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80, 84 (1957) (abrogated in other respects by Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Ordinarily, a court's review of a motion to dismiss is limited to the contents of the complaint, including any attached exhibits. See Kulwicki v. Dawson, 969 F.2d 1454, 1462 (3d Cir. 1992).

Except as provided in Federal Rule of Civil Procedure 9, a complaint is sufficient if it complies with Rule 8(a)(2). That rule requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to give the defendant fair notice of what the claim is and the grounds upon which it rests. Twombly, 550 U.S. at 555, 127 S.Ct. at 1964, 167 L.Ed.2d at 940.

Additionally, in determining the sufficiency of a complaint, the court must accept as true all well-pled factual allegations and draw all reasonable inferences therefrom in the light most favorable to the non-moving party. Worldcom, Inc. v. Graphnet, Inc., 343 F.3d 651, 653 (3d Cir. 2003). Nevertheless, a court need not credit "bald assertions" or "legal conclusions" when deciding a motion to dismiss. In re Burlington Coat Factory Securities Litigation, 114 F.3d 1410, 1429-1430 (3d Cir. 1997).

In considering whether the complaint survives a motion to dismiss, both the District Court and the Court of Appeals review whether it "contain[s] either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562, 127 S.Ct. at 1969, 167 L.Ed.2d at 944 (quoting Car Carriers, Inc. v. Ford Motor Company, 745 F.2d 1101, 1106 (7th Cir. 1984) (emphasis in original).

FACTS

Based upon the averments in plaintiff New Jersey's First Amended Complaint and intervenor-plaintiff Connecticut's First Amended Complaint-in-Intervention, which I must accept as true under the foregoing standards of review, and drawing all reasonable inferences from those facts in the light most favorable to the non-moving party, as I am also required to do, the pertinent facts are as follows.

The Portland plant is located on the Delaware River in Upper Mount Bethel Township, Northampton County, Pennsylvania. It includes five electricity-generating units. Units 1 and 2 each consist of one coal-fired boiler and one steam turbine. Units 3, 4 and 5 each consist of a combustion turbine which burns natural gas or oil.

Met Ed was the first owner and operator of the Portland plant, and owned and operated it until November 1999. From November 1999 to May 2000, the Plant was owned and operated by Sithe Energies, Inc. In May 2000, the Plant was purchased by Reliant Energy, Inc., which is the parent company to Reliant Energy Mid-Atlantic Power Holdings, Inc. (formerly Sithe Pennsylvania Holdings LLC) and Reliant Energy Power Generation, Inc. Reliant Energy, Inc. and Reliant Energy Mid-Atlantic Power Holdings, Inc. have owned and operated the Plant since May 2000.

The Portland plant is upwind and directly across the Delaware River and state line from Warren County, New Jersey. As a byproduct of the production of electricity and as a result of its operations, the Portland plant emits air pollutants including sulfur dioxide, nitrogen oxides, and particulate matter. These pollutants are associated with adverse environmental impacts, including contribution to acid rain and creation of ozone and fine particulate matter, and adverse health effects, including exacerbation of respiratory illnesses. Prevailing winds carry these air pollutants from the Portland plant to New Jersey and Connecticut, where they have caused and continue to cause harm to the air quality, citizens, and environments of both states.

At various times, defendants made modifications to Units 1 and 2 of the Portland plant, resulting in increased emissions of air pollutants, without first undergoing preconstruction review procedures required by the Clean Air Act's PSD (prevention of significant deterioration) provisions.

Specifically, MetEd replaced approximately 1,000 waterwall and waterwall slope tubes on Unit 1 during planned outages between 1983 and 1988 ("first Unit 1 physical changes"), as set forth in Count 1 of each complaint; replaced the entire high temperature superheater outlet header and 54 tubes in the radiant economizer on Unit 1 in 1986 ("second Unit 1 physical changes"), as set forth in Count 2 of each complaint; replaced 35 outlet header nipples on Unit 1 in 1982 ("third Unit 1 physical changes"), as set forth in Count 3 of each complaint; and replaced additional boiler waterwall tubes on Unit 1 in 1992 ("fourth Unit 1 physical changes"), as set forth in Count 5 of each complaint.

Additionally, during planned outages between 1980 and 1989, Met Ed replaced major portions of the waterwall and the waterwall slope tubes on Unit 2 ("first Unit 2 physical changes"), as set forth in Count 7 of each complaint. During that same period, Met Ed also replaced substantial portions of the reheater section of the boiler on Unit 2 ("second Unit 2 physical changes"), as set forth in Count 8 of each complaint. In 1995, Met Ed replaced the entire platen and pendant superheater headers and associated pendant superheater tubes on Unit 2 ("third Unit 2 physical changes"), as set forth in Count 9 of each complaint.

After 2000, Reliant and/or Sithe replaced waterwall arch tubes on Unit 2 ("fourth Unit 2 physical change"), as set forth in Count 10 of each complaint. Additionally, in 2001, Reliant replaced Superheater Dissimilar Metal Tube Weld Replacements on Unit 1 ("fifth Unit 1 physical change"), as set forth in Count 5 of each complaint. In 2005, Reliant replaced waterwall tubes on Unit 1 ("sixth Unit 1 physical change"), as set forth in Count 6 of each complaint.

Defendants failed to obtain required permits before constructing these modifications. Moreover, as set forth in Count 11 of each complaint, in submitting state operating permit renewal applications, defendants failed to include required information, including a plan describing the extent to which the Plant complies with applicable air quality standards or a description of how the Plant would achieve compliance with such standards. In addition, defendants failed to acknowledge, on permit renewal applications, the alleged modifications to Units 1 and 2.

CONTENTIONS

Contentions of Reliant and Sithe Defendants Reliant and Sithe seek dismissal of Counts 1-5 and 7-11 of each complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. They do not seek dismissal of Count 6 of either Complaint.

In support of their motions to dismiss, Reliant and Sithe advance four arguments. First, they contend that the PSD provisions of the Act do not authorize a claim against Reliant or Sithe under the facts alleged in Counts 1-4 and 7-9 because neither Reliant nor Sithe owned or operated the Portland plant at the time the modifications alleged in those counts were made.

Second, they aver that the states' PSD claims in Counts 1-5 and 7-10 are barred by the applicable statute of limitations and the concurrent remedy doctrine, and cannot be characterized as "continuing violations".

Third, Reliant and Sithe contend that this court lacks subject matter jurisdiction over the states' Title V claims alleged in Count 11 of each Complaint.

Finally, in the alternative, they argue that if Counts 1-5 and 7-10 are not dismissed in their entirety, allegations of unspecified "other modifications" in those counts fail to satisfy the pleading requirements set forth in Rule 8 of the Federal Rules of Civil Procedure because they do not provide sufficient factual information to put defendants on notice of the claims. Therefore, Reliant and Sithe seek to have paragraphs 78, 88, 98, 107, 117, 127, 138, 148, 158 and 168 of New Jersey's First Amended Complaint and paragraphs 73, 83, 93, 103, 113, 123, 134, 144, 154 and 164 of Connecticut's Complaint-in-Intervention stricken.

Regarding their first argument, Reliant and Sithe contend that because the PSD provisions of the Act apply to pre-construction permits, only the owner or operator of a plant is subject to liability for failure to comply with those provisions. Reliant or Sithe therefore contend that they are not responsible for any failure to secure a PSD permit before commencing construction of any modifications between 1980 and 1995, as alleged in Counts 1-4 and 7-9, because all of those violations occurred at least four years before Reliant acquired the Portland plant in November 1999.

Moreover, Reliant and Sithe aver that the PSD program was not designed to regulate post-construction activities. Therefore, they contend that they are not subject to PSD liability for continuing to operate the Portland plant despite any failure on the part of a prior owner to secure a PSD permit before commencing construction of any major modification. Accordingly, Reliant and Sithe aver that Counts 1-4 and 7-9 fail to state a claim against those defendants and should be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

Regarding their second argument, Reliant and Sithe aver that the PSD claims against them in Counts 1-5 and 7-10 are barred by the statute of limitations and the concurrent remedy doctrine. They contend that the states' PSD claims in those counts are barred by the five-year statute of limitations set forth in 28 U.S.C. § 2462 because the claims accrued at the time the alleged modifications were made, all of which occurred more than five years before commencement of this lawsuit in December 2007.

Additionally, Reliant and Sithe contend that the states cannot avoid application of the statute of limitations by characterizing their PSD claims as "continuing violations". They aver that treating the states' claims as continuing violations would effectively eliminate the statute of limitations. In addition, Reliant and Sithe aver that a majority of courts have taken the position that ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.